19  IT 


THE  LIBRARY 

OF 

THE  UNIVERSITY 
OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


LAW  LIBRARY 

OF 

IDS  ANGELES  COUNTY 


A.  CO,  »-  * 


A  TREATISE  ON  THE  LAW   OF 

INHERITANCE 
TAXATION 


WITH  PRACTICE  AND 
BY 


.        . 
LAFAYETTE  B.  GLEASON 

Attorney  for  State  Comptroller  for  New  York  City 


AND 


ALEXANDER  OTIS 

of  the  New  York  City  Bar 


ALBANY  and  NEW  YORK  CITY 

MATTHEW  BENDER  &  COMPANY 

INCORPORATED 

1917 


COPYRIGHT,  1917 
BY  MATTHEW  BENDER  &  COMPANY 

INCORPORATED 


INTRODUCTION 


Every  estate  of  fifty  thousand  dollars  or  more  in  value 
is  taxed  by  the  Federal  statute.  Nearly  every  such  estate 
has  investments  in  corporate  stock.  The  transfer  of 
such  stock,  at  the  death  of  its  owner,  is  usually  taxed  by 
the  state  of  incorporation  as  well  as  by  the  state  of  the 
owner's  domicile.  Most  estates  of  any  size  are  there- 
fore subject  to  inheritance  taxation  in  several  juris- 
dictions. 

In  1917  seventeen  states  and  the  Federal  government 
amended  their  inheritance  tax  laws  or  adopted  new 
statutes.  In  the  last  four  years  thirty-six  states  have 
done  so  out  of  the  forty-four  imposing  such  taxes.  Trans- 
fer tax  law,  therefore,  is  nation-wide;  and  no  text  book 
that  is  merely  an  annotation  of  a  single  state  statute, 
however  elaborate,  can  give  the  necessary  information. 

Hitherto,  with  a  few  exceptions,  most  of  the  states 
have  enforced  inheritance  taxation  "  Dogberry  fashion;" 
but  under  the  recent  amendments  the  collection  is  now 
entrusted  to  special  departments  with  ample  legal 
assistance.  The  rates  have  also  been  heavily  increased. 

The  plan  of  this  book  is  to  depart  from  mere  statutory 
annotation  and  treat  the  subject  of  inheritance  taxation 
as  a  distinct  branch  of  jurisprudence,  coordinating  the 
decisions  and  statutes  into  a  body  of  law  gradually 
developed  by  the  legislation  and  litigation  of  the  last 
twenty  years. 

New  York  necessarily  leads  the  way,  as  half  the  reve- 
nue and  more  than  half  the  litigation  has  been  derived 
from  her  statute ;  and  it  has  been  largely  copied  by  other 

[iii] 

729731 


iv  INHERITANCE  TAXATION 

states;  but,  as  her  citizens  also  pay  a  large  share  of  the 
inheritance  taxes  collected  in  those  states  from  the 
estates  of  nonresidents,  New  York  attorneys  cannot  well 
confine  their  attention  exclusively  to  the  New  York 
statute  and  the  decisions  under  it. 

As  the  state  and  Federal  governments  are  all  seeking 
to  derive  large  revenues  from  the  estates  of  decedents, 
involving  in  most  cases  double  and  triple  taxation,  attor- 
neys are  constantly  besought  by  investors  for  advice  as 
to  the  best  means  of  minimizing  such  taxation.  This  book 
undertakes  to  point  no  way  of  evading  the  law.  Its  authors 
have  been  and  are  charged  with  the  duty  of  enforcing  it 
and  could  not  properly  advise  methods  of  ' '  tax  dodging ; ' ' 
but  a  thorough  understanding  of  the  principles  of  inher- 
itance taxation  and  the  provisions  of  the  several  state 
statutes  must  afford  legitimate  information  that  will  assist 
the  lawyer  and  the  layman  justly  and  properly  to  adjust 
estate  investments  to  meet  conditions  arising  from  laws, 
now  in  force. 

To  illustrate:  No  statute  taxing  inheritances,  save 
possibly  that  of  Rhode  Island,  taxes  life  insurance,  when 
payable  direct  to  the  beneficiary,  and  not  to  the  estate 
of  the  insured.  No  subsequent  statute  can  constitution- 
ally tax  such  insurance  when  once  taken. 

Matter  of  Pell,  171  N.  Y.  48;  63  N.  E.  789. 
Matter  of  McKelway,  121  N.  Y.  15 ;  116  N.  E.  348. 

In  the  last  few  months  the  courts  have  construed  ques- 
tions arising  under  gifts,  joint  tenancies,  survivorship 
and  partnership  agreements,  residence,  domicile,  and 
exemptions,  clarifying  many  points  in  the  administration 
of  the  law  hitherto  obscure.  These  will  all  be  found  in 
this  volume. 


INTRODUCTION  v 

Because,  by  mercy  of  "  vox  populi  "  and  "  pro  bono 
publico,"  most  of  the  state  legislatures  meet  bienially, 
in  the  odd  numbered  years,  the  statutes,  as  now  con- 
stituted, will  remain  unamended  until  1919.  For  two 
years,  at  least,  the  information  as  to  these  laws  afforded 
by  this  book  will  be  up  to  date. 

The  plan  of  the  book  is  to  discuss  inheritance  tax  law 
under  six  topics,  as  follows: 

First:  The  nature  of  the  tax  and  the  constitutional 
principles  that  limit  and  control  its  imposition. 

Second:  The  different  transfers  taxable;  viz.,  by  will, 
interstate  law,  gift  in  contemplation  of  death,  etc. 

Third:  The  parties  and  their  interests,  residence  of 
the  decedent,  relationship  of  beneficiaries,  exemptions, 
life  estates,  remainders,  mortuary  tables  and  calculations 
of  the  value  of  life  interests. 

Fourth:  The  property  transferred,  and  the  problems 
arising  out  of  its  situs  and  valuation. 

Fifth:  Procedure,  necessarily  confined  to  the  New 
York  practice,  though  it  is  largely  followed  in  other 
states  and  authorities  from  those  states  are  cited  where 
applicable. 

Sixth :  General  resume  of  the  statutes  and  an  extended 
discussion  of  the  provisions  of  the  Federal  and  New  York 
acts. 

The  Appendix  gives  the  New  York  Decedent  Estate 
Law,  New  York  Forms  and  the  inheritance  tax  statutes 
of  all  the  states  with  tables  showing  the  rates  of  tax 
and  exemptions  in  each  state. 

The  book  also  contains  the  tables  of  mortality  used  as 
the  basis  of  inheritance  tax  calculations  in  all  the  states, 
lists  of  the  principal  stock  corporations  showing  the  state 
of  incorporation  and  whether  there  taxable,  names  and 
addresses  of  the  officers  of  the  several  states  and  the 
Federal  internal  revenue  to  whom  attorneys  should  write 


vi  INHERITANCE  TAXATION 

for  blank  forms  and  information ;  and  the  usual  table  of 
cases  giving  extensive  citations  from  every  jurisdiction 
imposing  inheritance  taxes. 

It  is  hoped  that  these  features  are  sufficiently  novel  and 
necessary  to  justify  the  publication  and  make  it  accept- 
able to  the  bar. 


TABLE  OF  CONTENTS 


PAGE 

Introduction .- iii 

Syllabus ix 

Table  of  Cases xxi 

Part      I  — The  Tax 1 

Part    II  —  The  Transfer 43 

Part  in  —  The  Parties 146 

Part  IV  —  The  Property  233 

Part     V  —  Procedure T 321 

Part  VI  —  The  Statutes 462 

United  States  Statute 497 

New  York  Statute 539 

Mortality  Tables 215 

List  of  Addresses  of  State  Inheritance  Tax  Officials 328 

Districts  and  Collectors  of  Internal  Revenue  330 

List  of  Corporations —  Where  incorporated 341 

Appendix 

Forms 579 

Decedent  Estate  Law  (New  York) 601 

State  Statutes  647 

Index 791 

[vii] 


SYLLABUS 


PART  I  — THE  TAX  PAGE 

A.  Not  a  tax  on  the  property  but  on  the  privilege  of  transmitting 

and  inheriting  it 2 

1.  Review  of  the  authorities 3 

2.  The  privilege  taxed 11 

3.  Statutes  held  invalid 13 

4.  Practical  application  of  the  rule 14 

a.  Not  a  direct  tax  to  be  apportioned  among  the  States.  14 

b.  Property    otherwise    exempt    must    be    included    and 

valued 14 

c.  Construction  of  contracts 15 

d.  Personalty  of  resident  taxed  though  in  foreign  juris- 

diction    15 

e.  Intangibles  of  nonresident  within  the  State  taxable. .  18 

f .  Double  taxation   18 

B.  The  transfer  takes  place  at  death 21 

1.  Vested  right  of  the  State 22 

2.  Renunciation  by  legatee 24 

3.  Law  in  force  at  date  of  proceedings  controls  procedure. .  25 

4.  Rights  vested  prior  to  death  cannot  be  taxed 25 

5.  Amendment  and  repeal 27 

6.  Gains  or  losses  during  administration 30 

7.  Exceptions  to  the  rule 32 

a.  By  the  nature  of  the  transfer 32 

b.  By  statute  32 

C.  General  rules  of  construction 33 

1.  Strict  or  liberal 33 

2.  Exemptions 34 

3.  Retroactive  or  prospective 36 

4.  Notice  and  a  hearing  essential 37 

5.  Copied  or  adopted  statutes 38 

6.  Practical  construction    38 

D.  Conflict  of  laws 39 

1.  Jurisdiction 39 

2.  "Full  Faith  and  Credit" 39 

3.  Proof  of   foreign   laws 40 

4.  As  to  sister  States 40 

5.  As  against  aliens  protected  by  treaties 41 

6.  Reciprocal  provisions   42 

[ix] 


x  INHERITANCE  TAXATION 

PART  II  —  THE  TRANSFER  PAGE 

A.  Transfers  by  will 45 

1.  Testamentary  provisions  which  may  affect  the  tax 45 

a.  What  a  testator  cannot  do 45 

b.  What  he  can  do 46 

2.  Transfers  pursuant  to  agreements  to  make  a  will 47 

a.  Where  the  agreement  is  violated 47 

b.  Where  the  agreement  is  performed 48 

3.  Compromise  agreements  between  heirs  and  devisees 50 

4.  Payment  of  debt  by  will 54 

5.  As  affected  by  statute 55 

B.  Transfers  by  Intestate  Law 56 

1.  As  to  real  estate 56 

2.  As  to  personal  property 57 

3.  Advancements 60 

4.  Resume  of  the  intestate  laws  of  the  several  States. .......  61 

a.  Rights  of  a  surviving  husband 61 

b.  Where    there    is    no    husband,    widow,    children    or 

descendants 62 

c.  When  both  parents  are  dead,  leaving  issue 63 

d.  When  a  widow  and  issue  or  descendants  survive ....  63 

e.  If  there  is  a  widow  or  husband  but  no  children  or 

descendants 64 

C.  Gifts 66 

1.  Inter  vivos    66 

a.  Burden  of  proof  is  on  the  donee 66 

b.  There  must  be  a  present  intent  to  give 67 

c.  There  must  be  delivery  of  the  thing  given 68 

d.  Delivery  to  an  agent 68 

(1)  To  agent  of  donor 69 

(2)  To  agent  of  donee 70 

e.  Symbolical  delivery 71 

f.  Re-delivery  by  donee  to  donor 71 

g.  Power  of  revocation 72 

h.  Stock  transfer  stamps 74 

i.  Consideration 75 

2.  Gifts  causa  mortis 75 

3.  Gifts  in  contemplation  of  death 76 

a.  Nature  of  the  contemplation 76 

b.  Advanced  age  alone  insufficient 79 

c.  Statutory  time  limit 83 

d.  Tax  accrues  at  date  of  gift 83 


SYLLABUS  xi 

C.  Gifts  —  Continued  PAGE 

4.  Gifts  to  take  effect  in  possession  or  enjoyment  at  or  after 

death 84 

a.  Trust  deed  reserving  income  to  donor 84 

b.  Where  part  of  the  income  is  reserved 86 

c.  Where  the  life  use  is  waived 87 

d.  Reservation  of  power  to  revoke 87 

D.  Consideration  as  affecting  testamentary  transfers 92 

1.  Where  the  transaction  is  completed  inter  vivos 94 

2.  Where  the  contract  is  executory 98 

3.  The  consideration  must  be  adequate 107 

4.  Burden  of  proof 109 

E.  Power  of  appointment 109 

1.  The  common  law  rule 109 

2.  The  statutory  rule Ill 

3.  The  New  York  rule Ill 

4.  The  Massachusetts  rule 112 

5.  Development  of  the  New  York  rule 114 

6.  Construction  of  wills 116 

7.  Questions  of  residence 116 

F.  Common  law  transfers 118 

1.  Dower 118 

2.  Tenancy  by  the  cnrtesy 121 

3.  Marital  right    122 

4.  Tenancies  by  the  entirety 123 

a.  Not  taxable  as  an  inheritance 123 

b.  Nature  of  the  estate 123 

c.  Change  in  rights  at  death 125 

d.  How  created  125 

e.  How  terminated  127 

f.  Effect  of  statute 128 

5.  Joint  estates  130 

a.  Intent  of  the  parties  governs 130 

b.  Survivorship   not   taxable 133 

c.  Where  succession  is  specifically  taxed 137 

d.  Construction  of  the  statute 138 

6.  Escheat 141 

G.  Civil  law  transfers 143 

1.  Taxable 143 

2.  Defeasible  but  not  taxable 144 

3.  Gains  acquired  in  foreign  country  exempt 144 

4.  Gains  acquired  in  this  country  taxable 145 


Xll 


PAET  III  —  THE  PAETIES  PAGE 

A.  The  decedent   148 

1.  Residence  and  domicile  synonymous 149 

2.  Rules  as  to  domicile 149 

3.  Application  of  the  rules 150 

a.  Factum  without  animus 150 

b.  Animus  without  factum 151 

c.  Animus  with  factum 152 

d.  As  to  a  married  woman 153 

e.  As  to  a  widow 153 

f.  As  to  an  army  officer 155 

g.  The  burden  of  proof 156 

h.  Construction  as  affected  by  statute 156 

B.  The  beneficiaries  —  Generally 158 

1.  As  to  domicile  or  residence 158 

2.  Relationship   to   decedent 159 

3.  Personal  exemptions 165 

4.  Exemptions  to  charities,  etc 166 

a.  Charter  powers  the  test 3  67 

b.  Purposes  must  be  brought  within  the  language  .of  the 

statute 170 

c.  Bequests  held  exempt 173 

d.  Bequests  held  taxable 174 

C.  Heirs  and  legatees 176 

1.  Heirs  of  real  estate 176 

a.  Lien  of  the  tax 176 

b.  Partition 177 

c.  Equitable  conversion 178 

d.  Sale  to  pay  the  tax 178 

e.  When  charged  with  a  legacy 179 

f .  As  to  aliens 179 

2.  Legatees  of  personal  property 179 

a.  Renunciation  and  assignment  179 

b.  Legacy  impressed  with  a  trust  180 

c.  Lapsed  legacies 181 

3.  While  the  legacy  is  in  custodia  legis 182 

4.  From  what  funds  available 183 

D.  Life  estates  and  remainders  185 

1.  Examples  and  illustrations  185 

2.  Life  estates 188 

a.  Fund  from  which  the  tax  is  payable 189 

b.  Charged  with  an  annuity 191 


SYLLABUS 


Xlll 


D.   Life  estates  -and  remainders  —  Continued 

2.  Life  estates  —  Continued  PAGE 

c.  Power  to  invade  principal 191 

(1)  Suspending  taxation  of  remainder 191 

(2)  When  discretion  is  in  trustee  192 

(3)  When  the  discretion  is  in  the  life  tenant 192 

d.  With  power  of  appointment 197 

e.  Tax  assessed  on  theoretical,  not  actual  value 198 

3.  Remainders 199 

a.  The  law  in  force  at  death  of  testator  governs 200 

b.  Vested   remainders   not   taxable   when  testator   died 

before  the  statute 200 

c.  Taxation  postponed  until  remainderman  gets  posses- 

sion   201 

<L  Presently  taxable    201 

e.  When  beneficiary  is  uncertain 202 

f.  Highest  possible  rate  204 

g.  Maximum  and  minimum  rate  206 

h.  Where  amount  of  remainder  is  uncertain 207 

i.    Under  powers  of  appointment 207 

j.    Taxation  of  full  undiminished  value 211 

E,    Computations 213 

1.  The  basis  of  calculation 213 

a.  Mortality  tables  and  interest  rate 213 

b.  Compound  interest  rule  215 

c.  Present  worth  rule 216 

d.  The  law  of  discount  216 

e.  Law  of  the  chance  of  death 217 

f.  Rule  of   the  chance   of   death,   as   affecting  present 

worth 217 

g.  Rule  for  calculating  present  value  of  life  estates 218 

2.  Tables  for  computing  the  present  worth  of  annuities 219 

a.  Actuaries  combined  table  at  4% 220 

b.  Actuaries  combined  table  at  5% 221 

c.  American  experience  table  at  4% 222 

d.  American  experience  table  at  5% 223 

e.  Carlisle  table  at  5% 224 

f.  Carlisle  table  at  6% 225 

g.  American  experience  table  of  mortality  and  expecta- 

tion of  life 226 

3.  How  to  use  the  tables 227 

a.  The  necessary  factors 227 

b.  Ascertaining  the  value 227 

4.  Application  to  the  problems  of  inheritance  taxation 227 


xiv  INHERITANCE  TAXATION 

PABT  IV  —  THE  PROPERTY  PAGE 

A.  As  to  situs 236 

1.  Real  estate    236 

a.  Not  taxable  in  foreign  jurisdiction 236 

b.  No  equitable  conversion 237 

c.  Land  contracts  238 

d.  Leases 240 

2.  Tangibles 241 

3.  Mortgages,  bonds  and  commercial  paper 241 

a.  Situs  at  domicile  of  owner 242 

b.  Where  the  land  lies 243 

c.  Where  physically  present   244 

d.  "Transient  "  or  "  Habitual  "  presence 246 

4.  Corporate  stock   247 

a.  Of  domestic  corporations 247 

b.  Foreign  corporations  owning  property  within  the  state.  249 

c.  Foreign  corporations  not  owning  property  within  the 

state 249 

d.  Apportionment  of  corporate  property  251 

e.  Pledged  securities   251 

5.  Other  choses  in  action 256 

a.  Bank  deposits 256 

b.  Debts 257 

c.  Life  insurance    258 

d.  Seat  in  stock  exchange '. 260 

e.  Interest  in  the  estate  of  another 260 

f .  Partnership  interest  261 

B.  As  to  value  262 

1.  Where  the  value  at  death  cannot  be  ascertained 262 

2.  Real  estate   263 

3.  Tangibles 266 

a.  Pictures 266 

b.  Furniture 266 

c.  Jewelry 267 

4.  Stocks 268 

a.  Active  securities   268 

b.  Inactive  securities  270 

e.  Closely  held  stocks  271 

5.  Bonds 277 

6.  Pledged  securities   277 

<a.  As  to  the  pledger 277 

b.  As  to  the  pledgee 278 

7.  Partnerships 279 


SYUABUS  xv 

B.  :As  to  value  —  Continued  PAGE 

8.  Good  will 282 

a.  A  taxable  asset  282 

b.  Rules  for  computation  283 

c.  Number  of  years '  purchase 284 

d.  When  the  profits  are  speculative 288 

e.  When  no  profits  are  shown 289 

C.  Deductions 295 

1.  Mortgages 295 

2.  Debts 296 

a.  Liability  on  mortgage  bond 296 

b.  Repairs  to  real  estate 296 

c.  Debts  paid  by  will 297 

d.  Doubtful  claims 299 

3.  Funeral  and  burial  expenses 299 

4.  Administration  expenses  and  counsel  fees 300 

5.  Discount  on  legacy   301 

6.  Expenses  of  litigation   302 

a.  Where  to  conserve  the  estate 302 

b.  Disputes  among  the  beneficiaries   302 

7.  Taxes 303 

a.  Other  inheritance  taxes  303 

b.  General  taxes  and  assessments 304 

8.  Commissions > 305 

a.  As  to  executors  305 

b.  As  to  trustees 307 

c.  On  sale  of  real  estate 309 

9.  Family  allowance 310 

10.  Pro  rating  debts 311 

a.  When  the  local  debts  exceed  the  local  assets 312 

b.  When  there  are  local  assets  and  no  local  debts 312 

c.  When  local  debts  are  paid  with  foreign  assets 313 

d.  When  there   are   both   local   and   foreign   debts   and 

assets 314 

e.  As  to  partnerships 315 

11.  Marshaling  assets  to  reduce  tax 317 

a.  When  the  executor  can  do  so 317 

b.  When  he  cannot   319 

PART  V  — PROCEDURE 

A.   Preliminaries 323 

1.  Motions  to  exempt 323 

2.  In  case  of  non-residents  327 

a.  Officials  to  be  addressed  by  non-resident  attorneys. . . .  328 


xvi  INHERITANCE  TAXATION 

A.  Preliminaries  —  Continued  PAGE 

2.  In  case  of  non-residents  —  Continued 

b.  Companies  incorporated  in  states  that  tax  non-resi- 

dent transfers  341 

c.  Companies    incorporated   in    states   that    do    not   tax 

non-resident  transfers   348 

3.  The  safe  deposit  box 351 

a.  Comptroller  may  inspect  351 

b.  May  not  impose  arbitrary  conditions 353 

c.  Consent  for  transfer  of  funds 354 

d.  Property  belonging  to  another 355 

4.  Inventory 356 

a.  Must  be  filed  by  executor 356 

b.  Form  of  affidavit 357 

c.  Preparation  of  inventory 362 

d.  Form  of  inventory   370 

B.  Proceedings  before  appraiser  378 

1.  Appraisers 378 

a.  Appointment  and  removal 378 

b.  Powers  and  duties 380 

2.  Notice 383 

a.  Notice  is  jurisdictional 383 

b.  Notice  by  mail  sufficient  385 

c.  Where  notice  is  impossible 386 

d.  Presumption  of  notice  387 

3.  Hearings 387 

a.  Informal  upon  affidavits   387 

b.  Burden  of  proof  388 

c.  Witnesses 389 

d.  Corporate  books 392 

e.  Objections 393 

4.  Report 395 

a.  What  it  should  contain  395 

b.  What  it  must  show 397 

c.  Where  taxation  is  suspended  397 

d.  Form  of  report 398 

C.  Proceedings  on  appeal  404 

1.  Jurisdiction  of  Probate  Court 404 

a.  Effect  of  probate  decree 404 

b.  Decree  of  distribution   406 

c.  Jurisdiction  of  the  tax  proceedings  408 

2.  Assessment  of  the  tax 409 

a.  The  judge  acts  as  taxing  officer 409 

b.  The  taxing  order 411 

c.  Report  may  be  remitted  to  appraiser 411 


SYMABUS  xvii 

C.  Proceedings  on  appeal  —  Continued 

2.  Assessment  of  the  tax  —  Continued  PAGE 

d.  Forms  of  taxing  order TT.  .  v. . .-. 413 

e.  Effect  of  decree  assessing  tax 418 

3.  Appeal  to  the  surrogate 419 

a.  Notice  of  appeal   419 

b.  Form  of  notice 421 

4.  Determination  by  surrogate   425 

a.  Hearings  on  appeal 425 

b.  On  motions  to  exempt  427 

c.  Order  remitting  report  428 

d.  Supplemental  report  of  appraiser 430 

e.  Second  taxing  order  432 

f.  Notice  of  appeal  from  second  taxing  order 433 

g.  Taxing  order  upon  second  appeal 434 

h.  Notice  of  appeal  to  Appellate  Division 435 

5.  Before  the  appellate  courts 436 

a.  Who  may  appeal  436 

b.  Order  appealed  from 439 

c.  Service  of  notice  of  appeal 440 

d.  Papers  on  appeal 441 

e.  Costs 441 

f .  Appeals  to  Court  of  Appeals 442 

g.  To  Supreme  Court  of  United  States1 443 

D.  Subsequent  proceedings  444 

1.  Motions  to  modify  decree  444 

a.  Where  there  was  a  mistake  of  fact 444 

b.  Where  there  was  lack  of  jurisdiction 445 

c.  May  not  correct  an  error  of  law 446 

d.  Laches 449 

e.  Bad  faith  449 

f .  Statute  of  Limitations 451 

2.  Motions  to  remit  penalty 452 

3.  Mandamus 455 

a.  When  writ  granted 455 

b.  When  writ  refused 456 

4.  Proceedings  to  collect  delinquent  taxes 457 

5.  Personal  liability  of  executor 458 

PART  VI  —  THE'STATUTES 

A.   General  review  of  the  State  statutes 464 

1.  Wherein  they  agree 465 

a.  Transfers  by  will  and  intestacy 466 

b.  Transfers  in  avoidance .  466 


xviii  INHERITANCE  TAXATION 

A.  General  review  of  the  State  statutes  —  Continued 

1.  Wherein  they  agree  —  Continued  PAGE 

c.  Common-law  -transfers   467 

d.  Powers  of  appointment  467 

e.  Life  estates 468 

f.  Remainders 468 

g.  Executors  and  -their  duties 469 

h.  Appraisal '. 470 

i.   Valuation 470 

j.   Interest,  discount  and  penalty 471 

k.  Banks  and  trust  companies 475 

1.    The  interest  taxed 476 

2.  Wherein  they  differ  476 

a.  Collaterals  and  strangers  only   476 

b.  Non-resident   decedents   477 

c.  Tangibles  and  intangibles  477 

d.  Reciprocal  statutes  478 

e.  Double  .taxation  479 

3.  As  producers  of  revenue  479 

a.  The  rate 479 

b.  Exemptions. 480 

c.  Facts  as  to  revenue 482 

B.  The  Federal  Statute  484 

1.  History  and«development 484 

a.  Revolutionary  War  tax,  1797  to  1802 484 

b.  Civil  War  tax,  1862  to  1870 485 

e.  Spanish  War  tax,  1898  to  1902 485 

2.  Doubtful   constitutionality    486 

3.  Provisions  in  detail 494 

a.  The  rates 494 

b.  Exemptions  and  deductions   495 

c.  Duties  of  executors 495 

d.  Discount,  interest  and  penalty 496 

e.  Treasury  Department  rulings  496 

4.  The  Federal  Statute  and  department  regulations 496 

C.  The  New  York  Statute ' 517 

1.  History  and  development 517 

a.  Frequent  changes 517 

b.  List  of  the  statutes 518 

e.  The  first  statute  taxing  only  collaterals 519 

d.  The  Act  of  1892  taxing  direct  inheritances 520 

e.  The  Act  of  1896  —  Powers  of  Appointment 521 

f .  Amendment  of  1899  —  Highest  Rate 523 

g.  Act  of  1905 523 


SYLLABUS  xix 

C.   The  New  York  Statute  —  Continued  PAGE 

2.  The  present  act  and  its  amendments 524 

a.  The  original  statute  of  1909 524 

b.  The  "Reign  of  Terror  Act  "  of  1910 524 

c.  A  radical  change  in  theory  as  to  the  transfer  taxed . . .  525 

d.  The  amendments  of  1911  —  Tangibles  and  Intangibles .  526 

e.  The  tax  extended  *to  curtesy 527 

f .  Maximum  and  Minimum  rates 527 

3.  The  problem  as  -the  property  of  non-residents 527 

a.  The  previous  policy  of  the  State 527 

b.  Real  estate  of  corporations 528 

e.  Co-partnership  assets   529 

d.  Exemptions 530 

e.  Joint  estates   530 

f .  Capital  invested  in  business 531 

g.  Tenancies  by  the  entirety 533 

h.  Attempt  to  define  a  ' '  resident  " 533 

i.   Computations 534 

j.    New  rates  and  exemptions 535 

k.  Amendments  of  1917 538 

4.  Text  of  the  New  York  Statute  with  amendments  to  date. .  539 


TABLE  OF  CASES  ARRANGED  BY  STATES 


[References  are  to  pages] 
NEW  YORK 


Abbett,  29  Misc.  567,  61  Supp.  1067 259 

Abraham,  151  App.  Div.  441,  135  Supp.  891 22 

Achelis,  N.  Y.  L.  J.,  March  9,  1912 272 

Adams  v.  Anderson,  23  Misc.  705,  53  Supp.  141 57 

Adee  v.  Campbell,  79  N.  Y.  52 60 

Adsit  v.  Adsit,  2  Johns  Ch.  448 120 

^3tna  Ins.  Co.  v.  Mayor,  etc.,  153  N.  Y.  331,  47  N.  E.  593 445 

Agnew,  N.  Y.  L.  J.,  Dec.  13, 1913 87 

Ahrens,  N.  Y.  L.  J.,  May  10,  1913 389 

Albany  County  Sav.  Bk.  v.  McCarty,  149  N.  Y.  71 121 

Albrecht,  136  N.  Y.  91,  32  N.  E.  632 124 

Albright,  93  Misc.  388,  156  Supp.  821 173 

Allen,  76  Misc.  88,  136  Supp.  327 174 

Althause,  63  App.  Div.  252,  71  Supp.  445;  aff.  168  N.  Y.  670,  61 

N.  E.  1127 240 

Altman,  87  Misc.  256,  149  Supp.  601 169 

Ambrosius  v.  Ambrosius,  167  App.  Div.  244,  152  Supp.  562 395 

Ames,  141  Supp.  793 251 

Ames  v.  Duryea,  6  Lans.  155;  aff.  61  N.  Y.  609 155 

Amherst  College  v.  Rftch,  151  N.  Y.  282,  45  N.  E.  876 419 

Amsinck,  155  Supp.  1089 297 

Anderson,  N.  Y.  L.  J.,  Dec.  20,  1916 266 

Andrews,  N.  Y.  L.  J.,  Feb.  21,  1912 123 

Anthony,  40  Misc.  497,  82  Supp.  789 282 

Armstrong,  N.  Y.  L.  J.,  Feb.  20,  1912 183 

Arnett,  49  Hun  299,  2  Supp.  428 385 

Arnold,  114  App.  Div.  244,  99  Supp.  704 263,  363,  408,  409 

Arnot,  203  N.  Y.  627 , 173 

Asche  v.  Asche,  113  N.  Y.  232,  21  N.  E.  70 120 

Astor,  137  App.  Div.  922,  122  Supp.  1121 412 

Atterbury,  N.  Y.  L.  J.,  March  25,  1913 87 

Augsbury  v.  Shirtliff,  180  N.  Y.  138,  72  N.  E.  927 69 

[xri] 


xxii  INHERITANCE  TAXATION 

[References  are  to  pages] 

B 

Babeoek,  115  N.  Y.  450,  22  N.  E.  263 304,  363 

Babcock,  37  Misc.  445,  75  Supp.  926;  aff.  81  App.  Div.  645,  81 

Supp.  1117 191 

Bach,  147  Supp.  229 275,  392 

Backhouse,  110' App.  Div.  737,  96  Supp.  466;  aff.  185  N.  Y.  544,  77 

N.  E.  1181 114,  383,  445 

Badger,  N.  Y.  L.  J.,  June  8,  1912 449 

Baird,  126  App.  Div.  439,  110  Supp.  708 311 

Baldwin,  N.  Y.  L.  J.,  August  21,  1912 303 

Baker,  38  Misc.  151,  77  Supp.  170 380,  412 

Baker,  67  Misc.  360,  124  Supp.  827 239 

Baker,  83  App.  Div.  530,  82  Supp.  390;  aff.  178  N.  Y.  575,  70  N.  E.  ' 

1094 .96,  104 

Balch,  93  Misc.  419, 156  Supp.  1006;  aff.  175  App.  Div.  933 153 

Ball,  161  App.  Div.  79, 146  Supp.  499 75,  284,  287,  394 

Bailies,  144  N.  Y.  132 174 

Barber  v.  Brundage,  50  App.  Div.  123,  63  Supp.  347;  aff.  169  N.  Y. 

368 56 

Barbey,  114  Supp.  725 119 

Barnes,  83  Misc.  272, 114  Supp.  794 381 

Barnes  v.  Underwood,  47  N.  Y.  351 123 

Barney  v.  Pike,  94  App.  Div.  199,  87  Supp.  1038 281 

Barnum,  129  App.  Div.  418, 114  Supp.  33 265,  427,  447 

Barrett,  132  App.  Div.  134,  116  Supp.  736 182 

Barry,  62  Misc.  456,  116  Supp.  798 59,  66 

Bartlett,  4  Misc.  380,  25  Supp1.  990 297,  364 

Bartow,  30  Misc.  27,  62  Supp.  1000 178 

Bass,  57  Misc.  531, 109  Supp.  1084 190 

Baucus  v.  Stover,  24  Hun  109 311 

Baudouine,  5  App.  Div.  622,  39  Supp.  1121 264,  296 

Baumgrass  v.  Baumgrass,  5  Misc.  8,  24  Supp.  767 195 

Baylies,  148  Supp.  912 311 

Beach,  154  N.  Y.  242,  48  N.  E.  516 163 

Beakes  Dairy  Co.  v.  Berns,  128  App.  Div.  137,  112  Supp.  529 73 

Beal,  167  App.  Div.  916, 151  Supp.  1103;  aff.  215'N.  Y.  620 85 

Bean  v.  Flint,  138  App.  Div.  846,  204  N.  Y.  153;  97  N.  E.  490 394 

Becker,  26  Misc.  633,  57  Supp.  940 488 

Beekhardt,  N.  Y.  L.  J.,  June  7,  1913 121 

Beaver  v.  Beaver,  117  N.  Y.  421,  22  N.  E.  940 66,  67 

Bell,  94  Misc.  552,  158  Supp.  142 389 

Bell  v.  Champlain,  64  Barb.  396 61 

Bell  v.  Warn,  4  Hun  406 195 

Bender,  44  Misc.  79,  89  Supp.  731 163 


TABLE  OF  CASES  CITED  xxiii 

[References  are  to  pages] 

Benson,  N.  Y.  L.  J.,  February  3, 1917 161 

Bennett,  N.  Y.  L.  J.,  October  24,  1906;  aff.  120  App.  Div.  904,  105 

Supp.  1107  256 

Bennington,  67  Misc.  363, 124  Supp.  829 298 

Bentley,  31  Misc.  656,  66  Supp.  95 425 

Bernard,  89  Misc.  705,  152  Supp.  716 142. 

Berry,  29  Misc.  230,  51  Supp.  1132 295 

Bertles  v.  Noonan,  92  N.  Y.  152 .r 128 

Bierstadt,  N.  Y.  L.  J.,  March  23, 1917;  aff.  App.  Div.  July  14,  1917.  490 

Billor  v.  Loundes,  2  Dem.  590 196 

Billingsly,  1  State  Dept.  Rep.  569 415 

Bingham,  86  Misc.  566,  148  Supp.  918 190 

Bird,  11  Supp.  895,  2  Con.  376 301 

Birdsall,  22  Misc.  180,  49  Supp.  450;  aff.  43  App.- Div.  624,  60  Supp. 

1133 93,  370,  389 

Bishop,  82  App.  Div.  112,  81  Supp.  474 •. . .  .356,  392 

Bishop,  111  App.  Div.  545,  97  Supp.  1098;  appeal  dismissed,  188 

N.  Y.  635,  81  N.  E.  1159 249,  427 

Black,  5  Supp.  452 300 

Blackwell,  N.  Y.  L.  J.,  February  3,  1917 276 

Blackstone,  69  App.  Div.  127,  74  Supp.  508;  aff.  171  N.  Y.  682,  64 

N.  E.  1118 ' 21 

Blake,  60  Misc.  627,  113  Supp.  944 60 

Blun,  176  App.  Div.  189,  160  Supp.  731 192,  309 

Blynn,  160  Supp.  730. .-. 191 

Bodman,  100  Misc.  390 281 

Bolin,  136  N.  Y.  177,  32  N.  E.  626 66,  70 

Bolles,  67  Misc.  40,  124  Supp.  620 306 

Bolton,  35  Misc.  688,  72  Supp.  430 384,  397 

Bolton,  210  N.  Y.  618, 104  N.  E.  1127 160 

Bolton  v.  Schreiver,  135  N.  Y.  65,  31  N.  E.  1001 404 

Bogert,  25  Misc.  466,  35  Supp.  751 418 

Boon  v.  Moss,  70  N.  Y.  465 286 

Borden,  95  Misc.  453,  159  Supp.  346 .. .. 279 

Bostwick,  160  N.  Y.  489,  55  N.  E.  208 85,  88,  89,  105 

Boyle,  92  Misc.  143, 156  Supp.  173 444 

Brady,  N.  Y.  L.  J.r  February  5,  1913 441 

Branireth,  169  N.  Y.  437,  62  N.  E.  563 71,  72,  103, 105,  274 

Brennan,  92  Misc.  423,  157  Supp.  141 74 

Brenner,  170  N.  Y.  185,  63  N.  E.  133 29 

Brez,  172  N.  Y.  609,  64  N.  E.  958 201 

Brooklyn  Trust  Co.  v.  Phillips,  134  App.  Div.  697,  119  Supp.  401..  181 

Brooks,  32  Supp.  176 Ill 

Bronson,  150  N.  Y.  1,  44  N.  E.  707 242,  244 


INHERITANCE  TAXATION 

[References  are  to  pages] 

Brewer,  N.  Y.  L.  J.,  July  15,  1913 454 

Brown,  86  Mise.  187,  149  Supp.  138;  aff.  167  App.  Div.  912,  151 

Supp.  1106  67 

Browne,  127  App.  Div.  941,  111  Supp.  1111;  aff.  195  N.  Y.  522,  88 

N.  E.  1115 314,  442 

Brown  v.  Lawrence  Park  Realty  Co.,  133  App.  Div.  153,  118  Supp. 

132 176 

Bruce,  59  Supp.  1083 447 

Bruce  v.  Griscom,  9  Hun  280;  aff.  70  N.  Y.  612 298 

Brundage,  31  App.  Div.  348,  52  Supp.  362 28,  304,  370,  391,  393 

Brush,  Isabel,  N.  Y.  L.  J.,  April  26,  1917 115 

Brush,  John  T.,  N.  Y.  L.  J.,  August  14, 1915 288 

Buckham,  N.  Y.  L.  J.,  January  10,  1912 211 

Bucki,  172  App.  Div.  455, 158  Supp.  657 212 

Buckingham,  106  App.  Div.  13,  94  Supp.  130 208,  451 

Bunce,  100  Misc.  385;  aff.  165  Supp.  426 536 

Burden,  47  Misc.  329,  95  Supp.  972 256 

Burgess,  204  N.  Y.  265,  97  N.  E.  591 208 

Burgheimer,  91  Misc.  468,  154  Supp.  943 50,  105,  106 

Burke  v.  Valentine,  52  Barb.  422 122 

Burnham  v.  Comfort,  37  Hun  216;  aff.  108  N.  Y.  535 60 

Burr,  16  Misc.  89,  38  Supp.  811 256 

Burr  v.  Palmer,  53  App.  Div.  358,  65  Supp.  1056 304 

Bushnell,  73  App.  Div.  325,  77  Supp.  4;  aff.  172  N.  Y.  649,  65  N.  E. 

1115 248 

Butler,  58  Hun  400,  12  Supp.  201;  aff.  136  N.  Y.  649,  32  N.  E. 

1016 159,  163,  370 

Butler  v.  Johnson,  111  N.  Y.  204, 18  N.  E.  643 368 

Butterfield,  161  App.  Div.  506 58 

Byron  v.  Byron,  124  App.  Div.  320, 119  Supp.  41 120 

C 

Cadwalader,  96  Misc.  407, 160  Supp.  523 309 

Cager,  111  N.  Y.  343, 18  N.  E.  866 201,  381 

Cahen,  N.  Y.  L.  J.,  August  6,  1915 72 

Caiman,  100  App.  Div.  517,  91  Supp.  1095 296 

Cameron,  97  App.  Div.  436,  89  Supp.  977;  aff.  181  N.  Y.  560,  74 

N.  E.  1115 380,  444 

Camp  v.  Camp,  18  Hun  217 60 

Campbell,  50  Misc.  485 444 

Campbell  v.  Beaumont,  91  N.  Y.  464 194 

Canfield,  96  Misc.  119,  159  Supp.  735 241 

Capron,  10  Supp.  23 162 

Cary,  N.  Y.  L.  J.,  January  20,  1914 171 


TABLE  OF  CASES  CITED  xxv 

[References  are  to  pages] 

Casey  v.  McGowan,  50  Misc.  426,  100  Supp.  536 120 

Caswell,  N.  Y.  L.  J.,  April  24,  1914 88 

Catlin  v.  Trustees  of  Trinity  College,  113  N.  Y.  133,  20  N.  E.  864. . .  175 

Chadwick,  N.  Y.  L.  J.,  June  23, 1917 451 

Chamberlayne  on  ' '  Evidence  " 388 

Chambers,  155  Supp.  153 270 

Chambers,  N.  Y.  L.  J.,  January  21,  1912 391 

Champney  v.  Blanchard,  39  N.  Y.  11 71 

Chapman,  61  Misc.  593,  115  Supp.  981;  aff.  199  N.  Y.  562,  93  N.  E. 

1118 114 

Chapman,  133  App.  Div.  337,  117  Supp.  679 113 

Chappell,  151  App.  Div.  774,  136  Supp.  271 271 

Chappell,  83  Misc.  673, 146  Supp.  798 386 

Church,  176  App.  Div.  910. . .  s 75,  394 

Church,  80  Misc.  447, 142  Supp.  284 118 

Church  of  Transfiguration  v.  Niles,  86  Hun  221,  33  Supp.  944 172 

Clark,  N.  Y.  L.  J.,  February  9,  1912 262,  279,  315 

Clark,  40  Hun  233  121 

Clark,  163  Supp.  972 271 

Clark,  N.  Y.  L.  J.,  February  4,  1914 276 

Clarke,  39  Misc.  73,  78  Supp.  869 208 

Clarkson,  149  Srfpp.  32 458 

Cleveland,  158  Supp.  1099;  aff.  171  App.  Div.  908,  155  Supp. 

1098 75,  394 

Clowes,  163  App.  Div.  961,  148  Supp.  386 66 

Closs  v.  Eldert,  30  App.  Div.  338,  51  Supp.  881 120 

Clinch,  180  N.  Y.  300,  73  N.  E.  35 180, 182,  240,  260,  316 

Collard,  161  Supp-.  455 308 

Collins,  104  App.  Div.  184,  93  Supp.  342 324,  442 

Collins  v.  Russell,  184  N.  Y.  74 ;  76  N.  E.  731 122 

Connolly,  38  Misc.  466,  77  Supp.  1032. 419 

Coogan,"  27  Misc.  563,  59  Supp.  Ill;  aff.  162  N.  Y.  613,  57  N.  E. 

1107 446,  455 

Cook,  50  Misc.  487,  100  Supp.  628;. aff.  187  N.  Y.  253,  79  N.  E. 

991 51, 163,  180,  276 

Cook,  125  App.  Div.  114, 109  Supp.  417;  aff.  194  N.  Y.  400,  87  N.  E. 

786 440 

Cooksey,  182  N.  Y.  92,  74  N.  E.  880 115 

Cooley,  186  N!  Y.  220,  78  N.  E.  939 18,  251 

Cooper,  82  Misc.  324,  144  Supp.  189 188 

Corbett,  171  N.  Y.  516,  64  N.  E.  209 520 

Cornell,  66  App.  Div.  167,  73  Supp.  32;  mod.  170  N.  Y.  423,  63 

N.  E.  445 72, 103, 105,  437,  438 

Corning,  3  Misc.  160,  23  Supp.  285 245 


xxvi  INHERITANCE  TAXATION 

[Ref-erences  are  to  pages] 

Cortelyou  v.  Lansing,  2  Caines  Cases,  200 252 

Cory,  177  App.  Div.  871, 164  Supp.  956;  aff.  221  N.  Y.  Mem.  .49,  98,  279 

Costello,  189  N.  Y.  288,  82  N.  E.  139 380,  440 

Coutts,  N.  Y.  L.  J.,  December  15, 1914 166 

Cowan,  N.  Y.  L.  J.,  July  24, 1913 85 

Cowie,  49  App.  Div.  612,  63  Supp.  608 427 

Craig,  181  N.  Y.  551,  74  N.  E.  1116 95 

Grain,  98  Misc.  496,  164  Supp.  751 309 

Crary,  31  Misc.  72,  64  Supp.  566 268 

Crawford,  85  Misc.  283,  147  Supp.  234 276,  392,  418 

Crawford,  113  N.  Y.  366,  21  N.  E.  142 68 

Crerand,  N.  Y.  L.  J.,  June  30,  1914 284 

Crerar,  56  App.  Div.  479,  67  Supp.  795 398,  418 

Crittenton,  N.  Y.  L.  J.,  April  5,  1911 172 

Crosby,  85  Misc.  679, 148  Supp.  1045 153 

Cruger,  54  App.  Div.  405,  66  Supp.  636;  afi.  166  N.  Y.  602,  59  N.  E. 

1121 15,  105 

Crusius,  N.  Y.  L.  J.,  February  26,  1914 73,  355 

Cullom,  76  Hun  610,  27  Supp.  1105;  aff.  145  N.  Y.  593,  40  N.  E. 

163 15 

Cummings,  142  App.  Div.  377, 127  Supp.  109 40 

Curry,  N.  Y.  L.  J.,  May  27, 1914 87,  241 

Curtice,  111  App.  Div.  230,  97  Supp.  444;  aff.  185  N.  Y.  543,  77  N.  E. 

1184 271 

Cuutis,  31  Misc.  83,  64  Supp.  574 260 

Curtis,  142  N.  Y.  219,  36  N.  E.  887 201 

Curtiss,  9  App.  Div.  285,  37  Su-pp.  586,  41  Supp.  1111 306 

Gushing,  40  Misc.  505,  82-Supp.  795 248 

D 

Dalsimer,  167  App.  Div.  365,  153  Supp.  58;  aff.  217  N.  Y.  608..  135 

438,  530 

Daly,  34  Misc.  148,  69  Supp.  494 387 

Daiy,  79  Misc.  586, 141  Supp.  199;  aff.  215  N.  Y.  Mem 33,  170,  175 

Daly,  100  App.  Div.  373,  91  Supp.  858;  aff.  182  N.  Y.  524,  74  N.  E. 

1116 55,  257 

Daly,  N.  Y.  L.  J.,  July  28,  1916 289 

Dammert  v.  Osborne,  141  N.  Y.  564,  35  N.  E.  1088 17 

Dana,  164  App.  Div.  45,  149  Supp.  417;  aff.  214  N.  Y.  710.  .32,  88,    89 

103,  105,  137 

Dana,  215  N.  Y.  461, 109  N.  E.  557 74,  85,  88,  166 

Daniell,  4  Misc.  29 95 

Darrow  v.  Calkins,  154  N.  Y.  503,  49  N.  E.  61 261 


TABLE  OF  CASES  CITED  xxvii. 

[References  are  to  pages} 

Davenport,  67  App.  Div.  191,  73  Supp.  653;  aff.  172  N.  Y.  454,  65 

N.  E.  275 59,  66 

Davis,  91  Hun  53,  36  Supp.  822 213 

Davis,  98  App.  Div.  546,  90  Supp.  244;  rev.  184  N.  Y.  299,  77  N.  E. 

259 370,  389 

Davis,  149  N.  Y.  539,  44  N.  E.  185 25,  27,  420,  421 

Day,  149  Supp.  221 190 

De  Graaf,  24  Misc.  147,  53  Supp.  591 119,  295,  454 

Dee,  148  Supp.  423;  aff.  161  App.  Div.  881,  145*  Supp.  1120;  aff.  210 

N.  Y.  625 77 

Dehnhardt,  N.  Y.  L:  J.,  April  7,  1916 538 

Delafield,  N.  Y.  L.  J.  January  24, 1916 277 

Delaney,  133  App.  Div.  409,  117  Supp.  838 178 

Delano,  176  N.  Y.  486,  68  N!  E.  871 Ill 

Demarest,  157  Supp.  653 274 

Demers,  41  Misc.  470,  24  Supp.  1109 98 

De  Peyster,  210  N.  Y.  216 167,  168,  175 

DeSala,  N.  Y.  L.  J.,  July  20,  1912. 426 

Deutsch,  107  App.  Div.  192,  95  Supp.  65 160 

Devlin  v.  Greenwich  Bank,  125  N.  Y.  756,  26  N.  E.  744 389 

De  Voe,  107  App.  Div.  245,  94  Supp.  1129 60 

Devoe,  171  N.  Y.  281,  63  N.  E.  1102 164 

DeWollf,  N.  Y.-  L.  J.,  February  24,  1913 412 

Dickey,  174  App.  Div.  467,  160  Supp.  646 • 212 

Dimon,  82  App.  Div.  107,  81  Supp.  428 299,  368,  397 

Dingman,  66  App.  Div.  228,  72  Supp.  694 460 

Dobson,  73  Misc.  170, 132  Supp.  472 105,  106 

Dormitzer,  N.  Y.  L.  J.,  February  6,  1913 298 

Doty  v.  Wilson,  47  N.  Y.  580 67 

Douglass  v.  Hazen,  8  App.  Div.  27,  40  Supp.  1012 196 

Dows,  167  N.  Y.  227,  60  N.  E.  439 26,  111,  522 

Drake,  94  Misc.  70, 157  Supp.  270 404 

Dreyfous,  18  Supp.  767,  28  Abb.  N.  C.  27 22 

DuBois,  163  Supp.  668 261,  282 

Dudley,  N.  Y.  L.  J.,  March  4,  1913. 412 

Duell  v.  Glynn,  191  N.  Y.  357,  84  N.  E.  282 457 

Duffy,  127  App.  Div.  74,  111  Supp.  77 73 

Dunham  v.  City  Trust  Co.,  115  App.  Div.  584,  101  Supp.  87;  aff. 

193  N.  Y.  642,  86  N.  E.  1123 354 

Dun,  40  Misc.  509,  82  Supp.  802 287 

Dunne,  N.  Y.  L.  J.  May  25, 1914 82 

Dunning,  48  Misc.  482,  96  Supp.  1110 57 

Dupuy  v.  Wurtz,  53  N.  Y.  556 150 

Durfee,  79  Misc.  655,  140  Supp.  594 132 


xxviii  INHERITANCE  TAXATION 

[References  are  to  pages'] 

Duryea,  128  App.  Div.  205,  112  Supp.  611 163 

Dusenberry,  2  State  Dept.  Rep.  501 261 

Dwight,  Edmund,  N.  Y.  L.  J.,  October  8,  1911;  aff.  149  App.  Div. 

912,  133  Supp.  1119 87 

Dwight,  J.  H.  B.,  N.  Y.  L.  J.,  January  19, 1915 455 

Dwight  v.  Gibb,  150  App.  Div.  573 ;  135  Supp.  431 57 


£ 

Earle,  74  App.  Div.  458,  77  Supp.  503 397,  444 

Eaton,  55  Misc.  472,  62  Supp.  1026 441 

Eaton,  79  Misc.  69, 140  Supp.  601. 538 

Ebbetts,  43  Misc.  575,  89  Supp.  544 58,  66 

Edgerton,  35  App.  Div.  125,  54  Supp.  700;  aff.  158  N.  Y.  671,  52 

N.  E.  1124 75,  94,  300,  366 

Edson,  38  App.  Div.  19,  56  Supp.  409;  aff.  159  N.  Y.  568,  54  N.  E. 

1092 180 

Edson  v.  Parsons,  85  Hun  263,  32  Supp.  1036;  aff.  155  N.  Y.  555,  50 

N.  E.  265 49 

Edwards,  85  Hun  436,  32  Supp.  901;  aff.  146  N.  Y.  380,  41  N.  E.  89.  54 

Eldridge,  29  Misc.  734,  62  Supp.  1026 130 

Electro  Tint  Co.  v.  Amer.  Hand  Co.,  130  App.  Div.  561, 115  Supp.  34.  395 

Elletson,  75  Misc.  582, 136  Supp.  455 538 

Elting,  78  Misc.  692,  140  Supp.  238 260 

Ely,  157  App.  Div.  658, 142  Supp.  714 398 

Ely,  149  Supp.  90 88,  303 

Embury,  20  Misc.  75,  45  Supp.  821;  aff.  19  App.  Div.  214,  45  Supp. 

881,  154  N.  Y.  746,  49  N.  E.  1096 28,  299,  323 

Eno,  N.  Y.  L.  J.,  April  24,  1913 212 

Enos,  61  Misc.  594 298 

Enston,  113  N.  Y.  174,  21  N.  E.  87 28,  33,  388 

Erbeling  v.  Erbeling,  61  Misc.  537, 115  Supp.  894 298 

Escoriaza,  N.  Y.  L.  J.,  November  15, 1914 94 

Everett,  3  State  Dept.  Rep.  450 * 415 

Eysel,  65  Misc.  432, 121  Supp.  1095 131 

F 

FairchiW  v.  Fairchild,  64  N.  Y.  471 281 

Farmer's  Loan  "send  Trust  Co.  v.  Kip,  192  N.  Y.  266,  85  N.  E.  59. ...  194 
Farrelly  v.  Emigrant  Inds.  Sav.  Bk.,  92  App.  Div.  529,  87  Supp.  54; 

aff.  179  N.  Y.  594,  72  N.  E.  1141 134 

Fay,  25  Misc.  468,  55  Supp.  749 97 

Fayerweather,  143  N.  Y.  114,  38  N.  E.  278 33 


TABLE  OF  CASES  CITED  xxix 

[References  are  to  pages] 
Fearing,  138  App.  Div.  881,  123  Supp.  396;  aff.  200  N.  Y.  340,  93 

N.  E.  956 117,  242,  245 

Field,  36  Misc.  279,  73  Supp.  512 208 

Field,  71  Misc.  396, 130  Supp.  195;  aff.  147  App.  Div.  927, 131  Supp. 

1114 ., 174 

First  National  Bank  v.  Broadway  National  Bank,  156  N.  Y.  459,  51 

N.  E.  398 395 

Fisch,  34  Misc.  146,  69  Supp.  493 389 

Fitch,  160  N.  Y.  87,  54  N.  E.  701 408 

Flatauer  v.  Loser,  211  N.  Y.  16 404 

Fleming,  48  Misc.  589,  98  Supp.  306 57 

Foster,  N.  Y.  L.  J.,  January  16,  1916;  aff.  174  App.  Div.  864 119 

Francis,  N.  Y.  L.  J.,  August  12,  1913;  aff.  163  App.. Div.  957,  148 

Supp.  1116  355 

Francis,  121  App.  Div.  129,  105  Supp.  643;  aff.  189  N.  Y.  554,  82 

N.  E.  1126 175 

Fraser,  92  N.  Y.  239 120 

Frazer  v.  People,  6  Dem.  174,  3  Supp.  134 457 

Frazier,  N.  Y.  L.  J.,  March  28,  1912 118 

Freedman  v.  Freedman,  4  Redf.  211 307 

Freund,  143  App.  Div.  335, 128  Supp.  48;  aff.  202  N.  Y.  556,  95  N.  E. 

1129 305,  363 

Friedlander,  N.  Y.  L.  J.,  March  8,  1911 369 

Froelich,  N.  Y.  L.  J.,  April  30,  1913 412 

Froment,  N.  Y.  L.  J.,  November  29,  1916 383 

Frost,  N.  Y.  L.  J.,  May  1,  1914 276 

Fuhrmann  v.  Von  Pustau,  126  App.  Div.  629,  111  Supp.  34 317 

Fuller,  62  App.  Div.  428,  71  Supp.  40 379,  411,  425 

Fulton,  30  Misc.  70 444 

G 

Gale,  83  Misc.  686,  145  Supp.  301 265,  387 

Gannon  v.  McGuire,  160  N.  Y.  476,  55  N.  E.  7 71 

Gans,  N.  Y.  L.  J.,  April  13,  1912 183 

Garland,  88  App.  Div.  380,  84  Supp.  630 520 

Garvey  v.  Clifford,  114  App.  Div.  193,  99  Supp.  555 73 

Gegan  v.  Union  Trust  Co.,  198  N.  Y.  541,  92  N.  E.  1085 68 

Gibbs,  60  Misc.  645, 113  Supp.  939 425 

Gibbes,  84  App.  Div.  510,  83  Supp.  53;  aff.  176  N.  Y.  565,  68  N.  E. 

1117 242 

Gibert,  96  Misc.  401,  160  Supp.  213;  rev;  176  App.  Div.  850 265 

Gibson,  N.  Y.  L.  J.,  March  3,  1914 87 

Gibson,  157  N.  Y.  680,  58  N.  E.  1090 442 

Gihon,  169  N.  Y.  443,  62  N.  E.  561 8, 183,  302,  303,  367,  461,  491 


[References  are  to  pages] 

Gilkinson  v.  Third  Ave.  R.  R.  Co.,  47  App.  Div.  472,  63  Supp.  792. ..  71 

Gilsey,  N.  Y.  L.  J.,  March  10,  1914 426 

Glendinning,  68  App.  Div.  125,  74  Supp.  190 260 

Godley  v.  Orandall  &  Godley  Go.,  153  App.  Div.  697, 139  Supp.  236.  287 

Golden,.N.  Y..L.  J.,  January  31,  1914 453 

Goodrich  v.  Rochester  Trust  and  S.  D.  Co.,  173  App.  Div.  577,  160 

Supp.  454  461 

Gordon,  186  N.  Y.  471,  79  N.  E.  722 259 

Gordon,  172  N.  Y.  25,  64  N.  E.  753 119 

Gould,  19  App.  Div.  352,  46  Supp.  506;  mod.  156  N.  Y.  423,  51  N.  E. 

287 .' 54,  269,  299,  300,  390,  391 

Granfield,  79  Misc.  374,  140  Supp.  922 191,  201 

Grant,  66  Hun  617, 16  Supp.  716 -. 195,  197 

Grant,  83  Misc.  257,  144  Supp.  567;  aff.  166  App.  Div.  921,  151 

Supp.  1119 155,  382,  405 

Graves,  52  Misc.  433,  103  Supp.  571 132 

Graves,  171  N.  Y.  40 174 

Gray  v.  Gray,  5  App.  Div.  132,  39  Supp.  57 118 

Green,  153  N.  Y.  223,  47  N.  E.  292 72,  84, 103,  105fc  159 

Green,  144  App.  Div.  232,  129  Supp.  54 122,  129 

Green,  Hettie  R.,  99   Misc.   582;   aff.   App.   Div.   June   30,   1917, 

Mem. 154,  158,  393 

Greenwood  v.  Holbrook,  111  N.  Y.  465, 18  N.  E.  711 50 

Griggs,  163  Supp.  1096 • 453 

Griswold  v.  Griswold,  4  Bradf.  216 304 

Grosser  v.  City  of  Rochester,  148  N.  Y.  235 128 

Grosvenor,  124  App.  Div.  331,  108  Supp.  926;  126  App.  Div.  953, 

111  Supp.  1121;  aff.  193  N.  Y.  652,  86  N.  E.  1124 314 

Guggenheim,  189  N.  Y.  561,  82  N.  E.  1127 201 

Guggenheim,  N.  Y.  L.  J.,  July  29,  1916 278 

Gulick,  N.  Y.  L.  J.  March  20, 1914 208 

Gumbinner,  92  Misc.  104, 155  Supp.  188 241 

H 

Hackett,  14  Misc.  282,  35  Supp.  1051 458 

Hadley,  43  Misc.  579,  89  Supp.  545 58,    66 

Haight,  152  App.  Div.  228, 136  Supp.  557. . '. 114 

Haggerty,  128  App.  Div.  479, 112  Supp.  1017;  aff.  194  N.  Y.  550,  87 

N.  E.  1120 114 

Haley,  89  Misc.  22,  152  Supp.  732 538 

Hall,  54  Hun  637,  7  Supp.  595 455 

Hall,  36  Misc.  618,  73  Supp.  1124 199 

Hallenbeck  v.  Hallenbeck,  103  App.  Div.  107,  93  Supp.  73 132 

Halligan,  82  Misc.  30,  143  Supp.  676 73 


TABLE  OF  CASES  CITED  xxxi 

[References  are  to  pages] 

Hallock,  42  Misc.  493,  87  Supp.  255 237 

Hamilton,  148  N.  Y.  310,  42  N.  E.  717 175 

Hamilton,  41  Misc.  268,  84  Supp.  44 447 

Hamlin  v.  Smith,  72  App.  Div.  601,  76  Supp.  258 368 

Hanford,  113  App.  Div.  894;  aff.  186  N.  Y.  547 455 

Harbeck,  161  N.  Y.  211,  55  N.  E.  850 26,  110,  521 

Hardin,  44  Misc.  441,  90  Supp.  95 60 

Hardner,  124  App.  Div.  77 163 

Harkness,  N.  Y.  L.  J.,  February  17,  1917 156 

Harris  v.  Clark,  3  N.  Y.  93 68 

Harris  v.  Murray,  28  N.  Y.  547 317 

Hart,  98  Misc.  515, 162  Supp:  716;  rev.  App.  Div.  July  14,  1917 385 

Harteau,  204  N.  Y.  292 188 

Hatch  v.  Bassett,  52  N.  Y.  359 t .  194 

Havemeyer,  32  Mise.  416,  66  Supp.  722 277 

Hawes,  162  App.  Div.  173, 147  Supp.  329;  aff.  221  N.  Y.  Mem 88 

Hayes  v.  Meyer,  35  N.  Y.  226 317 

Head,  N.  Y.  L.  J.,  December  22, 1911 412 

Heaton  on  Surrogates'  Courts 97,  156 

Hearn,  N.  Y.  L.  J.  July,  1917 291 

Heiser,  85  Misc.  271,  147  Supp;  557 131 

Hellman,  174  N.  Y.  254,  66  N.  E.  809 <  .260,  287 

Hemmerich  v.  Union  Dime  S.  I.,  205  N.  Y.  366,  98  N.  E.  499 67 

Henderson,  157  N.  Y.  423>  52  K  E.  183 445 

Hendricks,  3  Supp.  281 397 

Hendricks,  163  App.  Div.  413, 148  Supp.  511;  aff.  214  N.  Y.  663, ...  71 
Hermanni,  N.  Y.  L.  J.,  January  16,  1915;  aff.  168  App^  Div.  Mem. 

153  Supp.  1119  , 165 

Hernandez,  172  App.  Div.  467,  159  Supp:  59;  aff.  219  N.  Y.  Mem.. .  145 

152,  402,  405,  439 
Hess,  110  App.  Div.  476,  96  Supp.  990;  aff.  187  N.  Y.  554,  80  N.  E. 

1111 r 75,  94 

Hewitt,  181  N.  Y.  547,  74  N.  E.  1118 30,  257,  364 

Higgins,  N.  Y.  L.  J.,  December  16,  1914 173 

Higgins,  55  Misc.  175,  106  Supp.  465 174 

Hiles  v.  Fisher,  144  N.  Y.  306,  39  N.  E.  337 124,  128 

Hillman,  116  App.  Div.  186 246 

Hfarichs,  148  Supp.  912 121 

Hirsch,  83  Misc.  681, 145  Supp.  305 297 

Hirschbuerg,  N.  Y.  L.  J.,  November  20,  1914 284 

Hitchins,  43  Misc.  485,  89  Supp.  472;  aff.  181  N.  Y.  553,  74  N.  E. 

1118 200 

Hodges,  215  K  Y.  447, 109  N.  E.  559 32,  83, 165,  530 

Hoffman,  42  Misc.  90,  85  Supp.  1082 304 


INHERITANCE  TAXATION 

[References  are  to  pa-ges] 

Hoffman,  143  N.  Y.  327,  38  N.  E.  311 201,  521 

Hoffman,  161  App.  Div.  836, 146  Supp.  898;  aff.  212  N.  Y.  604 114 

Hogg,  156  App.  Div.  301,  141  Supp.  119 166 

Holly  v.  Gibbons,  176  N.  Y.  520,  68  N.  E.  889 368 

Holmes  v.  Roper,  141  N.  Y.  64,  36  N.  E.  180 67 

Holt,  N.  Y.  L.  J.,  March  16,  19i2 526 

Hoople,  179  N.  Y.  308,  72  N.  E.  229 451 

Hoosack,  39  Misc.  130,  78  Supp.  983 211 

Horler,  97  Misc.  587,  161  Supp.  957. . . .. 126 

Horn,  39  Misc.  133,  78  Supp.  979 259 

Horstman  v.  Flege,  172  N.  Y.  384,  65  N.  E.  202 120 

Horton,  217  N.  Y.  363,  111  N.  E.  1066 39,  404 

Houdayer,  150  N.  Y.  37,  44  N.  E.  718 20,  257,  443 

Howard,  54  Hun  305,  7  Supp.  594 455 

Howard,  94  Misc.  560, 157  Supp.  1114 175 

Howe,  86  App.  Div.  286,  83  Supp.  825;  aff.  176  N.  Y.  570,  68  N.  E. 

1118 208 

Howe,  112  N.  Y.  100,  19  N.  E.  513. 519 

Howell,  34  Misc.  40,  69  Supp.  505 •. .  174 

Hoyt,  86  Misc.  696, 149  Supp.  91 88,  303 

Hoyt,  44  Misc.  76,  89  Supp.  744 190 

Huber,  86  App.  Div.  458,  83  Supp.  769 203 

Huber  v.  Case,  93  App.  Div.  479,  87  Supp.  663 281 

Hughes  v.  Golden,  44  Misc.  128,  89  Supp.  765 177 

Hull,  111  App.  Div.  322,  97  Supp.  701;  aff.  186-  N.  Y.  586,  79  N.  E. 

1107 117 

Hull,  109  App.  Div.  248,  95  Supp.  819 378,  381,  411 

Hulse,  15  Supp.  770 95 

Hunt,  97  Misc.  233,  160  Supp.  1115 264 

Hunt  v.  Hunt,  72  N.  Y.  217 154 

Hunt  v.  Kingston,  3  Misc.  309,  23  Supp.  352 56 

Hurcomb,  36  Misc.  755,  74  Supp.  475 255,  278 

Hurst,  111  App.  Div.  460,  97  Supp.  697 367 

Hutchinson,  105  App.  Div.  487,  94  Supp.  354 191 

flutter,  N.  Y.  L.  J.,  December  3,  1914;  aff.  167  App.  Div.  930,  152 

Supp.  1119 301 

Hutton,  176  App.  Div.  217,  160  Supp.  223;  aff.  220  N.  Y.  210. .  .204,  418 

Hyde,  218  N.  Y.  55 427 

Hyman,  N.  Y.  L.  J.,  May  22, 1914 274 

Hynes  v.  McDermot,  82  N.  Y.  41 306 

I 

Irish,  28  Misc.  467 303 

Irwin,  36  Misc.  277;  73  Supp.  415 419 

Isham  v.  N.  Y.  Assn.  for  Poor,  177  N.  Y.  218,  69  N.  E.  367 184,  437 


TABLE  OF  CASES  CITED  xxxiii 

[References  ore  to  pages] 
J 

James,  144  N.  Y.  6,  38  N.  E.  961 18,  249,  317,  318 

Johnson,  37  Misc.  542,  75  Supp.  1046 426,  447 

Jones,  54  Misc.  202, 105  Supp.  932 446 

Jones,  28  Misc.  356,  59  Supp.  983;  69  App.  Div.  237,  74  Supp.  702; 

172  N.  Y.  575,  65  N.  E.  570 276,  283 

Joseph  v.  Herzog,  198  N.  Y.  456,  92  N.  E.  103 316 

Jourdan,  151  App.  Div.  8,  135  Supp.  172;  reversed  (on  dissenting 

opinion  below)  206  N.  Y.  653 538 

K 

Kahn,  N.  Y.  L.  J.  March  16,  1912 365 

Keahon,  60  Misc.  508,  113  Supp.  926 283,  288 

Kearney,  N.  Y.  L.  J.  May  4,  1905 58 

Keefe,  164  N.  Y.  352 443 

Keenan,  5  Supp.  200 380 

Keeney,  194  N.  Y.  281,  87  N.  E.  428;  aff.  222  U.  S.  525 32,  34,  84 

95,  103,  105 

Kelly,  29  Misc.  169,  60  Supp.  1005 173,  412 

Kelly  v.  Albany  Trust  Co.,  124  App.  Div.  99, 108  Supp.  214 132 

Kelly  v.  Beers,  194  N.  Y.  49,  86  N.  E.  980 131 

Kelly  v.  Home  Savings  Bank,  103  App.  Div.  141;  aff.  182  N.  Y.  568. .  132 

Kelsey  v.  Church,  112  App.  Div.  408,  98  Supp.  535 379,  456 

Kemp,  7  App.  Div.  609,  40  Supp.  1144;  aff.  151  N.  Y.  619,  45  N.  E. 

1132 264,  296 

Kene,  8  Misc.  102,  29  Supp.  1078 295 

Kennedy,  20  Misc.  531,  46  Supp.  906 311,  395 

Kennedy,  93  App.  Div.  27,  86  Supp.  1024 201 

Kennedy,  David,  113  App.  Div.  4,  99  Supp.  72 356,  389,  392 

Kennedy,  155  Supp.  192 270 

Kennedy,  J.  S.,  N.  Y.  L.  J.  March  8, 1911 271 

Kennedy,  Thos.  J.,  N.  Y.  L.  J.  August  11, 1915 300 

Kent 's  Commentaries,  vol.  2,  p.  348 68 

Kent  v.  Hopkins,  86  Hun  611,  33  Supp.  767 60 

Keough,  42  Misc.  387,  86  Supp.  807 311 

Kernochan,  104  N.  Y.  618, 11  N.  E.  149 365 

Kettle  v.  Baxter,  50  Misc.  428, 100  Supp.  529 161 

Keys,  N.  Y.  L.  J.  March  15, 1912 119 

Kidd,  188  N.  Y.  274,  80  N.  E.  924 47,  98,  103 

Kimbel  v.  Kimbel,  14  App.  Div.  570,  43  Supp.  900 118 

Kimberly,  150  N.  Y.  90,  44  N.  E.  945 181,  381 

King,  217  N.  Y.  358,  111  N.  E.  1060 115,  163 

King,  71  App.  Div.  581,  76  Supp.  220,  aff.  172  N.  Y.  616,  64  N.  E. 

1122 312,  314,  316 


xxxiv  INHERITANCE  TAXATION 

[References  are  to  pages] 

King,  51  Misc.  375,  101  Supp.  279 68,  132 

Kings  County  Trust  Co.,  69  Misc.  531,  127  Supp.  879 306,  367 

Kip,  N.  Y.  L.  J.,  March  28, 1912 538 

Kirtland,  94  Misc.  58,.  157  Supp.  378 160,  315 

Kissel,  65  Misc.  443,  121  Supp.  1088;  aff.  142  App.  Div.  134,  127 

Supp.  1127  117 

Klatzl,  216  N.  Y.  83, 110  N.  E.  181 125,  129 

Klauber,  N.  Y.  L.  J.,  May  17, 1913,  aff.  171  App.  Div.  908,  218  N.  Y. 

607 ... 290 

Kline,  65  Misc.  445,  121  Supp.  1090 132 

Knabe,  N.  Y.  L.  J.,  February  2,  1916 119 

Knoedler,  140  N.  Y.  377,  35  N.  E.  601 97,  235,  259 

Konvalinka  v.  Schlegel,  104  N.  Y.  125,  9  N.  E.  868 118 

Kubler,  N.  Y.  L.  J.,  August  6,  1915 459 

Kucielski,  144  App.  Div.  100,  128  Supp.  768 15,  174 

L 

LaFarge,  149  Supp.  535 311 

Lane,  157  App.  Div.  694,  142  Supp.  788 22 

Lane,  39  Misc.  522,  80  Supp.  381 388 

Langdon,  153  N.  Y.  6,  46  N.  E.  1034 201 

Lansing,  31  Misc.  148,  64  Supp.  1125 412,  418 

Lansing,  182  N.  Y.  238,  74  N.  E.  882 Ill,  522 

Lawrence,  N.  Y.  L.  J.,  February  15,  1915 389 

Lawrence,  96  App.  Div.  29,  88  Supp.  1028 ...  398 

Lawson,  N.  Y.  L.  J.,  January  3,  1914 213 

Laytin  v.  Davidson,  95  N.  Y.  263 309 

Leask,  130  App.  Div.  898, 197  K  Y.  193,  90  N.  E.  652 161 

Leask  v.  Hoagland,  64  N.  Y.  159 298 

Leavitt,  86  Misc.  609,  148  Supp.  758;  aff.  (sub.  nom.  Brann)  171 

App.  Div.  800,  157  Supp.  756 .... 181 

Leeds,  N,  Y.  L.  J.,  April  23,  1913 165 

Leeds,  N.  Y.  L.  J.,  June  2, 1914. 54 

Leggett,  N.  Y.  L.  J.,  January  13,  1911 365 

Leggett  v.  Stevens,  77  App.  Div.  612,  79  Supp.  289 196 

Lehr  v,  Jones,  74  App.  Div.  54,  77  Supp.  213 67 

Lennox,  N.  Y.  L.  J.,  June  11,  1908 305 

Leopold,  35  Misc.  369,  71  Supp.  1032. 246 

Leuff,  1  State  Dept.  Rep.  567 415 

Levy,  N.  Y.  L.  J.,  May  15,  1907,  aff.  122  App.  Div.  919,  107  Supp. 

1134 299 

Lewis,  129  App.  Div.  908,  194  N.  Y.  550,  88  N.  E.  1124 114 

Lewis  v.  Smith,  9  N.  Y.  502 120 

Lewis  v.  State,  96  N.  Y.  71 451 


TABLE  OF  CASES  CITED  xxxv 

[References  are  to  pages] 

Libolt,  102  App.  Div.  29,  92  Supp.  175 311 

Lind,  132  App.  Div.  321, 117  Supp.  49;  aff.  196  N.  Y.  570,  90  N.  B. 

1161 143 

Linkletter,  134  App.  Div.  309,  118  Supp.  878 164 

Linley,  N.  Y.  L.  J.,  February  19,  1914 420 

Lies,  39  Misc.  123,  78  Supp.  969 299,  304 

Livingston,  1  App.  Div.  568,  37  Supp.  463 264,  295 

Locke  v.  State,  140  N.  Y.  480,  35  N.  E.  476 451 

Loeb,  167  App.  Div.  588,  152  Supp.  879 168,  171 

Loeb,  N.  Y.  L.  J.,  January  13,  1914 265 

Loewi,  75  Misc.  57,  134  Supp.  679. 69,  389 

Logan  v.  Whitley,  129  App.  Div.  666,  114  Supp.  255. 96 

Lord,  111  App.  Div.  152,  97  Supp.  553,  aft.  186  N.  Y.  549,  79  N.  E. 

1110 208,  323 

Lorillard  v.  People,  6  Dem.  268 236 

Loster,  N.  Y.  L.  J.,  July  19,  1913 412 

Lowenf  eld,  N.  Y.  L.  J.,  June  27,  1916 261 

Lowndes,  60  Misc.  508,  113  Supp.  1114 408 

Lowry,  89  Misc.  226,  85  Supp.  924 427,  447 

Ludeke,  N.  Y.  L.  J.,  January  22,  1914 529 

Ludlow,  4  Misc.  594,  25  Supp.  989 299 

Lynn,  34  Misc.  681,  70  Supp.  730. 381 

Lyon,  144  App.  Div.  104,  128  Supp.  10041 172,  173 

Me 

McAvoy,  112  App.  Div.  377,  98  Supp.  437 173 

McCarthy,  5  Misc.  276,  25  Supp.  987 458 

McCartin,  N.  Y.  L.  J.,  December  5,  1913 172 

McClusky  v.  Cromwell,  11  N.  Y.  593 33 

McCormick,  206  N.  Y.  100,  99  K  E.  177 171 

McCullough,  N.  Y.  L.  J.,  October  27,  1914 151 

McDougall,  141  N.  Y.  21 195,  196 

McDowell,  217  N.  Y.  454 169 

McElroy  on  the  "  Tranfer  Tax  Law  " 264,  355,  396 

McElroy  v.  Albany  Savings  Bank,  8  App.  Div.  46,  40  Supp.  422. ..  132 

McElroy  v.  National  Savings  Bank,  8  App.  Div.  192,  40  Supp.  340. .  132 

McEwan,  51  Misc.  455,  101  Supp.  733 318 

McFarlane  v.  McFarlane,  82  Hun  238,  31  Supp.  272 281 

McGarvey,  6  Dem.  145 164 

McGee,  N.  Y.  L.  J.,  February  7,  1913;  aff.  160  App.  Div.  890,  144 

Supp.  1127  461 

McGovern,  N.  Y.  L.  J.,  March  26, 1903 58 

McGruer  v.  Abbott,  47  App.  Div.  191,  62  Supp.  123 440 

McGuire  v.  Murphy,  107  App.  Div.  104,  94  Supp.  1005 71 


xxxvi  INHERITANCE  TAXATION 

[References  ere  to  pages] 

McKelway,  121  N.  Y.  15,  116  N.  E.  348 36,  124,  139,  489 

McLean,  N.  Y.  L.  J.,  July  18,  1914 208 

McMahon,  28  Misc.  697,  60  Supp.  64 189 

McMillan,  126  App.  Div.  155,  110  Supp.  622 57 

McMullen,  92  Misc.  637,  157  Supp.  655 274 

McMurray,  96  App.  Div.  128,  89  Supp.  71 370 

McPherson,  104  N.  Y.  306,  10  N.  E.  685 37,  383 

M 

Mahlstedt,  67  App.  Div.  176,  73  Supp.  818;  aff.  171  N.  Y.  652,  63 

N.  E.  1119  76 

Majot,  199  N.  Y.  29,  92  N.  E.  402 145 

Malcolmson,  N.  Y.  L.  J.,  June  20,  1912 271 

Manning,  169  N.  Y.  449,  62  N.  E.  565 420,  421 

Maresi,  74  App.  Div.  76,  77  Supp.  76 191,  295,  305 

Marks,  40  Misc.  507,  82  Supp.  803 303 

Marsh,  5  Misc.  428,  26  Supp.  718 57 

Marshing,  N.  Y.  L.  J.,  March  6,  1907 460 

Martin,  173  App.  Div.  1,  158  Supp.  915;  appeal  dismissed  219  N.  Y. 

557,  114  N.  E.  1071 149,  150,  442 

Martinez,  160  Supp.  1121 119 

Marx,  117  App.  Div.  890,  103  Supp.  446 460 

Mason,  120  App.  Div.  738,  105  Supp.  667;  aff.  sub.  nom.  Naylor, 

189  N.  Y.  556,  82  N.  E.  1129. . . '. 200,  419 

Mason,  69  Misc.  280,  126  Supp.  998 536,  538 

Masury,  28  App.  Div.  580;  aff.  159  N.  Y.  532,  53  N.  E.  1127 88 

Mather,  90  App.  Div.  382,  85  Supp.  657;  aff.  179  N.  Y.  526,  71  N.  E. 

1134 25,  448 

Matthews  v.  Brooklyn  Sav.  Bank,  208  N.  Y.  508,  102  N.  E.  520. ...  73 
Maverick,  135  App.  Div.  44,  119  Supp.  914;  aff.  198  N.  Y.  618,  92 

N.  E.  1084 300,  366 

Meehan,  59  App.  Div.  156,  69  Supp.  9 132 

Menagh  v.  Whitehall,  52  N.  Y.  146 261 

Mergentime,  129  App.  Div.  367,  113  Supp.  948;  aff.  195  N.  Y.  572, 

88  N.  E.  1125 168,  173 

Merriam,  141  N.  Y.  479,  36  N.  E.  505;  aff.  163  U.  S.  625,  16  Sup. 

Ct.  Rep.  1073  15,  175 

Merritt,  155  App.  Div.  228,  140  Supp.  13 25,  163 

Meserole,  98  Misc.  105,  162  Supp.  414 87, 165,  200 

Messman  v.  Egenberger,  46  App.  Div.  46,  61  Supp.  556 60 

Meyer,  83  App.  Div.  381,  82  Supp.  329 22 

Meyer,  209  N.  Y.  386,  103  N.  E.  713 30,  265,  460 

Meyer,  N.  Y.  L.  J.,  January  31,  1914 455 


TABLE  or  CASES  CITED  xxxvii 

[References  ore  to  pages] 

Michaelis,  N.  Y.  L.  J.,  August  11,  1915 297 

Middleworth  v.  Ordway,  191  N.  Y.  404,  84  N.  E.  291 49 

Miller,  77  App.  Div.  473,  78  Supp.  930 93 

Miller,  110  N.  Y.  216,  18  N.  E.  139 36,  387 

Miller  v.  Miller,  91  N.  Y.  315 56 

Mills,  86  App.  Div.  555,  67  Supp.  956;  aff.  177  N.  Y.  562,  69  N.  E. 

1127 45,  178 

Mills,  172  App.  Div.  530, 158  Supp.  1100 ;  aff.  219  N.  Y.  Mem 70 

75,  82,  394,  427 

Millward,  6  Misc.  425,  27  Supp.  286 299 

Milne,  76  Hun  328,  27  Supp.  727 520 

Mitchell,  N.  Y.  L.  J.,  March  9,  1912 392 

Mitchell,  N.  Y.  L.  J.,  November  22,  1913 115 

Mock,  113  App.  Div.  913, 49  Misc.  283 520 

Moebus,  —  App.  Div.  — ,  165  Supp.  887 128 

Moenich,  39  Misc.  480,  80  Supp.  222 36 

Moller  v.  Lincoln,  S.  D.  Co.,  174  App.  Div.  458 353 

Montieth,  27  Misc.  163,  58  Supp.  379 447 

Moore,  90  Hun  62,  35  Supp.  782 453 

Moore,  66  Misc.  116, 122  Supp.  828 35 

Moore,  97  Misc.  238, 162  Supp.  213 267,  285 

Moore  v.  Fingar,  131  App.  Div.  399, 115  Supp.  1035 132 

Morgan,  Accounting  of,  104  N.  Y.  74,  9  N.  E.  861 60 

Morgan,  Annie  C.,  164  App.  Div.  854, 149  Supp.  1022;  aff.  215  N.  Y. 

Mem 384,  446 

Morgan,  Annie  T.,  36  Misc.  753,  74  Supp.  478 397 

Morgan,  Geo.,  150  N.  Y.  35,  44  N.  E.  1126 244,  246 

Morgan,  95  Misc.  451,  159  Supp.  105 152 

Morgan  v.  Cowie,  49  App.  Div.  612,  63  Supp.  608 369 

Morgan  v.  Warner,  45  App.  Div.  424,  60  Supp.  963;  aff.  162  N.  Y. 

612,  57  N.  E.  1118 297,  381 

Morss,  85  Misc.  676, 149  Supp.  41 398 

Moses,  138  App.  Div.  525, 123  Supp.  443 167,  174 

Moulton,  11  Misc.  694,  33  Supp.  578 160 

Mowry,  114  App.  Div.  904,  100  Supp.  1131 419 

Mullon,  74  Hun  358,  26  Supp.  683 283 

Murdock  v.  Ward,  67  N.  Y.  387 164 

Murphy,  32  App.  Div.  627,  53  Supp.  1110;  aff.  157  N.  Y.  679,  51 

N.  E.  1092 264,  295 

Murphy,  4  Misc.  230,  25  Supp.  107 181 

Murray,  92  Misc.  100,  155  Supp.  185 46,  51 

Mutual  Life  Ins.  Co.  v.  Nicholas,  144  App.  Div.  95,  128  Supp.  902. .  394 

Myers,  129  Supp.  124  131 

Myers,  N.  Y.  L.  J.,  November  22,  1913 184 


xxxviii  INHERITANCE  TAXATION 


Naylor,  189  N.  Y.  556,  82  N.  E.  1129 419 

Neher,  95  Misc.  68,  158  Supp.  454 191 

Neustadter,  N.  Y.  L.  J.,  August  16,  1913 171 

Newcomb,  71  App.  Div.  606,  76  Supp.  222;  aff.  172  N.  Y.  608,  64 

N.  E.  1123 .248,  365 

Newcomb,  192  N.  Y.  238,  84  N.  E.  950 149 

Newman,  91  Misc.  200, 154  Supp.  1107 276,  391 

Nichol,  91  Hun  134,  36  Supp.  538 162 

Nichols,  60  Misc.  299,  113  Supp.  277 58,  66 

Niles,  N.  Y.  L.  J.,  January  5>  1912 526 

Niven,  29  Misc.  550,  61  Supp.  956 446 

Norton,  96  Misc.  152, 159  Supp.  619;  aff.  —  App.  Div.—,  162  Supp. 

1133 156 

O 

O 'Berry,  91  App.  Div.  3,  86  Supp.  269;  aff.  179  N.  Y.  285,  72  N.  E. 

109 200,  445 

O'Connell,  33  App.  Div.  483 66 

O'Donohue,  44  App.  Div.  186,  59  Supp.  1087,  60  Supp.  690 379 

Offerman,  25  App.  Div.  94,  48  Supp.  993 237,  264,  295 

Ogsbury,  7  App.  Div.  71,  39  Supp.  987 85 

Olcott  v.  Baldwin,  190  N.  Y.  90,  82  N.  E.  748 309 

O'Neil,  91  N.  Y.  516 33 

Ormiston,  N.  Y.  L.  J.,  August  14,  1915 291 

Orvis,  —  App.  Div.  — ,  166  Supp.  126 100,  279 

Osborne,  153  App.  Div.  312,  138  Supp.  18 188 

Overheieer  v.  Lackey,  207  N.  Y.  229 130 

P 

Page,  N.  Y.  L.  J.,  April  13,  1912 257 

Page,  39  Misc.  220,  79  Supp.  382 56,    66 

Palm,  148  Supp.  1044 73 

Palmer,  John,  117  App.  Div.  360,  102  Supp.  236 70,  388,  389 

Palmer,  Potter,  183  N.  Y.  238,  76  N.  E.  16 251 

Palmer,  S.  A.  L.,  33  App.  Div.  307,  53  Supp.  847;  aff.  158  N.  Y.  669, 

52  N.  E.  1125 173 

Palmer  v.  Culbertson,  143  N.  Y.  213,  38  N.  E.  199 61 

Pancost,  89  Misc.  110, 152  Supp.  724 274 

Park,  8  Misc.  550,  29  Supp.  1081 455 

Parmenter  v.  State,  135  N.  Y.  154,  31  N.  E.  1035 451 

Parsons,  39  Misc.  126,  78  Supp.  975 196 


TABLE  OF  CASES  CITED  xxxix 

[References  are  to  pages] 

Parsons  on  Contracts,  5th  ed.,  15,  §  1 67 

Parsons,  51  Misc.  370, 101  Supp.  430;  117  App.  Div.  321,  102  Supp. 

168 , 97,  260,  278 

Patterson,  146  N.  Y.  327,  40  N.  E.  990 405 

Patterson,  146  App.  Div.  286, 130  Supp.  970;  aff.  204  N.  Y.  677 85 

Pearsail,  149  Supp.  36 458 

Peck,  53  Misc.  535,  109  Supp.  1083 57 

Peck,  149  App.  Div.  912,  133  Supp.  1136 388 

Peck,  2  Connoly  201,  9  Supp.  465 302 

Pell,  171  N.  Y.  48,  63  N.  E.  789 25,  33,  139,  200,  489,  522 

Penfold,  W.  H.,  216  N.  Y.  171, 110  N.  E.  499 304 

Penfold,  Josephine,  216  N.  Y.  163;  110  N.  E.  497 30,  262 

People  v.  Coleman,  107  N.  Y.  541, 14  N.  E.  431 270 

People  v.  Dennison,  84  N.  Y.  272 451 

People  v.  Feitner,  167  N.  Y.  1,  60  N.  E.  265 260 

People  ex  rel.  Hatch  v.  Reardon,  185  N.  Y.  531 250 

People  ex  rel.  Lown  v.  Cook,  158  App.  Div.  74,  142  Supp.  692;  aff. 

209  N.  Y.  578 454,  456 

People  ex  rel.  McKnight  v.  Glynn,  56  Misc.  35, 106  Supp.  956 379 

381,  382 
People  ex  rel.  McNeile  v.  Glynn,  128  App.  Div.  257, 112  Supp.  695.  379 

People  v.  Mercantile  S.  D.  Co.,  159  App.  Div.  98, 143  Supp.  849 352 

People  v.  Prout,  53  Hun  541,  6  Supp.  457 452 

People  ex  rel.  Bipley  v.  Williams,  69  Misc.  402,  127  Supp.  749 456 

People  v.  Roberts,  159  N.  Y.  70,  53  N.  E.  685 283 

People  v.  State  Tax  Commission,  174  App.  Div.  320, 160  Supp.  854.  241 
People  ex  rel.  U.  S.  A.  P.  P.  Co.  v.  Knight,  174  N.  Y.  475,  67  N.  E. 

65 14 

Perry,  129  App.  Div.  587, 114  Supp.  246 67 

Peters,  69  App.  Div.  465,  74  Supp.  1028 381 

Pettit,  65  App.  Div.  30,  72  Supp.  469;  aff.  171  N.  Y.  654,  63  N.  E. 

1121 33,    36 

Phalen  v.  U.  S.  Trust  Co.,  186  N.  Y.  178,  78  N.  E.  943 47 

Phipps,  77  Hun  325,  28  Supp.  330;  aff.  143  N.  Y.  641,  37  N.  E.  823.  182 

Pitou,  N.  Y.  L.  J.,  February  14,  1914 271 

Pitou,  79  Misc.  384,  140  Supp.  919 131 

Platt,  8  Misc.  144,  29  Supp.  396 454 

Plum,  37  Misc.  466,  75  Supp.  740 204 

Plummer,  161  N.  Y.  631,  57  N.  E.  1122  (affirming  30  Misc.  19) ....  251 

Polhemus,  84  Misc.  332, 145  Supp.  1107 96 

Porter,  67  Misc.  19, 124  Supp.  676 ;  aff.  148  App.  Div.  896, 132  Supp. 

1143 311,  314,  316 

Post,  85  App.  Div.  611,  82  Supp.  1079 439 

Post,  5  App.  Div.  113,  38  Supp.  977 425 


xl  INHERITANCE  TAXATION* 

[References  we  to  pages} 

Post,  N.  Y.  L.  J.,  August  1,  1916 193 

Potter,  51  App.  Div.  512,  64  Supp.  1013 Ill 

Potter,  139  App.  Div.  905,  124  Supp.  1126;  aff.  199  N.  Y.  561,  93 

N.  E.  378 198 

Powell  v.  Waldron,  89  N.  Y.  328 260 

Preston,  75  App.  Div.  250,  78  Supp.  91 245 

Preston  v.  Fitch,  137  N.  Y.  41,  33  N.  E.  77 261 

Price,  62  Misc.  149,  116  Supp.  283 77 

Price,  McCormick  Co.,  69  App.  Div.  37,  74  Supp.  624 317 

Prime,  136  N.  Y.  347,  32  N.  E.  1091 28,  172 

Probst,  40  Misc.  431,  82  Supp.  396 .' 282 

Proctor,  41  Misc.  79,  83  Supp.  643 389 

Purdy,  24  Misc.  301,  53  Supp.  735 367 

Pulitzer,  N.  Y.  L.  J.,  December  10,  1912 ' 286 

Pullman,  46  App.  Div.  574,  62  Supp.  395 251,  277 

Q 

Quinn,  N.  Y.  L.  J.,  September  25,  1911 131 

B 

Baimbouville,  N.  Y.  L.  J.,  July  27,  1916 315 

Raleigh,  75  Misc.  55,  134  Supp.  684 394 

Ramsdill,  190  N.  Y.  492,  83  N.  E.  584 21 

Ray,  13  Misc.  480,  35  Supp.  481 164 

Read,  204  N.  Y.  672 452 

Reed,  98  Misc.  102,  162  Supp.  412 53,  302 

Rees,  208  N.  Y.  590 276 

Reeves  on  Real  Property,  Vol.  II,  p.  689 123 

Reinhardt  v.  Reinhardt,  134  App.  Div.  440,  119  Supp.  285 316 

Remsen  v.  Wheeler,  105  N.  Y.  573,  12  N.  E.  564 323 

Reynolds,  163  Supp.  803 420 

Rhoades,  120  App.  Div.  822;  aff.  190  N.  Y.  525,  83  N.  E.  1130 259 

Rice,  56  App.  Div.  253,  61  Supp.  911,  68  Supp.  1147 299,  397,  418 

Ridden  v.  Thrall,  125  N.  Y.  572,  26  N.  E.  627 75 

Riemann,  42  Misc.  648,  87  Supp.  731 119 

Riley,  86  Misc.  628,  148  Supp.  623 151 

Ripley,  122  App.  Div.  419,  106  Supp.  844;  aff.  192  N.  Y.  536,  84 

N.  E.  1120 115 

Robertson  v.  Brulatour,  188  N.  Y.  301,  80  N.  E.  938 188 

Robins  v.  McClure,  100  N.  Y.  328,  3  N.  E.  663 122 

Robinson,  37  Misc.  336,  75  Supp.  490 306 

Robinson,  80  Misc.  458,  142  Supp.  456;  aff.  212  N.  Y.  548 171 

Rockefeller,  177  App.  Div.  786,  165  Supp.  154 35,  167,  420,  427 


TABLE  OF  CASES  CITED  xli 

[References  are  to  pages] 

Rockwell  v.  Gregory,  4  Hun  606 56 

Roebuck,  79  Misc.  589,  140  Supp.  1107 163 

Roessle  v.  Roessle,  81  Misc.  558,  142  Supp.  984 120 

Rogers,  71  App.  Div.  461,  75  Supp.  835;  aff.  172  N.  Y.  617,  64  N.  E. 

1125 55,  111 

Rogers,  149  Supp.  462 194 

Rogers,  83  App.  Div.  642,  82  Supp.  1113;  affirming  N.  Y.  L.  J., 

January  24,  1903 152 

Rook,  98  Misc.  544,  164  Supp.  742 353 

Roos,  90  Misc.  521,  154  Supp.  939 276 

Roosevelt,  143  N.  Y.  120,  38  N.  E.  281 200 

Rosenbaum,  N.  Y.  L.  J.,  August  7,  1914 240 

Rosenberg,  N.  Y.  L.  J.,  May  9,  1908,  114  Supp.  726 286 

Rosendahl,  40  Misc.  542,  82  Supp.  992 520 

Rothfeld,  N.  Y.  L.  J.,  January  4,  1914 324 

Rothschild,  86  Misc.  364,  148  Supp.  368 152 

Rothschild,  63  Misc.  615,  118  Supp.  654 367 

Rudolph,  92  Misc.  347,  156  Supp.  825 74 

Runcie,  36  Misc.  607,  73  Supp.  1120 194 

Rundel,  —  App.  Div.  — ,  Fourth  Dept,  July,  1917 77 

Russell,  168  N.  Y.  169,  61  N.  E.  166 123 

Russell,  N.  Y.  L.  J.,  June  1, 1914 87 

Russell,  148  Supp.  272 306 

Russell  v.  McCall,  141  N.  Y.  437,  36  N.  E.  498 261 

Rutherford,  88  Misc.  414,  150  Supp.  734 151 

Ryan,  3  Supp.  136 36 

St.  John  v.  Andrews  Institute,  191  N.  Y.  254,  83  N.  E.  981 172 

Sanford,  66  Misc.  395,  123  Supp.  284 302 

Sanford  v.  Sanford,  45  N.  Y.  723 135 

Sauer,  89  Misc.  105,  151  Supp.  465 56 

Saunders,  86  Misc.  582,  149  Supp.  461 442 

Saunders,  77  Misc.  54,  137  Supp.  438;  aff.  211  N.  Y.  541. .  .171,  310,  367 

Savage  v.  Burnham,  17  N.  Y.  561 120 

Savage  v.  O'Neil,  44  N.  Y.  298 306 

Schermerhorn,  38  App.  Div.  350,  57  Supp.  26 418 

Schermerhorn,  N.  Y.  L.  J.,  June  26,  1913 88 

Schmidt,  39  Misc.  77,  78  Supp.  879 384 

Schumacher,  N.  Y.  L.  J.,  March  13,  1914 426 

Schumacher,  N.  Y.  L.  J.,  July  29,  1914 453 

Schutz  v.  Morette,  146  N.  Y.  137,  40  N.  E.  780 368 

Schwarz,  156  App.  Div.  931,  141  Supp.  349;  aff.  209  N.  Y.  mem 538 

Scott,  208  N.  Y.  602 445 

Scrimgeour,  80  App.  Div.  388,  80  Supp.  636;  aff.  175  N.  Y.  507,  67 

N.  E.  1089 411,  445 


xlii  INHERITANCE  TAXATION 

[References  are  to  pages] 

Seabury  v.  Bowen,  3  Bradf.  207 304 

Seaman,  147  N.  Y.  69,  41  N.  E.  401 22,  201 

Seaver,  63  App.  Div.  283,  71  Supp.  544 Ill,  408 

Secor  v.  Tradesmen's  National  Bank,  92  App.  Div.  241 261 

Seligman,  170  App.  Div.  837,  156  Supp.  648;  aff.  219  N.  Y.  141. ..  212 

Seymour,  144  App.  Div.  151,  128  Supp.  775 440 

Sharer,  36  Misc.  502,  73  Supp.  1057 68,  390 

Shearson,  174  App.  Div.  866;  aff.  220  N.  Y.  mem 202,  418 

Sherar,  25  Misc.  138,  54  Supp.  930 444 

Sheridan  v.  Tucker,  145  App.  Div.  145,  129  Supp.  18 394 

Sherill  v.  Christ  Church,  121  N.  Y.  701,  25  N.  E.  50 36 

Sherman,  153  N.  Y.  1,  46  N.  E.  1032 14 

Sherwell,  125  N.  Y.  376,  26  N.  E.  464 11 

Shields,  68  Misc.  264,  124  Supp.  1003 367 

Silkman,  121  App.  Div.  202,  105  Supp.  872 283,  284,  288,  293 

Silliman,  79  App.  Div.  98,  80  Supp.  336;  aff.  175  N.  Y.  513,  67  N.  E. 

1090 367,  446 

Simmons,  N.  Y.  L.  J.,  June  14,  1912 414 

Simon  v.  Etgen,  213  N.  Y.  589 391 

Simpson  v.  Jersey  City  Contracting  Co.,  165  N.  Y.  193 250,  252 

Skinner,  45  Misc.  559,  92  Supp.  972;  mod.  106  App.  Div.  217,  94 

Supp.  144 105,  106,  262,  295,  368,  448,  454 

Slater  v.  Slater,  175  N.  Y.  143,  67  N.  E.  224 286 

Slee  v.  Kings  County  Savings  Inet.,  78  App.  Div.  534,  79  Supp.  630.  131 

Sloane,  154  N.  Y.  107,  47  N.  E.  978 25 

Slosson,  87  Misc.  517,  149  Supp.  797;  aff.  168  App.  Div.  891,  152 

Supp.  690;  rev.  216  N.  Y.  79,  110  N.  E.  166 55,  115,  197 

Smith,  14  Misc.  169,  35  Supp.  701 297 

Smith,  85  Misc.  636,  149  Supp.  24 183 

Smith,  Albert  D.,  N.  Y.  L.  J.,  March  4, 1914 529 

Smith,  E.  H.,  40  App.  Div.  480,  58  Supp.  128 412 

Smith,  E.  H.,  71  App.  Div.  602,  76  Supp.  185 273 

Smith,  Johnathan,  150  App.  Div.  805,  135  Supp.  240 200 

Smith,  Julia  A.,  77  Hun  134 172 

Smith,  W.  A.,  80  Misc.  140, 141  Supp.  798 47 

Smith  v.  Browning,  171  App.  Div.  279,  157  Supp.  71 177 

Smith  v.  Cornell,  111  N.  Y.  554,  19  N.  E.  271 304 

Smith  v.  Kearney,  2  Bart.  Ch.  533 297 

Solley  v.  Westcott,  43  Misc.  188,  88  Supp.  297 194 

Somerville,  20  Supp.  76 67 

Sondheim,  69  App.  Div.  5,  74  Supp.  510 378,  439 

Spaulding,  49  App.  Div.  541,  63  Supp.  694;  aff.  163  N.  Y.  607,  57 

N.  E.  1124 75,  76,    94 

Spencer,  4  Supp.  395,  1  Connoly  208 162 


TABLE  OF  CASES  CITED 


[References  are  to  pages] 
Spencer,  190  N.  Y.  517,  83  N.  E.  1132,  193  N.  Y.  613  ..............  114 

Spingarn,  96  Misc.  141,  159  Supp.  605;  rev.  175  App.  Div.  806,  162 

Supp.  695   ..........................................  206,  410,  415 

Spring,  75  Mise,  586,  136  Supp.  174  .............................  131 

Starbuck,  63  Misc.  156,  116  Supp.  1030;  aff.  201  N.  Y.  531,  94  N.  E. 

1098  ...................................................  121,  129 

Stebbins,  52  Misc.  438,  103  Supp.  563  ...........................  132 

Steele,  98  Misc.  180,  162  Supp.  718  ..........................  301,  309 

Steinwender,  172  App.  Div.  871,  158  Supp.  779;  aff.  121  N.  Y. 

mem  ...................................................  418,  439 

Stelz  v.  Shreck,  128  N.  Y.  263,  28  N.  E.  510  ..................  127,  128 

Sterry,  N.  Y.  L.  J.,  April  30,  1912  ...............................  183 

Stewart,  131  N.  Y.  274,  30  N.  E.  184  ......................  34,  201,  323 

Stickney,  185  N.  Y.  107,  77  N.  E.  993  ............................  443 

Stiger,  7  Misc.  268,  28  Supp.  163  ...........................  .....  178 

Stiles,  64  Misc.  658,  120  Supp.  714  .............................  311 

Stilwell,  34  Supp.  1123  .........................................  163 

Stockwell,  158  Supp.  320  .......................................     53 

Stone,  56  Misc.  247,  107  Supp.  385  ..............................  420 

Stone,  N.  Y.  L.  J.,  February  18,  1911  ............................  388 

Strang,  117  App.  Div.  796,  102  Supp.  1062  ........................  176 

Straus,  N.  Y.  L.  J.,  October  9,  1911  ..............................  281 

Strobel,  39  Supp.  169;  aff.  5  App.  Div.  621  ....................  41,    42 

Stuart  v.  Palmer,  74  N.  Y.  186  .................................  323 

Stuyvesant,  72  Misc.  295,  131  Supp.  197  .........................  120 

Sudds,  32  Misc.  182,  66  Supp.  231  ..............................  459 

Sullivan,  94  Mise.  529,  159  Supp.  616  ...........................  130 

Sutton,  3  App.  Div.  208,  38  Supp.  277;  aff.  149  N.  Y.  618,  44  N.  E. 

1128  ............................................  237,  264,  295,  363 

Swarthout  v.  Banier,  143  N.  Y.  499  ..............................  197 

Sweetland,  20  Supp.  310  ........................................  162 

Swift,  137  K  Y.  77,  32  N.  E.  1096  ................  45,  236,  237,  362,  397 

T 

Telfeyan,  N.  Y.  L.  J.,  January  31,  1917  ..........................  171 

Teller,  161  Supp.  1110;  rev.  165  Supp.  517  ......................  140 

Terry,  218  N.  Y.  218,  112  N.  E.  931  ......................  193,  207,  212 

Terry  v.  Rector  St.  S.  Church,  79  App.  Div.  527,  81  Supp.  119  ____  197 

Thayer,  193  N.  Y.  430,  86  N.  E.  462  ............................  251 

Thayer  v.  Burr,  201  N.  Y.  155,  94  N.  E.  604  ......................  188 

Thomas,  3  Misc.  388,  24  Supp.  713  ..............................  260 

Thomas,  33  Mise.  729,  68  Supp.  1116  ............................  122 

Thomas,  39  Misc.  223,  79  Supp.  571  .............................  367 

Thomas  v.  Wolford,  49  Hun  145,  1  Supp.  610.  ..........  .196 


xliv  INHERITANCE  TAXATION 

[References  are  to  pages] 

Thompson,  85  Misc.  291,  147  Supp.  157 390 

Thompson,  81  Misc.  86 390 

Thompson,  57  App.  Div.  317,  68  Supp.  18 381,  425 

Thompson,  167  App.  Div.  356, 153  Supp.  164;  aff.  217  N.  Y.  609.135,  530 

Thompson  v.  €armichael,  3  Sandf .  120 60 

Thome,  44  App.  Div.  8,  60  Supp.  419;  appeal  dis.  162  N.  Y.  238 75 

94,  442 

Thrall,  157  N.  Y.  46,  51  N.  E.  411 302 

Thurber  v.  Townsend,  22  N.  Y.  517 121 

Tiedemann  on  Real  Property,  2d  ed.,  §  237 123 

Tilden  v.  Green,  130  N.  Y.  29,  28  N.  E.  880 169 

Tiffany,  143  N.  Y.  327,  128  Supp.  106;  aff.  202  N.  Y.  550 243,  245 

Tilley,  166  App.  Div.  240, 151  Supp.  79;  aff.  215  N.  Y.  702.  .129, 133,  530 

Tillinghast,  Louise,  94  Misc.  50,  157  Supp.  382 210 

Tillinghast,  William  H.,  94  Misc.  76,  157  Supp.  379 210,  455 

Title  Guarantee  and  Trust  Co.,  81  Misc.  106,  142  Supp.  1070;  mod. 

159  App.  Div.  803 166 

Tompkins,  N.  Y.  L.  J.,  August  11,  1913. ." 209 

Tompkins  v.  Fanton,  3  Dem.  4 195 

Tompkins  v.  Leary,  134  App.  Div.  114 389 

Totten,  179  N.  Y.  112,  71  N.  E.  748 73 

Townsend,  215  N.  Y.  442 170,  389,  449 

Tracy,  86  Supp.  1024 .- 420 

Tracy,  179  N.  Y.  501,  72  N.  E.  519 190 

Travis,  19  Misc.  393,  44  Supp.  349 489 

Trelease,  49  Misc.  207,  96  Supp.  318;  aff.  115  App.  Div.  645 197 

Tremberger,  N.  Y.  L.  J.,  October  3,  1913 295 

Tucker,  27  Misc.  616,  59  Supp.  699 209 

Tuigg,  15  Supp.  548,  2  Connoly  633 297 

Turner,  82  Misc.  25,  143  Supp.  692 391 

Turfler,  1  Misc.  58,  23  Supp.  135 60 

Tuttle,  N.  Y.  L.  J.,  June  9,  1914 309 

Twenty-Third  Street  Baptist  Church,  117  N.  Y.  601,  23  N.  E.  177. .     67 

U 

Ullmann,  137  N.  Y.  403,  33  N.  E.  480 380,  381 

Underbill,  20  Supp.  134,  2  Connoly  462 302 

U.  S.  Trust  Co.,  117  App.  Div.  178,  102  Supp.  271;  aff.  189  N.  Y. 

500,  81  N.  E.  1177 73 

U.  S.  Trust  Co.  v.  Hart,  150  App.  Div.  413,  135  Supp.  81;  aff.  208 

N.  Y.  617,  102  N.  E.  1115 151 


TABLE  or  CASES  CITED  xlv 

[References  are  to  pages} 
V 

Yail  v.  Vail,  10  Barb.  69 60 

Valentine,  147  Supp.  231 272 

Valentine,  88  Misc.  397,  150  Supp.  732 415 

Valentine,  M.  A.,  N.  Y.  L.  J.,  June  22,  1915 412 

Valentine,  163  App.  Div.  843,  147  Supp.  1146 274 

Vallance  v.  Bausch,  28  Barb.  633 122 

Van  Blariean  v.  Larson,  130  Supp.  925 120,  164 

Van  Brocklen  v.  Smeallie,  140  N.  Y.  70,  35  N.  E.  415 281 

Vanderbilt,  50  App.  Div.  246,  63  Supp.  1079;  aff.  163  N.  Y.  597,  57 

N.  E.  1127 32,  111,  140 

Vanderbilt,  68  App.  Div.  27,  74  Supp.  450 367 

Vanderbilt,  172  N.  Y.  69,  64  N.  E.  782 8,  142,  201 

Van  Kleeck,  121  N.  Y.  701,  25  N.  E.  50 36 

Vanneck,  175  App.  Div.  363,  161  Supp.  893 209,  309 

Van  Nest,  N.  Y.  L.  J.,  November  8,  1913;  aff.  168  App.  Div.  mem. .  447 

Van  Pelt,  63  Misc.  616, 118  Supp.  65 305 

Van  Rensselaer,  N.  Y.  L.  J.,  October  11,  1912 306 

Van  Scoy,  81  App.  Div.  655,  81  Supp.  1146 188 

Vassar,  127  N.  Y.  1,  27  N.  E.  394 30,  364 

Vernon  v.  Veraon,  53  N.  Y.  351 120 

Victor,  160  App.  Div.  32,  144  Supp.  918 439 

Vinot,  7  Supp.  517 300 

Vivianti,  63  Misc.  618,  118  Supp.  680;  rev.  138  App.  Div.  281,  122 

Supp.  954;  appeal  dis.  204  N.  Y.  513 279,  283,  287,  442 

Vivianti  (second  appeal),  146  App.  Div.  942,  131  Supp.  1148;  aff. 

206  N.  Y.  656 119,  240,  283 

Von  Au  v.  Magenheimer,  115  App.  Div.  84,  100  Supp.  659 285,  288 

Von  Au  v.  Magenheimer  (second  aopeal),  126  App.  Div.  257,  110 

Supp.  629  285 

Von  Post,  35  Misc.  367,  71  Supp.  1039 451 

Voorhees,  165  Supp.  537 532 

W 

Wadd  v.  Hazelton,  137  N.  Y.  215,  33  N.  E.  143 69 

Wadheim  v.  Hancock,  8  Misc.  506,  28  Supp.  766 122 

Wall,  105  App.  Div.  643,  94  Supp.  1166 245 

Wallace,  71  App.  Div.  2S4,  75  Supp.  838 382 

Wallace,  149  Supp.  354 282 

Wallace,  28  Misc.  603,  59  Supp.  1084 447 

Walworth,  66  App.  Div.  171,  72  Supp.  984 Ill 

Warden,  94  Misc.  563,  157  Supp.  1111 118 

Warner  v.  Fourth  National  Bank,  115  N.  Y.  251,  22  N.  E.  172. ...  252 
Warren,  62  Misc.  444,  116  Supp.  1034 116 


xlvi  INHERITANCE  TAXATION 

[References  are  to  pages] 

Washburn  on  Real  Estate,  8th  ed.,  Vol.  I,  p.  529 123 

Watson,  171  N.  Y.  256,  63  N.  E.  1109 167 

Weatherbee,  157  Supp.   652 274 

Weatherbee,  N.  Y.  L.  J.,  November  5,  1913 282 

Webber,  151  App.  Div.  539,  136  Supp.  83 32,    87 

Weed,  10  Misc.  628,  32  Supp.  777 458 

Weeks  v.  Kraft,  147  App.  Div.  403,  132  Supp.  228 378,  380 

Weiler,  122  Supp.  608;  aff.  139  App.  Div.  905,  124  Supp.  1133 118 

Wendel,  95  Misc.  406,  160  Supp.  822 209 

West  v.  McCullough,  123  App.  Div.  846,  108  Supp.  493 132 

Weston  v.  Goodrich,  86  Hun  194,  33  Supp.  382 411 

Westurn,  152  N.  Y.  93,  46  N.  E.  315 262,  300,  303,  314,  367,  397 

421,  427 

Wethrow  v.  Lord,  41  App.  Div.  413,  58  Supp.  778 132 

Wheeler,  1  Misc.  450,  22  Supp.  1075 161 

Wheeler,  115  App.  Div.  616,  100  Supp.  1044 163 

Wheelright  v.  Rhodes,  28  Hun  57 307 

White,  116  App.  Div.  183 , 391 

White,  118  App.  Div.  169,  103  Supp.  688 167,  168,  175 

White,  208  N.  Y.  64,  101  N.  E.  793 8,  23,  199 

Whitewright,  87  Misc.  34,  89  Misc.  97,  151  Supp.  241 380,  385 

Whiting,  150  N.  Y.  27,  44  K  E.  715 240 

Whiting,  69  Misc.  526,  127  Supp.  960;  aff.  200  N.  Y.  520 392 

Wilcox,  118  Supp.  254 179,  448 

Wilkens,  144  App.  Div.  803,  129  Supp.  600 132 

Williams,  31  App.  Div.  617,  52  Supp.  710 311 

Williams,  N.  Y.  L.  J.,  October  2,  1914 306 

Williams  v.  Guile,  117  U.  Y.  343,  22  N.  E.  1071 77 

Williams  v.  Whedon,  109  N.  Y.  333,  16  N.  E.  365 279,  312 

Willets,  119  App.  Div.  119, 100  Supp.  850,  104  Supp.  1150;  aff.  190 

N.  Y.  527,  83  N.  E.  1134 265,  445 

Willmer,  75  Misc.  62,  134  Supp.  686;  aff.  153  App.  Div.  804,  138 

Supp.   649    251,  273 

Winters,  21  Misc.  552,  48  Supp.  1097 383 

Winthrop,  164  App.  Div.  898,  148  Supp.  1151;  aff.  214  N.  Y.  712. .  165 
Wise,  84  Misc.  663,  146  Supp*  789;  rev.  165  App.  Div.  420,  150 

Supp.  782  t 153 

Wolcott,  94  Misc.  73,  157  Supp.  268 238 

Wolfe,  137  N.  Y.  205,  33  N.  E.  156 383,  398,  419 

Wolfe,  23  Misc.  439,  52  Supp.  415 172 

Wolfe,  89  App.  Div.  349,  85  Supp.  949;  aff.  179  N.  Y.  599,  72  N.  E. 

H52 24,  51,  179 

Wood,  91  App.  Div.  3,  86  Supp.  269 455 

Wood,  68  Misc.  267,  123   Supp.  574 .177 


TABLE  OF  CASES  CITED  xlvii 

[References  are  to  pages] 

Wood,  40  Misc.  155,  81  Supp.  511 297 

Woolsey,  N.  Y.  L.  J.,  June  5,  1915 174 

Woolsey,  19  Abb.  N.  C.  232 164 

Wormser,  51  App.  Div.  441,  64  Supp.  897 281,  420,  454 

Wormser,  36  Misc.  434,  73  Supp.  748 299 

Wright,  89  Misc.  108,  151  Supp.  378 442 

Wright,  214  N.  Y.  714,  108  N.  E.  1112 27,  203,  248 

Wunsch,  N.  Y.  L.  J.,  January  24,  1913 412 

Y 

Yerkes,  N.  Y.  L.  J.,  December  5,  1912 311 

Young  v.  Blake,  163  App.  Div.  501,  148  Supp.  557 122 

Z 

Zborowski,  84  Misc.  342,  145  Supp.  1101;  rev.  213  N.  Y.  109. .  .201,  418 

Zefita,  167  N.  Y.  280,  60  N.  E.  598 182,  260 

Ziegler,  168  App.  Div.  735,  154  Supp.  652;  aff.  218  N.  Y.  544 308 

Zitlsperger,  170  App.  Div.  615,  156  Supp.  571 205 

Zortlein  v.  Bram  et  al.,  100  N.  Y.  12,  2  N.  E.  388 128 


ARKANSAS 

Clarkson,  188  S.  W.  834 247 

McDaniel  v.  Byrkett,  120  Ark.  295,  179  S.  W.  491 118 

McDaniel  v.  Hearn,  120  Ark.  288,  179  SW  337 165 

State  v.  Handline,  100  Ark.  175,  139  S.  W.  1112 4 

State  ex  rel.  McDaniel  v.  Gugan,  124  Ark.  584,  187  S.  W.  918 116 

CALIFORNIA 

Abstract  and  Title  Guarantee  Co.  v.  State,  161  Pac.  264 78 

Becker  v.  Nye,  8  Cal.  Dec.  129 456 

Bull,  153  Cal.  715,  96  Pac.  366 34 

Chesney,  1  Cal.  App.  30,  81  Pac.  679 301 

Cross  v.  Superior  Court,  2  Cal.  App.  342,  83  Pac.  815 457 

Damon,  10  Cal.  App.  542,  102  Pac.  684 34 

Fair,  128  Cal.  607,  61  Pac.  184 242,  246 

Haskins,  149  Pac.  576 383 

Hancock  v.  Ross,  50  Cal.  Dec.  304 390 

Hite,  159  Cal.  392,  113  Pac.  1072 31 

Hodges,  50  Cal.  Dec.  15. 17 

Johnson,  139  Cal.  532,  73  Pac.  424 40 

Kennedy,  157  Cal.  517,  108  Pae.  280 25,  121 


xlviii  INHERITANCE  TAXATION 

[References  are  to  pages] 

Lander,  6  Cal.  App.  744,  93  Pac.  202 27,  407 

Mahoney,  133  Cal.  180,  65  Pac.  389 40 

McCahill,  171  Cal.  482,  153  Pac.  930 242,  246,  407 

McDongald  v.  Boyd,  172  Cal.  753,  159  Pac.  168 109,  136 

McDongald  v.  Low,  164  Cal.  107,  127  Pac.  1027 247,  313 

Moffitt,  153  Cal.  359,  95  Pac.  653,  1025 143 

Reynolds,  169  Cal.  600,  147  Pac.  268 76,  79,  107,  466 

Rossi,  49  Cal.  Dec.  60 53 

Spreckles,  30  Cal.  App.  363,  158  Pac.  549 76,    80 

Stanford,  126  Cal.  112,  54  Pac.  259,  58  Pac.  462 23,  27,  172 

Trippet  v.  State,  149  Cal.  521,  86  Pac.  1084 27,  383 

Williams,  23  Cal.  App.  285,  137  Pac.  1067 304 

Wilmerding,  117  Cal.  281,  49  Pac.  181 4 

Winchester,  140  Cal.  468,  74  Pac.  10 163 

Woodard,  153  Cal.  39,  94  Pac.  242 25 

COLORADO 

Brown  v.  Elder,  32  Colo.  527,  77  Pac.  853 4 

County  Court  v.  Watson,  51  Colo.  405,  118  Pac.  974 379 

Magnes,  32  Colo.  527,  77  Pac.  853 11 

Macky,  45  Colo.  316,  101  Pac.  334 11 

People  v.  Rice,  40  Colo.  508,  91  Pac.  33 54 

Re  Inheritance  Tax,  23  Colo.  492,  48  Pac.  535 11 

CONNECTICUT 

Bishop  v.  Bishop,  81  Ccnn.  509,  71  A.  583 189 

Gallup,  76  Conn.  617,  57  A.  699 236,  459 

Hopkins,  77  Conn.  644,  60  A.  657 4, 17,  356,  459 

Nettleton,  76  Conn.  235,  56  A.  565 11 

Robertson  v.  Wilcox,  36  Conn.  426 254 

Sherman  v.  Moore,  89  Conn.  190,  93  A.  241 18< 

GEORGIA 

Martin  v.  Pollock,  87  S.  E.  793 383 

IDAHO 

Kohny  v.  Dunbar,  121  Pac.  544 144 

State  v.  Dunlap,  28  Idaho  784,  156  Pac.  1141 249 

ILLINOIS 

Adams  v.  Akelund,  168  111.  632,  48  N.  E.  544 41 

Ayres  v.  Chicago  Title  and  Trust  Co.,  187  111.  42,  58  N.  E.  318 203 

Benton,  234  111.  366,  84  N.  E.  1026 77 


TABLE  OF  CASES  CITED  xlix 

[References  are  to  pages] 

Billings  v.  People,  189  111.  472,  59  N.  E.  798 121 

Connell  v.  Crosby,  210  I1L  380,  71  N.  E.  350. ..  .27,  45,  178,  237,  302,  452 

Davis  v.  Upson,  230  111.  327,  82  N.  E.  824 148 

Graves,  242.  111.  212,  89  N.  E.  978 51,  174 

Hanberg  v.  Morgan,  263  111.  616,  105  N.  E.  720 262,  384,  458 

Kochersperger  v.  Drake,  167  111.  122,  47  N.  E.  321 4 

Lorenz  v.  Weller,  267  111.  230,  108  N.  E.  306 549 

Merrifield  v.  People,  212  111.  400,  72  N.  E.  446 76 

National  S.  D.  Co.  v.  Stead,  250  111.  584,  95  N.  E.  973 25,  352 

North  Trust  Co.  v.  Buck,  263  111.  222,  104  N.  E.  1114 15 

People  v.  Bauder,  271  111.  446,  111  N.  E.  598 45 

People  v.  Burkhalter,  247  111.  600,  93  N.  E.  379 79 

People  v.  Carpenter,  264  111.  400,  106  N.  E.  302 38,    86 

People  v.  Field,  248  111.  147 121 

People  v.  Forsyth,  273  111.  141,  112  N.  E.  378 121 

People  v.  Freese,  267  111.  164,  107  N.  E.  857 192 

People  v.  Griffith,  245  111.  532,  92  N.  E.  313 33,  61,  159,  246,  248 

People  v.  Kellogg,  268  111.  489,  109  N.  E.  304 172,  236,  319,  386 

People  v.  Kelly,  218  111.  509,  75  N.  E.  1038 76,    86 

People  v.  Lefens,  269  111.  472,  109  N.  E.  965 392 

People  v.  Moir,  207*  111.  180,  69  N.  E.  905 149,  150 

People  v.  Northern  Trust  Co.,  266  111.  139,  107  N.  E.  190 437 

People  v.  Orendorf,  262  111.  246,  104  N.  E.  656 96 

People  v.  Richardson,  269  111.  275,  109  N.  E.  1033 141 

People  v.  Schaefer,  266  111.  334,  107  N.  E.  617 180 

People  v.  Sholem,  244  111.  502,  91  N.  E.  704 262,  356 

People  v.  Starring,  274  111.  289,  113  N.  T.  627 204,  418 

Provident  Hospital  v.  People,  198  111.  495,  64  N.  E.  1031 36 

Rosenthal  v.  People,  211  111.  306,  71  N.  E.  1121 78 

Ullmann,  263  111.  528,  105  N.  E.  292 33 

Walker  v.  People,  192  111.  106,  61  N.  E.  489 269 

IOWA 

Brown  v.  Daly,  172  la.  379,  154  N.  W.  602 42,  699 

Culver,  145  la.  1,  123  N.  W.  743 249 

Ferry  v.  Campbell,  110  la.  290,  81  N.  W.  604 32,  36,  37,  383 

Gilbertson  v.  Ballard,  125  la.  420, 101  N.  W.  108 36 

Gilbertson  v.  Oliver,  129  la.  568,  105  N.  W.  1002 242 

Harriot  v.  Bacon,  110  la.  342,  81  N.  W.  701 538 

Lacy  v.  State  Treasurer,  152  la.  477,  132  N.  W.  843 36 

Lamb  v.  Morrow,  140  la.  89,  117  N.  W.  1118 85,    87 

McGhee  v.  State,  105  la.  9,  74  N.  W.  695 5,  263 

McKeown  v.  Brown,  167  la.  489,  149  N.  W.  593 41 

Morrow  v.  Durant,  140  la.  437, 118  N.  W.  781 300 


1  USTHEEITAJSCE    TAXATION 

[References  are  to  pages] 

Morrow  v.  Smith,  145  la.  514,  124  N.  W.  316 174 

Spangler,  148  la.  333,  127  N.  W.  625 173 

Stone,  132  la.  136,  109  N.  W.  455 356 

Weaver  v.  State,  110  la.  328,  81  N.  W.  603 241 

Wells,  142  la.  255,  120  N.  W.  713 52 

Wieting  v.  Morrow,  151  la.  590,  132  N.  W.  193 11 

KANSAS 

Nelson  v.  Schoonhover,  89  Kan.  779, 132  Pac.  1183 48 

State  v.  Davis,  88  Kan.  849,  129  Pac.  1197 18 

State  v.  Mollier,  96  Kan.  514, 152  Pac.  771 55,  298 

KENTUCKY 

Barrett  v.  Continental  Realty  Co.,  130  Ky.  109, 114  S.  W.  750 408 

Booth  v.  Commonwealth,  130  Ky.  88, 113  S.  W.  61 5 

Commonwealth  v.  McCauley's  Executor,  166  Ky.  450,  179  S.  W. 

411 26,    32 

Commonwealth  v.  Peebles,  134  Ky.  121,  119  S.  W.  774 17,  159 

Commonwealth  v.  Stoll,  132  Ky.  234, 114  S.  W.  279, 116  S.  W.  687. .  116 

Ewald's  Executor  v.  City  of  Louisville,  189  S.  W.  458 247 

Leavell  v.  Arnold,  131  Ky.  426, 115  S.  W.  232 11,  166 

Mandel  v.  Fidelity  Trust  Co.,  128  Ky.  239, 107  S.  W.  775 176,  178 

Winn  v.  Schenek,  33  Ky.  L,  Rep.  615,  110  S.  W.  827 110 

LOUISIANA 

Kohn,  115  La.  71,  38  So.  898 5 

Frigalo,  123  La.  71,  48  So.  652 29 

Marsal,  118  La.  212,  42  So.  778 144 

Pargoud,  13  La.  Ann.  367 461 

Schaffer,  13  La.  Ann.  113 42 

Westfeld,  122  La.  836,  48  S.  281 236 

MAINE 

Lombard,  88  Me.  587,  34  A.  530 36 

Lnques,  114  Me.  235,  95  A.  1021 116 

State  v.  Hamlin,  86  Me.  495,  30  A.  76. 5 

MAEYLAND 

Citizen's  Bank  v.  Sharp,  53  Md.  521 258 

Fisher  v.  State,  106  Md.  104,  66  A.  661 110 

Gallard  v.  Winans,  111  Md.  434,  74  A.  626 Ill 

Helser  v.  State,  128  Md.  228,  97  A.  539 244 

Montague  v.  State,  27  Md.  481 461 


TABLE  OF  CASES  CITED  li 

[References  are  to  pages] 

Owings  v.  State,  22  Md.  116 24 

State  v.  Dalrymple,  70  Md.  294,  17  A.  82 5,    18 

Tyson  v.  State,  28  Md.  577 11 

Wingert  v.  State,  125  Md.  536,  94  A.  166 379 

MASSACHUSETTS 

Atty.-Gen.  v.  Barney,  211  Mass.  134,  97  N.  E.  750 38 

Atty.-Gen.  v.  Clark,  222  Mass.  291,  110  N.  E.  299 136 

Atty.-Gen.  v.  Rafferty,  209  Mass.  321,  95  N.  E.  747 406 

Atty.-Gen.  v.  Roche,  219  Mass.  601,  107  N.  E.  667 385 

Atty.-Gen.  v.  Skehill,  217  Mass.  364,  104  N.  E.  748 458 

Atty.-Gen.  v.  Stone,  209  Mass.  186,  95  N.  E.  395 406 

Batt  v.  Treasurer,  209  Mass.  459,  95  N.  E.  854 52,  175 

Bliss  v.  Bliss,  221  Mass.  201,  109  N.  E.  148 42 

Bradford  v.  Storey,  189  Mass,  104,  75  N.  E.  256 452 

Burnham  v.  Treasurer,  212  Mass.  165,  98  N.  E.  603 114,  522 

Callahan  v.  Woodridge,  171  Mass.  595 320 

Clark  v.  Treasurer,  218  Mass.  292,  105  N.  E.  1055 117 

Crocker  v.  Shaw,  174  Mass.  266,  54  N.  E.  549 91 

Gushing  v.  Aylwin,  12  Mete.  169 91 

Custance  v.  Bradshaw,  4  Hare  315 238 

Emmons  v.  Shaw,  171  Mass.  410,  50  N.  E.  1033 110 

Essex  v.  Brooks,  164  Mass.  79,  41  N.  E.  119 174 

First  Universalist  Society  v.  Bradford,  185  Mass.  310,  70  N.  E.  204.  173 

Flagg  v.  Bradford,  181  Mass.  315 451 

Frothingham  v.  Shaw,  175  Mass.  59,  55  N.  E.  623 16 

Greves  v.  Shaw,  173  Mass.  205,  53  N.  E.  372 17,  239,  248,  320 

Hooper  v.  Bradford,  178  Mass.  95,  59  N.  E.  678 238,  320,  356 

Hooper  v.  Shaw,  176  Mass.  190,  57  N.  E.  361 303 

Howe  v.  Howe,  179  Mass.  546,  61  N.  E.  225 198,  238 

Hutchins  v.  State  Bank,  12  Mete.  421 16 

Kingsbury  v.  Chapin,  196  Mass.  533,  82  N.  E.  700 21,  238,  251,  320 

Kinney  v.  Stevens,  207  Mass.  368,  93  N.  E.  586 243 

Little  v.  Newburyport,  210  Mass.  414,  96  N.  E.  1032 174 

Loring  v.  Gardner,  221  Mass.  571,  109  N.  E.  635 184 

McCurdy  v.  McCurdy,  197  Mass.  248,  83  N.  E.  881 45,  178,  237,  243 

Martin  v.  Gage,  147  Mass.  204,  17  N.  E.  310 16 

Minot  v.  Treasurer,  207  Mass.  588,  93  N.  E.  973 113,  522 

Minot  v.  Winthrop,  162  Mass.  113,  38  N.  E.  512 6,  90,  190 

Nashua  Savings  Bank  v.  Abbott,  181  Mass.  531,  63  N.  E.  1058 260 

New  England  Trust  Co.  v.  Abbott,  205  Mass.  279,  91  N.  E.  379.  .85,    91 

Palmer  v.  Treasurer,  222  Mass.  263,  110  N.  E.  283 123 

Peabody  v.  Treasurer,  215  Mass.  129,  102  N.  E.  435 239 

Pierce  v.  Stevens,  205  Mass.  219,  91  N.  E.  319 .* 175 


Hi  INHERITANCE  TAXATION 

[References  are  to  pages] 

Rice  v.  Bradford,  180  Mass.  545,  63  N.  E.  7 175 

Smith  v.  Sherman,  4  Gush.  408 16 

State  St.  Trust  Co.  v.  Treasurer,  209  Mass.  373,  95  N.  E.  851 109 

Stevens  v.  Bradford,  185  Mass.  439,  70  N.  E.  425 34 

Tyler  v.  Treasurer,  115  1ST.  E.  300 97 

Walker  v.  Treasurer,  221  Mass.  600,  109  N.  E.  647 117 

Welch  v.  Treasurer,  217  Mass.  348,  104  N.  E.  726 89 

MICHIGAN 

Cbambee  v.  Durfee,  100  Mich.  112,  58  N.  W.  661 11 

Fox,  154  Mich.  5,  171  N.  W.  558 11 

Merriam,  147  Mich.  630,  111  N.  W.  196 244 

Miller  v.  McLaughlin,  141  Mich.  425, 104  N.  W.  777 27,  33,    38 

Port  Huron  v.  Wright,  150  Mich.  279,  114  N.  W.  76 279 

Rogers,  149  Mich.  305, 112  N.  W.  931 244,  256 

Stanton,  142  Mich.  491,  105  N.  W.  1122 19,  238 

Stelwagen  v.  Durfee,  130  Mich.  166,  89  N.  W.  728 538 

Union  Trust  Co.  v.  Probate  Judge,  125  Mich.  487,  84  N.  W.  1101.  ,7,    34 

37,  409 
Weller  v.  Wheelock,  155  Mich.  698,  118  N.  W.  609 176 

MINNESOTA 

Drew  v.  Tift,  79  Minn.  175,  81  N.  W.  839 11 

Basting  v.  Probate  Court,  101  Minn.  485, 112  N.  W.  878 201,  212 

Basting  v.  Probate  Court,  132  Minn.  104,  155  N.  W.  1077.  .200,  201,  212 

Graff  v.  Probate  Court,  128  Minn.  371,  150  N.  W.  1094 42,  244,  256 

Hale  v.  Probate  Court,  100  Minn.  192,  110  N.  W.  865 201 

Tozer  v.  Probate  Court,  102  Minn.  268,  113  N.  W.  888 26,    32 

State  v.  Bazille,  97  Minn.  11,  106  N.  W.  93 7 

State  v.  Probate  Court,  112  Minn.  279,  128  N.  W.  18 301,  308 

State  v.  Probate  Court,  124  Minn.  508,  145  N.  W.  390 118 

MISSOURI 

State  v.  Switzler,  143  Mo.  287,  45  S.  W.  245 7,    14 

Wilhelmi  v.  Wade,  65  Mo.  39 176,  461 

MONTANA 

Blackburn,  51  Mont.  234,  152  Pac.  31 121 

Gelsthorpe  v.  Furnell,  20  Mont.  299,  51  Pac.  267. 7,    32 

Hinds  v.  Wilcox,  22  Mont.  4,  55  Pac.  355 235 

State  v.  District  Court,  41  Mont.  357,  109  Pac.  438 28,  379,  384 

Tuohy,  35  Mont.  431,  90  Pac.  170 15,  31,  729 


TABLE  OF  CASES  CITED  liii 

[References  are  to  pages] 
NEBRASKA 

Bodge  County  v.  Burns,  131  N.  W.  932 239 

Douglas  County  v.  Kountze,  84  Neb.  506,  121  N.  W.  593 72,  85,  248 

Sandford,  90  Neb.  410,  133  N.  W.  870 52 

Sandford,  91  Neb.  752,  137  N.  W.  864 118 

State  v.  Lancaster,  4  Neb.  537 11 

State  v.  Vinsonhaler,  94  Neb.  675,  144  N.  W.  248 8 

Strahan,  93  Neb.  828, 142  N.  W.  678 121 

NEVADA 

Williams,  161  Pac.  741 144 

NEW  HAMPSHIRE 

Carter  v.  Craig,  77  N.  H.  200,  90  A.  598 55 

Carter  v.  Eaton,  75  N.  H.  560,  78  A.  643 173 

Carter  v.  Whitcomb,  74  N.  H.  482,  69  A.  779 175 

Curry  v.  Spencer,  61  N.  H.  624 11 

Gardner  v.  Carter,  74  N.  H.  507,  69  A.  939 251 

Kingsbury  v.  Bazeley,  75  N.  H.  13,  70  A.  916 185 

Mann  v.  Carter,  74  N.  H.  345,  68  A.  130 8,  19,  38,  256 

Thompson  v.  Kidder,  74  N.  H.  89,  65  A.  392 11 

NEW  JERSEY 

Alfred  University  v.  Hancock,  69  N.  J.  Eq.  470,  46  A.  178 174 

Astor  v.  State,  25  N.  J.  Eq.  303,  72  A.  78 441 

Carr  v.  Edwards,  84  N.  J.  L.  667,  87  A.  132 18 

Dixon  v.  Russell,  78  N.  J.  L.  296,  73  A.  51 247 

Eastwood  v.  Russell,  81  N.  J.  L.  672,  81  A.  108 30 

Gopsill,  77  N.  J.  Eq.  215,  77  A.  793 34 

Hartmann,  70  N.  J.  Eq.  664,  62  A.  560 8,  20,  31 

Herbert  v.  Mechanics  B.  &  L.  Assn.,  14  N.  J.  Eq.  497 253 

Hoyt  v.  Hancock,  65  N.  J.  Eq.  688,  55  A.  1004 110 

Kip  v.  Kip,  33  N.  J.  Eq.  213 128 

McCrea  v.  Yule,  68  N.  J.  L.  465,  53  A.  210 253 

Mechanic's  B.  &  L.  v.  Conover,  14  N.  J.  Eq.  219;  rev.  17  N.  J.  Eq. 

497 253 

Meisel  v.  Merchants  Ntl.  Bk.,  85  N.  J.  L.  253,  88  A.  1067 253 

Neilson  v.  Russell,  76  N.  J.  L.  655,  71  A.  286 38 

Rothschild,  71  N.  J.  Eq.  210,  63  A.  615;  aff.  72  N.  J.  Eq.  425,  65  A. 

1118 55 

Sawter  v.  Schoenthal,  83  N.  J.  L.  499,  83  A.  1004 30 

Security  Trust  Co.  as  Exr.  of  Morse  v.  Edwards,  N.  J.  Ct.  of  Errors 

June  18, 1917 251 


liv  INHERITANCE  TAXATION 

[References  are  to  pages] 

Security  Trust  Co.  v.  Edwards,  N.  J.  Ct.  of  Errors  June  18, 1917. . .  205 

Senff  v.  Edwards,  85  N.  J.  L.  67,  88  A.  1026 205 

State  v.  1ST.  Y.  Meeting  of  Friends,  61  N.  J.  Eq.  620,  48  A.  227 34 

Stengel  v.  Edwards,  98  A.  424 204 

Tilford  v.  Dickinson,  79  N.  J.  L.  302,  75  A.  574 36 

NORTH  CAROLINA 

Atty.-Gen.  v.  Pierce,  59  N.  C.  240 236 

Baugham,  90  S.  E.  203 204 

Gout  v.  Zimmerman,  5  N.  C.  440 154 

Hunter  v.  Husted,  45  N.  C.  141 458 

Kramer  v.  Old,  119  N.  C.  1,  25  S.  E.  813 283 

Morris,  138  N.  C.  259,  50  S.  E.  682 8,  45,  356 

Pullen  v.  Commissioners,  66  N.  C.  361 11 

State  v.  Brevard,  62  N.  C.  141 460 

State  v.  Brim,  57  N.  C.  300 158,  460 

State  v.  Scales,  90  S.  E.  439 33 

NORTH  DAKOTA 

Strauss  v.  Costello,  29  N.  Dak.  215, 150  N.  W.  874 457 

OHIO 

Chamberlain  v.  Stecher,  78  Ohio  St.  271,  85  N.  E.  526 459 

Eury  v.  State,  72  Ohio  St.  448,  74  N.  E.  650 33 

Friend  v.  Levy,  76  Ohio  St.  26,  80  N.  E.  1036 34 

Haggerty  v.  State,  55  Ohio  St.  613,  45  N.  E.  1046 93 

Hostetter  v.  State,  26  Ohio  Circuit  702 37,  383 

Humphreys  v.  State,  70  Ohio  St.  67,  70  N.  E.  957 11 

Speers,  4  Ohio  N.  P.  238 256 

State  v.  Ferris,  53  Ohio  St.  314,  41  N.  E.  579 8,  13,  14 

OKLAHOMA 

Pitman  v.  State,  158  Pac.  1137 454 

PENNSYLVANIA 

Bittinger,  129  Pa.  St.  338, 18  A.  132 159 

Clapper  v.  Frederick,  199  Pa.  St.  609,  49  A.  218 69 

Commonwealth  v.  Smith,  20  Pa.  St.  100 236 

Cope,  191  Pa.  St.  1,  43  A.  79 9,  11,  13 

Dalrymple,  215  Pa.  St.  367,  64  A.  54 237 

Finnen,  196  Pa.  St.  72,  46  A.  269 31,  183 

Handley,  181  Pa.  St.  339,  37  A.  587 237,  437 

Hawley,  214  Pa.  St.  525,  63  A.  1021 54 


TABLE  OF  CASES  CITED  Iv 

[References  are  to  pages] 

Howell,  147  Pa.  St.  164,  23  A.  403 538 

Lea,  194  Pa.  St.  524,  45  A.  337 179 

Lewis,  203  Pa.  St.  211,  52  A.  205 19 

Line,  155  Pa.  St.  378,  26  A.  728 32,  85,  91,  92,  302 

McDowell  v.  Addtoms,  51  Pa.  St  438 35 

McKeen  v.  Northampton  County,  49  Pa.  St.  519 19. 

Marr,  240  Pa.  St.  38,  87  A.  621 236* 

Mellon,  114  Pa.  St.  564,  8  A.  183 178 

Miller  v.  Commonwealth,  111  Pa.  St.  321,  2  A.  492 : 237 

Milliken,  206  Pa.  St.  149,  55  A.  853 182,  261 

Nieman,  131  Pa.  St.  346,  18  A.  90 192 

Orcutt,  97  Pa.  St.  179 242 

Packer,  246  Pa.  St.  133,  92  A.  75 35 

Pepper,  159  Pa.  St.  508,  28  A.  353 54 

Reisch  v.  Commonwealth,  106  Pa.  St.  521 85 

Seibert,  110  Pa.  St.  324, 1  A.  346 85 

Small,  151  Pa.  St.  1,  25  A.  23 261 

Stuckey  v.  Keek's  Exrs.,  26  Pa.  St.  397 129 

Thomson,  12  Phila.  36 461 

Vanuxem,  212  Pa.  St.  315,  61  A.  876 237 

Waugh,  78  Pa.  St.  436 105 

Williamson,  153  Pa.  St.  508,  26  A.  246 237 

SOUTH  DAKOTA 

McKennan,  25  S.  Dak.  369,  126  N.  W.  611 9,  15 

TENNESSEE 

Bailey  v.  Drane,  96  Tenn.  16,  33  S.  W.  573 28,  29 

Crenshaw  v.  Moore,  124  Tenn.  528,  137  S.  W.  924 121 

English  v.  Crenshaw,  120  Tenn.  531, 110  S.  W.  210 52 

Harrison  v.  Johnston,  109  Tenn.  245,  70  S.  W.  414 188 

Knox  v.  Emerson,  123  Tenn.  409,  131  S.  W.  972 33 

McLemore  v.  Raines,  131  Tenn.  637,  176  S.  W.  109 201 

Memphis  Trust  Co.  v.  Speed,  114  Tenn.  677,  88  S.  W.  321.  .313,  315,  318 

Shelton  v.  Campbell,  109  Tenn.  690,  72  S.  W.  112 453 

State  v.  Alston,  94  Tenn.  674,  30  S.  W.  750 9 

Zickler  v.  Union  Bank  and  Trust  Co.,  104  Tenn.  277,  57  S.  W.  341. .  29 

UTAH 

Bullen,  151  Pac.  533 9 

Dixon  v.  Rickerts,  26  Utah  215,  72  Pac.  947 538 


Ivi  INHERITANCE  TAXATION 

[References  are  to  pages] 

VERMONT 

Curtis,  88  Vt.  445,  92  A.  965 35 

Hickok,  78  Vt.  259,  62  A.  724 34 

Howard,  80  Vt.  489,  68  A.  513 28,  34 

Joslyn,  76  Vt.  88,  56  A.  281 10,  11 

VIRGINIA 

Commonwealth  v.  Wellford,  114  Va.  372,  76  S.  E.  917 25 

Eyre  v.  Jacob,  14  Gratt.  422 10 

Fox  v.  Commonwealth,  16  Gratt.  1 29 

Miller  v.  Commonwealth,  27  Gratt.  110 166 

Schoolfield  v.  Lynchburg,  78  Va.  366 11 

WASHINGTON 

Clark,  37  Wash.  671,  80  Pac.  267 11,    39 

Lotzgesell,  62  Wash.  352,  113  Pac.  1105 461 

State  v.  Clark,  30  Wash.  439,  71  Pac.  20 11 

Stixrud,  58  Wash.  339,  109  Pac.  343 41 

White  v.  Tax  Commissioners,  42  Wash.  360,  84  Pac.  831 10 

WISCONSIN 

Beals  v.  State,  139  Wis.  544,  121  N.  W.  347 10 

Black  v.  State,  113  Wis.  205,  89  N.  W.  522 38 

Dessert,  142  N.  W.  647 80 

Kempsmith,  161  Wis.  389, 154  N.  W.  695 786 

Larsen  v.  Johnson,  78  Wis.  300,  47  N.  W.  615 195 

Montague  v.  State,  163  Wis.  58,  157  N.  W.  508 114 

Nunnemacher  v.  State,  129  Wis.  190,  108  N.  W.  627 409 

Smith  v.  State,  161  Wis.  588,  155  N.  W.  509 121,  786 

State  v.  Bullen,  143  Wis.  512, 128  N.  W.  109;  aff.  240  U.  S.  625.  .72,  85 

91,  356 

State  v.  Carpenter,  129  Wis.  180,  108  N.  W.  641 392 

State  v.  Pabst,  139  Wis.  561,  121  N.  W.  351 76,  78,  273,  453 

State  v.  Thompson,  154  Wis.  320,  142  N.  W.  647 76,  80 

State  v.  Widule,  161  Wis.  389,  154  N.  W.  695 198 

UNITED  STATES 

Ayer  &  Lord  Co.  v.  Kentucky,  202  U.  S.  409,  26  S.  Ct.  Rep.  679. ...  241 

Baltzer  v.  North  Carolina,  161  U.  S.  240 451 

Beers  v.  Arkansas,  20  How.  527 451 

Beers  v.  Glynn,  211  U.  S.  477 323 

Blackstone  v.  Miller,  188  U.  S.  189,  23  S.  Ct.  Rep..  277 19,    21 

61, 148,  257 


TABLE  OF  CASES  CITED  .      Ivii 

[References  are  to  pages] 

Blair  v.  Herold,  150  Fed.  199 ;  aff.  158  Fed.  804 93 

Board  of  Education  v.  Illinois,  203  U.  S.  553,  27  S.  Ct.  Rep.  171 35 

Brown  v.  Kinney,  137  Fed.  1018 486 

Brune  v.  Smith,  Fed.  Gas.  2053 1088 

Bullen  v.  Wisconsin,  240  U.  S.  625,  36  S.  Ct.  Eep.  473 15,    85 

Cahen  v.  Brewster,  203  U.  S.  543,  27  S.  Ct.  Rep.  174 32 

Campbell  v.  California,  200  U.  S.  87,  26  S.  Ct.  Rep.  182 29 

Chanler  v.  Kelsey,  205  U.  S.  466,  27  S.  Ct.  Rep.  550 Ill,  113 

Clapp  v.  Mason,  94  U.  S.  589 29 

Dale  v.  Pattison,  234  U.  S.  399,  34  S.  Ct.  Rep.  785 253 

Eidman  v.  Martinez,  184  U.  S.  578,  22  S.  Ct.  Rep.  515 33 

Hamilton  v.  Rathbone,  175  U.  S.  414 235 

Hawley  v.  Maiden,  232  U.  S.  1,  34  S.  Ct.  Rep.  201 247. 

Heberton  v.  McClain,  135  Fed.  226 486 

Herold  v.  Shanley,  146  Fed.  20,  76  C.  C.  A.  478 203,  486 

Kahen  v.  Herold,  147  Fed.  575;  aff.  86  C.  C.  A.  598,  159  Fed.  608, 

163  Fed.  947 448 

Keeney  v.  New  York,  222  U.  S.  525,  32  S.  Ct.  Rep.  105 32 

Kintzing  v.  Hutchinson,  Fed.  Cas.  7834 258 

Knowlton  v.  Moore,  178  U.  S.  41,  20  S.  Ct.  Rep.  747 13,  14,  491 

Magoun  v.  Illinois  Trust  Co.,  170  U.  S.  283,  18  S.  Ct.  Rep.  594 U 

Mason  v.  Sargent,  104  U.  S.  689 29 

Moffitt  v.  Kelly,  218  U.  S.  400 113,  143 

National  S.  D.  Co.  v.  Stead,  232  U.  S.  58,  34  S.  Ct.  Rep.  209 352 

Norton  v.  Selby  County,  118  U.  S.  425,  6  S.  Ct.  Rep.  1121 445 

Orr  v.  Oilman,  183  U.  S.  278,  22  S.  Ct.  Rep.  213 26,  522 

Quid  v.  Washington  Hospital,  95  U.  S.  303 169 

Page  v.  Edmunds,  187  U.  S.  596,  23  S.  Ct.  Rep.  200 260 

Plummer  v.  Coler,  178  U.  S.  115,  20  S.  Ct.  Rep.  829 11,    14 

Prevost  v.  Greneaux,  19  How.  1 42 

Railroad  Co.  v.  Alabama,  101  U.  S.  832 452 

Railroad  Co.  v.  Tennessee,  101  U.  S.  337 452 

Ransom  v.  United  States,  70  Fed.  Cas.  11574 49 

Scholey  v.  Rew,  90  U.  S.  331,  23  Wall  331 177 

Scudder  v.  Comptroller,  175  U.  S.  32,  20  S.  Ct.  Rep.  26 443 

Sherman  v.  United  States,  178  U.  S.  150,  20  S.  Ct.  Rep.  779 448 

Smith  v.  Reeves,  178  U.  S.  436 451 

Snyder  v.  Bettman,  190  U.  S.  249,  23  S.  Ct.  Rep.  803 11 

Stickney  v.  Kelsey,  209  U.  S.  419,  28  S.  Ct.  Rep.  508 443 

Sturges  v.  United  States,  117  U.  S.  363,  6  S.  Ct.  Rep.  767 29 

Tilt  v.  Kelsey,  207  U.  S.  43,  28  S.  Ct.  Rep.  1 39,  40,  404,  406,  443 

U.  S.  v.  Hazard,  8  Fed.  380 29 

U.  S.  v.  Kelly,  27  Fed.  542 461 

U.  S.  v.  Kelly,  28  Fed.  845 29 


Iviii  INHERITANCE  TAXATION 

[References  are  to  pages} 

U.  S.  v.  N.  Y.  Ins.  &  Trust  Co.,  Fed.  Gas.  15873 29 

U.  S.  v.  Perkins,  163  U.  S.  625,  16  S.  Ct.  Rep.  1073 10,  143 

U.  S.  v.  Rankin,  8  Fed  872 29 

U.  S.  v.  Trucks,  27  Fed.  541 461 

U.  S.  v.  Tappan,  Fed.  Cas.  16431 461 

Vanderbilt  v.  Eidman,  196  U.  S.  480,  25  S.  Ct.  Rep.  331 486 

Wallace  v.  Myers,  38  Fed.  184 14 

Wheeler  v.  Sohmer,  233  U.  S.  434 243,  245 

Yazoo  and  Miss.  Ry.  Co.  v.  Adams,  180  U.  S.  1,  21  S.  Ct.  Rep.  240. .     35 

ENGLAND 

Austin  v.  Boys,  27  L.  J.  Ch.  714 283 

Blackstone's  Commentaries,  Lewis  Ed.,  Vol.  II,  p.  180 123 

Dalhousie  v.  M'Doual,  7  C.  &  F.  817 154 

Dalrymple  v.  Dalrymple,  2  Hogg  Con.  63 153 

Dufour  v.  Ferraro,  Hargrave's  Jurid.  Arg.  304 48 

Hyde  v.  Hyde,  1  P.  &  D.  130 154 

Lyte  et  Ux  v.  Peny,  Easter  Term,  23  Hen.  VIII 69 

Mellersch  v.  Keen,  28  Beav.  453 285,  288 

Page  v.  Ratliffe,  75  L.  T.  Rep.  371 284,  285,  288 

Warrender  v.  Warrender,  2  C.  &  F.  488 154 

Yelverton  v.  Yelverton,  1  Sw.  &  Tr.  574 154 


INHERITANCE  TAXATION 


PART  I  — THE  TAX 


A.  Not  a  Tax  on  the  Property  but  on  the  Privilege  of  Transmitting  and 

Inheriting  It. 

1.  Review  of  the  Authorities. 

2.  The  Privilege  Taxed. 

3.  Statutes  Held  Invalid. 

4.  Practical  Application  of  the  Rule. 

a.  Not  a  Direct  Tax  to  be  Apportioned  among  the  States. 

b.  Property  Otherwise  Exempt  Must  be  Included  and  Valued. 

c.  Construction  of  Contracts. 

d.  Personalty  of  Resident   Taxed  though   in   Foreign   Juris- 

diction. 

e.  Intangibles  of  Nonresident  within  the  State  Taxable. 

f.  Double  Taxation. 

B.  The  Transfer  Takes  Place  at  Death. 

1.  Vested  Right  of  the  State. 

2.  Renunciation  by  Legatee. 

3.  Law  in  Force  at  Date  of  Proceedings  Controls  Procedure. 

4.  Rights  Vested  Prior  to  Death  Cannot  be  Taxed. 

5.  Amendment  and  Repeal. 

6.  Gains  or  Losses  during  Administration. 

7.  Exceptions  to  the  Rule. 

a.  By  the  Nature  of  the  Transfer. 

b.  By  Statute. 

C.  General  Rules  of  Construction. 

1.  Strict  or  Liberal. 

2.  Exemptions. 

3.  Retroactive  or  Prospective. 

4.  Notice  and  a  Hearing  Essential. 

5.  Copied  or  Adopted  Statutes. 

6.  Practical  Construction. 

D.  Conflict  of  Laws. 

1.  Jurisdiction. 

2.  "Full  Faith  and  Credit." 

3.  Proof  of  Foreign  Laws. 

4.  As  to  Sister  States. 

5.  As  against  Aliens  Protected  by  Treaties. 

6.  Reciprocal  Provisions. 

[1]    . 


INHERITANCE  TAXATION 


PART  I  — THE  TAX 


Inheritance  taxation  has  come  to  be  a  distinct  depart- 
ment of  jurisprudence.  Although  it  is  necessarily  purely 
statutory  the  statutes  are  based  upon  fundamental 
doctrines  which  are  peculiar  to  this  subject. 

In  order  to  understand  it  scientifically  and  tread  the 
maze  of  statutes  and  decisions  with  a  clear  comprehension 
of  the  principles  from  which  they  spring  and  the  sub- 
stantial foundations  of  justice  upon  which  the  courts 
endeavor  to  rest  them  there  are  two  cardinal  doctrines 
that  should  be  thoroughly  grasped.  There  is  hardly  a 
litigation  in  all  the  thousands  of  controversies  that  have 
arisen  over  inheritance  taxation  that  does  not  involve 
one  or  both  of  them. 

They  are: 

(a)  That  the  tax  is  not  a  property  tax;  but  an 
excise  or  impost  upon  the  right  to  transmit  property 
at  death;  or  upon  the  right  to  succeed  to  it  from  the 
dead. 

(b)  That  the  tax  accrues  because  of  and  at  the 
death  of  the  owner;  that  the  rights  and  liabilities  of 
the  state  and  the  beneficiaries  date  from  that  event; 
and  that  the  value  of  the  property  transmitted  or 
received,  which  measures  the  value  of  the  inheritance, 
is  taken  at  that  date. 

A.—  NOT  A  TAX  ON  PROPERTY  BUT  ON  THE  RIGHT 
TO  RECEIVE  AND  INHERIT  IT. 

If  an  inheritance  tax  is  construed  as  a  tax  upon  the 
property  of  a  decedent,  such  a  tax  necessarily  violates 
the  universal  constitutional  requirements  that  taxation 


PABT  I  — THE  TAX  3 

shall  be  equal  in  its  burdens  and  uniform  in  its  appli- 
cation. 

No  just  property  tax  could  be  levied  that  was  unequal 
and  not  uniform. 

No  just  inheritance  tax  could  be  imposed  that  did  not 
make  exemptions  to  the  widow  and  the  orphan  or  that 
taxed  their  patrimony  equally  with  the  succession  of 
distant  relatives  and  strangers. 

An  annual  tax  levy  that  asseessed  Farmer  Jones,  on 
one  side  of  the  street,  at  2%,  and  Farmer  Robinson,  on 
the  other  side  of  the  street,  at  5%  of  the  value  of  their 
respective  farms  would  obviously  be  unjust,  tyrannical, 
oppressive  and  intolerable. 

But  if  Farmer  Jones  leaves  his  farm  to  his  widow  and 
his  son  and  Farmer  Robinson  devises  his  acres  to  cousins 
in  Norway,  a  tax  on  the  transfer  by  Jones  at  2%  and  on 
that  by  Robinson  at  5%  is  recognized  as  just  and 
equitable. 

Moreover,  it  is  generally  thought  that  a  fortunate 
youth  who  inherits  a  sum  sufficient  to  class  him  with  the 
"  idle  rich  "  should  pay  more,  proportionately,  for  the 
privilege  than  the  son  of  the  poor  man  who  merely  gets 
a  fair  start  in  life  as  the  result  of  his  father's  industry 
and  solicitude  and  his  mother's  life-long  sacrifices  and 
economies. 

While  these  considerations  are  applicable  to  the  tax- 
ation of  inheritances  they  are  fundamentally  obnoxious 
to  the  principles  of  ordinary  taxation  —  hence  the  vital 
importance  of  the  initial  proposition  that  such  taxes  are 
not  levied  upon  property,  but  upon  the  right  to  transmit 
and  inherit  it. 

1.  Review  of  Authorities. 

The  leading  cases  in  all  the  states  deal  with  the  problem 
and  arrive  at  a  nearly  unanimous  view ;  but  to  apply  it  as 
we  must  throughout  this  treatise  a  review  of  these 
authorities  is  necessary. 


4  INHERITANCE  TAXATION 

Arkansas. — "  Being  a  statute  taxing  privileges  and  not 
property  it  does  not  conflict  with  the  uniformity  provi- 
sions. It  but  divides  the  value  of  estates  passing  to  cer- 
tain classes  of  persons  into  certain  amounts,  a  reasonable 
classification  for  the  purpose  of  laying  or  levying  a  pro- 
gressive inheritance  tax." 

State  V.  Handline,  100  Ark.  175;  139  S.  W.  1112. 

California. — '  *  The  tax  thus  imposed  is  in  the  nature  of 
an  excise  tax  or  a  tax  upon  the  right  of  succession.  The 
right  of  inheritance  including  the  designation  of  heirs 
and  the  proportions  which  the  several  heirs  shall  receive 
as  well  as  the  right  of  testamentary  disposition  are 
entirely  matters  of  statutory  enactment  and  within  the 
control  of  the  legislature." 

Wilmerding's  Estate,  117  Cal.  281;  49  Pac.  181. 

Colorado. — "As  the  tax  is  not  on  property  but  on  the 
right  of  succession  the  state  may  tax  privileges,  dis- 
criminate between  relatives  and  grant  exemptions;  and 
it  is  not  precluded  from  this  power  by  the  provision  of 
the  respective  state  constitutions  regarding  uniformity  of 
taxation. ' ' 

Brown  v.  Elder,  32  Colo.  527;  77  Pac.  853. 

Connecticut. — "  Our  succession  tax  is  computed  with 
reference  to  the  whole  beneficial  value  of  the  succession 
which  passes  by  force  of  our  law." 

Hopkins'  Appeal,  77  Conn.  644,  653;  60  A.  657. 

Illinois. — The  broad  principle  presented  is  that  the 
legislature  may  create  new  classes  of  property  with  refer- 
ence to  estates  under  which  they  may  regulate  the  right 
to  inherit  or  devise  and  take  under  devise  and  such  right 
existing  such  classes  may  be  created  and  as  created  may 
be  uniform  and  the  assessment  by  valuation  when  declared 
to  operate  equally  on  the  right  of  succession  to  such 
classes  is  not  a  violation  of  the  constitution. 
Eochersperger  v.  Drake,  167  HI.  122;  47  N.  E.  321. 


PART  I  —  THE  TAX  5 

Iowa. — "  It  is  not  a  tax  upon  property  as  that  phrase 
is  ordinarily  understood;  but  a  tax  upon  the  succession, 
upon  the  privilege  of  succeeding  to  the  estate  of  the 
decedent. ' ' 

McGhee  v.  State,  105  la.  9 ;  74  N.  W.  695. 

Kentucky. — "As  the  privilege  or  right  to  take  property 
by  inheritance  or  devise  is  not  a  natural  or  inherent  right 
of  persons  but  is  a  creation  of  the  law,  it  is  subject  to 
regulation  by  statute  and  the  imposition  of  the  tax  as 
incident  to  the  right  is  authorized  under  our  governmental 
system  when  not  expressly  forbidden  by  the  constitution. ' ' 
Booth  v.  Commonwealth,  130  Ky.  88;  113  S.  W.  61. 

Louisiana. — "  It  is  not  a  tax  on  property  but  a  bonus  or 
premium  exacted  by  the  sovereign  on  the  transmission  of 
an  estate,  the  amount  being  measured  by  the  value  of  the 
property. ' J 

Succession  of  Kohn,  115  La.  71;  38  So.  898. 

Maine. — ' '  The  constitution  guarantees  to  the  citizen  the 
right  of  acquiring,  possessing  and  protecting  property, 
but  the  guarantee  ceases  to  operate  at  the  death  of  the 
possessor.  There  is  no  provision  of  our  constitution  or 
that  of  the  United  States  which  secures  the  right  to  any 
one,  to  contract  or  dispose  of  his  property  after  his  death 
nor  the  right  to  any  one,  whether  kindred  of  or  not,  to 
take  it  by  inheritance.  Descent  is  a  creature  of  statute 
and  not  a  natural  right." 

State  v.  Hamlin,  86  Me.  495;  30  A.  76. 

Maryland. — * '  The  tax  is  on  the  transmission  of  prop- 
erty." 

State  v.  Dalrymple,  70  Md.  294;  17  A.  82. 

Massachusetts. — "  To  make  a  distinction  between  col- 
lateral kindred  or  strangers  in  blood  and  kindred  in  the 
direct  line  in  reference  to  the  assessment  of  such  a  tax, 
either  by  exempting  the  kindred  in  the  direct  line  or  by 


6  INHERITANCE  TAXATION 

imposing  on  collaterals  and  strangers  a  higher  rate  of 
taxation,  has  the  sanction  of  nearly  all  states  which  have 
levied  taxes  of  this  kind.  It  has  a  sanction  in  reason,  for 
the  moral  claim  of  collaterals  and  strangers  is  less  than 
that  of  kindred  in  the  direct  line,  and  the  privilege  is 
therefore  greater.  The  tax  imposed  by  this  statute  is 
uniformly  imposed  upon  all  estates  and  all  persons  within 
the  description  contained  in  it,  and  the  tax  is  not  plainly 
and  grossly  oppressive  in  amount. 

"It  is  argued  that  the  excise,  if  upon  the  privilege  of 
taking  property  by  will  or  descent,  should  be  the  same 
whenever  the  privilege  enjoyed  is  the  same  in  kind  and 
extent,  whatever  may  be  the  value  of  the  estate,  and  that 
the  exemptions  should  relate  to  the  value  of  the  property 
received  by  those  who  have  the  privilege  of  receiving  it, 
and  not  the  value  of  the  estate.  But  the  right  or  privilege 
taxed  can  perhaps  be  regarded  either  as  the  right  or 
privilege  of  the  owner  of  property  to  transmit  it  on  his 
death,  by  will  or  descent,  to  certain  persons,  or  as  the 
right  or  privilege  of  these  persons  to  receive  the  prop- 
erty." 

Minot  v.  Winthrop,  162  Mass.  113;  38  N.  E.  512. 

Michigan. — "  Respondent's  contention  is  that  it  is  a 
tax  upon  the  transfer  of  property  and  is  based  upon  the 
proposition  that  inheritance  is  not  a  natural  right  but  a 
creature  of  the  statute  and  the  bounty  of  the  public.  The 
conclusion  that  this  statute  imposes  an  ad  valorem  tax 
upon  property  can  only  be  avoided  by  saying  that  it  is 
not  a  tax  upon  the  property  and  that,  therefore,  the  ad 
valorem  feature  which  so  far  as  the  assessment  upon  the 
value  is  concerned,  is  certainly  present,  is  wanting  because 
is  is  not  an  assessment  upon  the  value  of  the  property 
taxed.  In  short  the  claim  of  the  respondent  is  that  this 
is  a  tax  upon  a  privilege,  viz.,  the  privilege  of  succession, 
and  that  there  is  a  legal  distinction  between  a  tax  upon 


PAST  I  —  THE  TAX  7 

the  property  itself  assessed  upon  the  basis  of  its  value 
and  a  tax  upon  this  privilege  assessed  upon  the  basis  of 
its  value  which  is  measured  by  that  which  is  the  subject 
of  the  privilege,  viz.,  the  property.  Unless  this  is  a  dis- 
tinction without  a  substantial  difference  the  respondent 
is  right." 

After  citing  many  authorities  the  court  concludes: 
"Many  other  authorities  might  be  cited-  in  support  of 
the  proposition  that  it  is  a  tax  upon  the  privilege  rather 
than  upon  the  property.    We  are  of  the  opinion  that  the 
overwhelming  weight  of  authority  supports  it." 

Union  Trust  Co.  v.  Prolate  Judge,  125  Mich.  487;  84  N.  W.  1101. 

Minnesota. — "  It  is  variously  termed  an  '  inheritance 
tax,'  *  succession  tax,'  '  legacy  tax  '  and  '  probate  duties,' 
but,  whatever  it  may  be  termed  it  is  not  a  tax  upon  prop- 
erty; but  upon  the  right  of  succession  thereto." 
State  v.  Bazille,  97  Minn.  11,  19;  106  N.  W.  93. 

Missouri. —  Contra:  "  When  the  legislature  makes  the 
amount  of  money  received  by  each  the  test  of  classification 
it  runs  counter  to  another  principle  that  is  well  nigh 
universally  accepted  that  a  uniform  rate  of  taxation  upon 
every  man's  property  receives  an  equality  of  burden." 
State  v.  Switzler,  143  Mo.  287;  45  S.  W.  245. 

Montana. — "  The  burden  of  the  tax  is  not  imposed  upon 
the  property  itself  but  upon  the  privilege  of  acquiring 
property  by  inheritance.  In  nearly  all  the  inheritance 
tax  laws  the  statutes  provide  for  an  appraisal  of  the 
property  to  be  inherited;  but  the  object  of  such  valuation 
is  not  to  tax  the  property  itself.  It  is  to  arrive  at  a 
measure  of  the  price  by  which  the  privilege  of  inheritance 
can  be  valued." 

Gelsthorpe  v.  Furnell,  20  Mont.  299;  51  Pac.  267. 

Nebraska. — "  It  is  a  tax  upon  the  right  of  succession  to 
property,  that  is  upon  the  right  to  receive  the  property 


8  INHERITANCE  TAXATION 

from  the  estate  of  the  decedent  and  not  upon  the  property 
itself." 

State  v.  Vinsonhaler,  94  Neb.  675;  144  N.  W.  248. 

New  Hampshire. — "  Those  who  acquire  title  by  the 
operation  of  our  laws  relating  to  the  estates  of  deceased 
persons  must  take  the  benefits  charged  with  the  burden 
imposed  by  those  laws." 

Mann  v.  Carter,  74  N.  H.  345,  352;  68  A.  130. 

Neiv  Jersey. — "  The  tax  imposed  is  on  the  right  of 
succession  under  a  will  or  by  devolution  in  case  of 
intestacy. ' ' 

Hartmann's  Appeal,  70  N.  J.  Eq.  664;  62  A.  560. 

New  York. — "  It  is  a  tax  not  on  property  but  on  succes- 
sion, that  is  to  say  a  tax  on  the  legatee  for  the  privilege  of 
succeeding  to  property." 

Matter  of  Gihon,  169  N.  Y.  443;  62  N.  E.  56L 

"  It  is  in  the  nature  of  an  excise  tax  on  the  right  and 
method  of  transfer." 

Matter  of  White,  208  N.  Y.  64;  101  N.  E.  793. 

"A  tax  is  a  property  tax  when  imposed  by  reason  of 
the  ownership ;  a  transfer  tax  when  imposed  on  the  method 
of  acquisition. ' ' 

Matter  of  VanderUlt,  172  N.  Y.  69;  64  N.  E.  782. 

North  Carolina. — "A  succession  tax  is  on  the  right  of 
succession  to  property  and  not  on  the  property  itself.    The 
right  to  take  property  by  devise  or  descent  is  not  one  of 
the  natural  rights  of  man  but  is  a  creature  of  law." 
Morris'  Estate,  138  N.  C.  259;  50  S.  E.  682. 

Ohio. — "As  a  majority  of  the  court  are  of  the  opinion 
that  it  is  not  a  tax  upon  property  but  upon  the  right  to 
receive  property  the  statute  must  as  to  this  point  be 
sustained. ' ' 

State  v.  Ferris,  53  Ohio  St.  314,  340;  41  N.  E.  579. 


PART  I  —  THE  TAX  9 

Pennsylvania. — "  Conceding  for  argument's  sake  merely 
that  the  legislature  has  power  under  our  constitution 
to  so  change  the  law  of  descent  and  succession  as  to  give 
the  commonwealth  a  certain  portion  of  every  decedent's 
estate,  or  otherwise  to  regulate  the  transmission  or  devo- 
lution of  such  estates,  it  does  not  by  any  means  follow  that 
the  direct  inheritance  tax  law  under  consideration  is  such 
an  act." 

Cope's  Estate,  191  Pa.  St.  1,  23;  43  A.  79. 

South  Dakota. — "  Treating  it  as  the  taxation  of  the 
privilege  or  right  or  even  more  correctly  the  taxation  of 
the  transmission  of  property,  it  is  readily  seen  that  it 
becomes  absolutely  immaterial  whether  we  consider  the 
transmission  of  or  succeeding  to  property  an  inherent 
right  or  a  statutory  privilege.  A  corporation  acquires  its 
right  to  do  business  by  the  charter  received.  A  natural 
person  has  an  inherent  right  to  do  such  business.  If  the 
state  determines  to  tax  the  exercise  of  such  right,  it  does 
so  as  to  both  the  persons  and  the  corporation,  utterly  dis- 
regarding the  nature  or  source  of  the  right. 

"  This  charge  imposed  upon  transmission  of  property 
is  clearly  a  tax  and  has  nothing  to  do  with  and  is  not  at 
all  dependent  for  its  validity  upon  the  right  to  regulate 
the  succession  of  property." 

McKennan's  Estate,  25  S.  D.  369,  377;  126  N.  W.  611. 

Tennessee. — "  It  is  a  retention  by  the  state  of  a  part  of 
a  deceased  person's  property  which  the  state  may  take  to 
meet  its  necessities,  and  which  in  certain  cases  it  may  take 
in  toto  as  in  case  of  escheated  property." 
State  v.  Alston,  94  Tenn.  674;  30  S.  W.  750. 

Utah. — "When,  as  here,  the  tax  is  not  one  which  is  con- 
trolled by  our  constitution  it  is  for  the  legislature  to  say 
to  what  extent  and  upon  what  property  it  shall  become 
operative. ' ' 

Matter  of  Sullen,  151  Pac.  533. 


10  INHERITANCE  TAXATION 

Vermont. — "All  agree  that  this  is  a  tax  upon  the  right 
to  succeed  to  estates  left  vacant  by  death  and  is  imposed 
by  the  sovereignty  regulating  that  right  in  virtue  of  its 
authority  to  enforce  contribution  from  those  who  become 
invested  with  property  by  grace  of  its  power." 
In  re  Joslyn,  76  Vt.  88;  56  A.  281. 

Virginia. — "  The  objection  that  the  tax  is  not  levied 
upon  the  heir  or  legatee  but  is  to  be  paid  out  of  the  estate 
of  the  decedent  and,  therefore,  that  it  cannot  be  considered 
a  tax  upon  the  privilege  of  succeeding  to  the  property  is, 
I  think,  more  specious  than  real.  Whether  the  tax  is 
paid  by  the  personal  representative  before  he  turns  over 
the  estate  to  the  party  entitled  or  by  the  latter  after  he 
receives  it,  the  effect  is  the  same.  It  is  in  either  case 
a  premium  paid  for  the  right  enjoyed  and  the  value  of 
the  estate  is  exactly  diminished  by  the  amount  of  the 
premium. '  * 

Eyre  v.  Jacob,  14  Gratt.  422,  429. 

Washington. — "  The  act  imposes  a  tax  on  the  right  of 
succession. ' ' 

White  v.  Tax  Commissioners,  42  Wash.  360;  84  Pac.  831. 

Wisconsin. — "  It  is  not  a  tax  upon  property  or  upon 
property  rights  in  any  sense,  but  purely  an  excise  levied 
upon  the  transfer  or  transaction  and  merely  measured  in 
amount  by  the  amount  of  the  property  transferred/* 
Seals  v.  State,  139  Wis.  544;  121  N.  W.  347. 

United  States. — "  Thus  the  tax  is  not  upon  the  property 
in  the  ordinary  sense  of  the  word  but  upon  the  right  to 
dispose  of  it,  and  it  is  not  until  it  has  yielded  its  con- 
tribution to  the  state  that  it  becomes  the  property  of  the 
legatee. ' ' 

United  States  v.  Perkins,  163  U.  S.  625;  16  S.  Ct.  Rep.  1073. 


PABT  I  —  THE  TAX  11 

To  the  same  effect  are: 

Matter  of  Sherwell,  125  N.  Y.  376;  26  N.  E.  464. 

Magoun  v.  HI.  Trust  and  Sav.  Bk.,  170  U.  S.  283;  18  S.  Ct.  Rep.  594. 

Plummer  v.  Coler,  178  U.  S.  115;  20  S.  Ct.  Rep.  829. 

Be  Hagnes,  32  Colo.  52;  77  Pac.  853. 

Re  Macky,  45  Colo.  316;  101  Pac.  334. 

Wieting  v.  Morrow,  151  la.  590;  132  N.  W.  193. 

Leavell  v.  Arnold,  131  Ky.  426;  115  S.  W.  232. 

Schoolfield  v.  Lynchburg,  78  Va.  366. 

Pullen  v.  Commissioners,  66  N.  C.  361. 

Humphreys  v.  State,  70  Ohio  St.  67;  70  N.  E.  957. 

Thompson  v.  Kidder,  74  N.  H.  89;  65  A.  392. 

Tyson  v.  State,  28  Md.  577. 

Drew  v.  Tifft,  79  Minn.  175;  81  N.  W.  839. 

But  if  the  act  is  construed  as  a  property  tax  it  is  void: 

Cope's  Estate,  191  Pa.  St.  1;  43  A.  79. 
Chambe  v.  Durfee,  100  Mich.  112;  58  N.  W.  661. 
Re  Fox,  154  Mich.  5;  117  N.  W.  558. 

The  legislature  has  inherent  power  to  impose  inheritance 
taxes: 

Snyder  v.  Bettman,  190  U.  S.  249;  23  S.  Ct.  Rep.  803. 

Curry  v.  Spencer,  61  N.  H.  624. 

State  v.  Lancaster,  4  Neb.  537. 

Re  Nettleton,  76  Conn.  235;  56  A.  565. 

Re  Joslyn,  76  Vt.  88;  56  A.  281. 

Re  Inheritance  Tax,  23  Colo.  492;  48  Pac.  535. 

State  v.  Clark,  30  Wash.  439 ;  71  Pac.  20. 

2.  The  Privilege  Taxed. 

It  is  obvious  that  the  authorities  are  unanimous  in 
declaring  that  an  inheritance  tax  is  not  and  cannot  be 
a  tax  on  property  without  violating  the  constitutional 
principles  of  uniformity  and  equality.  They  also  agree 
that  such, a  tax  is  an  excise  or  impost  upon  the  right  or 
privilege  of  transmitting  property  from  the  dead  to  the 
living. 

It  is  equally  apparent  that  there  is  some  confusion  or 
inaccuracy  as  to  whether  the  inheritance  tax  imposed  by 


12  INHERITANCE  TAXATION 

a  particular  statute  is  on  the  right  to  transmit,  the  right  to 
receive,  or  both.  It  is  described  as  a  succession  tax  on 
the  right  to  receive  by  the  courts  of  Colorado,  Connecticut, 
Michigan,  Minnesota,  Montana,  Nebraska,  New  Hampshire, 
New  Jersey,  North  Carolina,  Ohio,  Vermont,  Virginia 
and  "Washington. 

It  is  referred  to  as  a  bonus,  premium  or  excise  on  the 
right  to  control  the  disposition  of  property  after  death 
by  the  courts  of  Louisiana,  Tennessee  and  Wisconsin;  but 
the  statutes  under  construction  were  distinctly  succession 
taxes  on  the  share  of  each  beneficiary. 

It  is  described  as  a  tax  on  both  the  right  to  devise  and 
the  right  to  inherit  by  the  leading  cases  in  California, 
Illinois,  Maine,  Massachusetts,  New  York,  South  Dakota, 
and  the  United  States  Supreme  Court. 

In  truth  the  rights  can  scarcely  be  separable,  for,  if 
there  is  a  transfer,  and  the  tax  is  on  that  transfer,  there 
must  be  a  transferrer  and  a  transferee.  No  court  adopt- 
ing one  theory  denies  that  the  other  is  equally  tenable. 
Clearly  if  the  legislature  has  power  to  tax  the  privilege  of 
transmitting  it  must  also  have  the  power  to  tax  the  priv- 
ilege of  receiving  and  vice  versa. 

When  it  comes  to  the  imposition  of  the  tax  the  wide 
divergence  between  the  two  theories  becomes  apparent. 
If  the  tax  is  on  the  right  to  transfer  it  is  on  the  entire 
estate  without  reference  to  the  beneficiaries.  This  is  prac- 
ticable as  long  as  it  is  a  "  flat  rate,"  such  as  is  imposed  on 
the  whole  estate  by  the  statutes  of  Rhode  Island  and  was 
formerly  imposed  in  New  York 

The  difficulty  arises  when  graded  rates  are  imposed  on 
the  right  to  transmit,  viz.,  upon  the  entire  estate,  without 
reference  to  the  beneficiaries.  If  the  estate  is  $1,000,000 
and  there  are  legacies  of  $100,000  to  three  heirs  of  different 
degrees  of  relationship  and  a  residuary  of  $700,000,  and 
the  tax  is  on  the  whole  estate  $50,000,  at  one  rate,  $100,000 


PART  I  —  THE  TAX  13 

at  another  rate,  and  so  on  up  to  the  million,  and  no  pro- 
vision is  made  for  adjustment  among  the  beneficiaries,  we 
have  the  ' '  confusion  worse  confounded  ' '  produced  by  the 
federal  tax  of  1916. 

The  right  to  transmit,  being  a  single  right,  should  be 
uniformly  taxed,  without  rates  graded  in  proportion  to 
the  amount  of  the  transfer.  Graded  rates  have  thus  far 
only  been  sustained  when  the  tax  is  on  the  succession  and 
is  apportioned  among  the  beneficiaries.  Whether  they  are 
constitutional  when  imposed  on  the  right  to  transfer  with- 
out reference  to  the  transferee  remains  to  be  determined. 

State  v.  Ferris,  53  Ohio  St.  314;  41  N.  E.  579.. 
Knowlton  v.  Moore,  178  U.  S.  41,  76;  20  S.  Ct.  Rep.  747. 

3.  Statutes  Held  Invalid. 

In  1897  Pennsylvania  enacted  a  direct  inheritance  tax 
which  was  declared  unconstitutional  as  a  tax  on  property, 
though  it  was  substantially  copied  from  statutes  sustained 
in  other  states  on  the  theory  of  a  tax  on  privilege ;  but  the 
court  is  careful  not  to  say  that  a  statute  might  not  be  sus- 
tained on  the  privilege  theory  if  so  worded  as  to  be  clearly 
an  excise. 

Cope's  Estate,  191  Pa.  St.  1;  43  A.  79. 

In  view  of  the  overwhelming  authority  upholding  such 
statutes  it  is  not  improbable  that  the  Pennsylvania  courts 
would  now  uphold  a  carefully  drawn  direct  inheritance 
tax.  The  original  collateral  inheritance  tax  was  enacted 
in  that  state  in  1826,  prior  to  the  present  constitution. 
Inheritance  tax  statutes  have  also  been  held  invalid  for  a 
lack  of  uniformity  and  equality  in  Missouri,  Minnesota, 
New  Hampshire,  Ohio,  and  Wisconsin. 

Minnesota,  ISfew  Hampshire  and  Wisconsin  have 
amended  their  constitutions  and  the  subsequent  inheritance 
tax  laws  are  now  upheld  in  those  states.  Missouri  has 


14  INHERITANCE  TAXATION 

just  enacted  another  direct  inheritance  tax  under  the  same 
constitution  while  Ohio  contents  herself  with  a  collateral 
inheritance  tax. 

State  v.  Switzler,  143  Mo.  287;  45  S.  W.  245. 
State  v.  Ferris,  53  Ohio  St.  314;  41  N.  E.  579. 

4.  Practical  Applications  of  the  Rule. 

a.  NOT   A   DIRECT    TAX   TO   BE   APPORTIONED   AMONG   THE 

STATES. 

The  results  of  the  doctrine  that  inheritance  taxes  are 
not  imposed  upon  property  but  upon  privilege  are  far 
reaching,  as  a  few  of  its  practical  applications  will  illus- 
trate. 

The  Federal  inheritance  tax  of  1898  was  construed  as  an 
excise  or  impost  and  not  a  direct  tax  and  was  not  required 
to  be  apportioned  among  the  states  in  proportion  to  their 
population. 

Knowlton  v.  Moore,  178  U.  S.  41;  20  S.  Ct.  Rep.  747. 

The  court  said :  "  It  is  apparent  that  if  imposts,  duties 
and  excises  are  controlled  by  the  rule  of  intrinsic 
uniformity  the  methods  usually  employed  at  the  time  of 
the  adopting  of  the  constitution  in  all  countries  in  the 
levy  of  such  taxes  would  have  to  be  abandoned."  And 
again  —  at  page  109,  "  Taxes  imposed  with  reference  to 
the  ability  of  the  person  upon  whom  the  burden  is  placed 
to  bear  the  same  have  been  levied  from  the  foundation  of 
the  government. " 

b.  PROPERTY  OTHERWISE  EXEMPT  MUST  BE  INCLUDED  AND 

VALUED. 

This  is  so  as  to -United  States  government  bonds. 

Matter  of  Sherman,  153  N.  Y.  1;  46  N.  E.  1032. 

People  ex  rel.  U.  S.  A.  P.  P.  Co.  v.  Knight,  174  N.  Y.  475;  67  N.  E.  66. 

Plummer  v.  Coler,  178  U.  S.  115;  20  S.  Ct.  Rep.  829. 

Wallace  v.  Myers,  38  Fed.  184. 


PART  I  — THE  TAX  15 

Also  as  to  a  bequest  to  the  United  States  government. 

Matter  of  Cullom,  76  Hun,  610;  27  Supp.  1105;  affd.,  145  N.  Y.  593; 

40  N.  E.  163. 
Matter  of  Merriam,  141  N.  Y.  479;  36  N.  E.  505;  affd.,  163  U.  S. 

625;  16  S.  Ct.  Rep.  1073. 

All  property  exempt  by  general  statutes  from  taxation 
is  none  the  less  subject  to  inheritance  taxes  on  its  transfer. 

McKennan's  Estate,  25  S.  Dak.  369;  126  N.  W.  611. 
Matter  of  Kucielski,  144  App.  Div.  100;  128  Supp.  768. 

Thus  where  the  state  constitution  limited  the  valuation 
of  mining  claims  to  the  price  paid  therefor  to  the  United 
States  government  they  must  none  the  less  be  inventoried 
at  their  full  value  for  the  purposes  of  taxing  their  trans- 
fer by  inheritance. 

Touhy's  Estate,  35  Mont.  431;  90  Pac.  170. 

c.  CONSTRUCTION  OF  CONTRACTS. 

The  rule  often  affects  the  construction  of  contracts.  For 
example,  provisions  in  a  ninety-nine  year  lease  whereby 
the  lessee  is  to  pay  "  taxes,  charges  and  assessments,"  do 
not  require  him  to  pay  the  inheritance  tax  imposed  by 
reason  of  the  death  of  the  lessor  because  the  tax  is  on  the 
transfer  and  not  on  the  property. 

North  Trust  Co.  v.  Buck,  263  111.  222;  104  N.  E.  1114. 

d.  PERSONALTY  OF  RESIDENT  TAXED,  THOUGH  IN  FOREIGN 

JURISDICTION. 

Intangible  assets  of  a  resident  decedent,  though  located 
in  a  foreign  jurisdiction,  must  be  included  in  the  valuation 
of  his  estate,  even  though  they  have  been  distributed  else- 
where. 

Bullen  v.  Wisconsin,  240  U.  S.  625;  36  S.  Ct.  Rep.  473. 

A  well-considered  case  in  Massachusetts  thus  explains 
the  rule: 

' '  But  whatever  the  form  of  the  tax,  the  succession  takes 
place  and  is  governed  by  the  law  of  the  domicile;  and,  if 


16  INHERITANCE  TAXATION 

the  actual  situs  is  in  a  foreign  country,  the  courts  of  that 
country  cannot  annul  the  succession  established  by  the  law 
of  the  domicile.  Dammert  v.  Osborn,  141  N.  Y.  564;  35 
N.  E.  1088.  In  further  illustration  of  the  extent  to  which 
the  law  of  the  domicile  operates,  it  is  to  be  noted  that  the 
domicile  is  regarded  as  the  place  of  principal  administra- 
tion, and  any  other  administration  is  ancillary  to  that 
granted  there.  Payment  by  a  foreign  debtor  to  the  domi- 
ciliary administrator  will  be  a  bar  to  a  suit  brought  by  an 
ancillary  administrator  subsequently  appointed.  Wilkins 
v.  Ellett  and  Stevens  v.  Gaylord,  ubi  supra;  Hutchins  v. 
State  Bank,  12  Met.  421 ;  Martin  v.  Gage,  147  Mass.  204, 17 
N.  E.  310.  And  the  domiciliary  administrator  has  suffi- 
cient standing  in  the  courts  of  another  state  to  appeal  from 
a  decree  appointing  an  ancillary  administrator.  Smith  v. 
Sherman,  4  Cush.  408.  Moreover,  it  is  to  be  observed,  if 
that  is  material,  that  there  has  been  no  administration  in 
New  York,  that  the  executor  was  appointed  here,  and  has 
taken  possession  of  the  property  by  virtue  of  such  appoint- 
ment and  must  distribute  it  and  account  for  it  according  to 
the  decrees  of  the  courts  of  this  commonwealth.  To  say, 
therefore,  that  the  succession  has  taken  place  by  virtue  of 
the  law  of  New  York  would  be  no  less  a  fiction  than  the 
petitioners  insist  that  the  maxim  mobilia  sequuntur  perso- 
nam  is  when  applied  to  matters  of  taxation." 
Frothingham  v.  Shaw,  175  Mass.  59 ;  55  N.  E.  623. 

In  sustaining  the  right  to  tax  personal  property  of  a 
resident  though  out  of  the  state  the  Connecticut  court  rea- 
sons thus : 

*  *  The  same  principle  of  universal  jurisdiction  of  a  state 
to  determine  the  succession  to  and  distribution  of  personal 
property  situate  within  other  states  recognizes  the  power 
and  duty  of  such  states  to  provide  local  administrations 
in  respect  to  such  property  in  aid  of  the  administration 
of  the  domicile.  And  our  succession  tax  is  computed  with 


PART  I  —  THE  TAX  17 

reference  to  the  value  of  the  whole  beneficial  succession 
which  passes  by  force  of  our  law  and  payment  of  the  tax 
thus  computed  is  required  from  the  principal  administra- 
tor although  some  portion  may  be  actually  received  by  a 
beneficiary  at  the  hands  of  an  ancillary  administrator." 
Hopkins'  Appeal,  77  Conn.  644,  653 ;  60  A.  657. 

So,  it  is  held  in  California,  that  personal  property  of  a 
resident  decedent  dying  testate  or  intestate,  located  outside 
of  the  state,  and  which  is  never  brought  into  the  state 
for  purposes  of  administration,  is  subject  to  an  inherit- 
ance tax  in  that  state  under  the  application  of  the  familiar 
maxim  mobilia  personam  sequuntur,  for  by  this  rule  the 
right  of  succession  to  such  property  is  governed  by  the 
law  of  the  domicile  and  not  by  the  law  of  the  locality  of 
the  property.  This  rule  is  subject  to  the  limitation  that 
there  be  no  rule  to  the  contrary  in  the  state  where  the  per- 
sonal property  is  actually  located.  But  there  is  no  rule 
to  the  contrary  in  Massachusetts.  The  fact  that  the  state 
in  which  the  personal  property  is  distributed  on  ancillary 
administration  also  imposes  an  inheritance  tax  does  not 
violate  any  principle  of  constitutional  law  against  double 
taxation. 

Matter  of  Hodges,  50  Cal.  Dec.  15. 

*  *  The  fact  that  the  petitioner  was  able  to  obtain  a  trans- 
fer of  a  large  part  of  the  stock  before  the  will  was  proved 
in  this  commonwealth  does  not  affect  his  duty  under  the 
statute  to  pay  the  tax. ' ' 

Greves  v.  Shaw,  173  Mass.  205;  53  N.  E.  72. 

On  the  other  hand  the  mere  fact  that  an  executor  of  a 
foreign  decedent  resides  within  the  state  does  not  make 
him  subject  to  its  laws  in  his  capacity  as  executor  or  ren- 
der the  property  over  which  the  court  of  another  state 
has  given  him  jurisdiction  liable  to  taxation  in  the  state 
where  he  resides. 

Commonwealth  v.  Peebles,  134  Ky.  121;  119  S.  W.  774. 


18  INHERITANCE  TAXATION 

The  court  said : 

"  One  may  occupy  the  two  relations,  of  individual  and 
executor;  and,  as  individual,  he  may  be  subject  to  the  laws 
of  one  state,  and  in  his  official  capacity,  he  may  be  subject 
to  the  laws  of  another  state,  and  he  may,  as  executor,  have 
the  legal  ownership  of  property  over  which  the  courts  of 
the  state  in  which  he  resides  have  no  jurisdiction/'  So 
the  fact  that  an  executor  of  an  Ohio  decedent  who  quali- 
fied in  Ohio  was  domiciled  in  Kentucky  did  not  render 
the  assets  of  the  Ohio  decedent  in  the  hands  of  the  Ken- 
tucky executor  liable  to  the  tax  in  Kentucky. 

e.  INTANGIBLES  OF  NON-RESIDENT  WITHIN  THE  STATE  TAX- 

ABLE. 

On  the  same  theory  it  is  reasoned  that  a  state  may  tax 
the  intangible  property  of  a  non-resident  when  within  its 
jurisdiction. 

"  The  tax  is  on  the  transmission  of  the  property  being 
in  the  state  and  no  reason  has  been  assigned  nor  can  be 
suggested  why  the  broad  language  of  the  statute  and  the 
evident  design  of  the  legislature  should  be  so  narrowed 
and  restricted  as  to  exempt  from  this  tax  the  property  of 
a  non-resident  actually  here  notwithstanding  that  the  same 
property  may  for  other  purposes  be  treated  as  construc- 
tively elsewhere." 

State  v.  Dalrymple,  70  Md.  294;  17  A.  82. 

The  right  to  succeed  to  property  of  a  non-resident  hav- 
ing its  situs  in  New  Jersey  is  taxable  there. 
Carr  v.  Edwards,  84  N.  J.  L.  667;  87  A.  132. 

f.  DOUBLE  TAXATION. 

This  is  the  logical  result  although  the  courts  declare 
that  it  is  to  be  avoided  if  it  is  within  the  power  of  reason 
to  do  so. 

Matter  of  James,  144  N.  Y.  6,  11;  38  N.  E.  961. 
Matter  of  Cooley,  186  N.  Y.  220,  227;  78  N.  E.  939. 
State  v.  Davis,  88  Kan.  849;  129  Pac.  1197. 


PAET  I  —  THE  TAX  19 

The  difficulty  is  that  the  legislatures  of  the  several  states 
having  the  power  insist  upon  imposing  it, —  and  the  deci- 
sions confirm  that  power. 

A  few  will  illustrate : 

"  It  has  before  this  been  pointed  out  (Blackstone  v. 
Miller,  188  U.  S.  189)  that  our  state  imposes  a  succession 
tax  upon  the  theory  or  the  fiction  that  the  situs  of  the  per- 
sonal estate  is  the  domicile  of  the  owner  while  another 
state  imposes  it  upon  the  ground  that  the  actual  situs  is 
within  the  state  and  the  same  state  may  assume  either 
position  as  the  domicile  of  the  decedent  or  the  presence  of 
the  property  within  the  state  requires  it. ' ' 
Stanton's  Estate,  142  Mich.  491;  105  N.  W.  1122. 

Though  Pennsylvania  consistently  adheres  to  the  taxa- 
tion of  intangibles  at  domicile  of  owner  and  not  within  the 
state  under  ancillary  administration; 

McKeen  v.  Northampton  County,  49  Pa.  St.  519. 

When  the  distribution  and  administration  are  to  be  made 
by  the  Pennsylvania  courts  held  taxable. 
Lewis'  Estate,  203  Pa.  St.  211,  217;  52  A.  205. 

'  *  The  fact  that  two  states  dealing  each  with  its  own  law 
of  succession,  both  of  which  the  plaintiff  in  error  has  to 
invoke  for  her  rights  have  taxed  the  right  which  they  re- 
spectively confer,  gives  no  cause  for  complaint  on  consti- 
tutional grounds.  Blackstone  v.  Miller,  188  U.  S.  189,  206, 
207 ;  23  S.  Ct.  Eep.  277.  The  fact  that  the  property  may 
be  subject  to  a  similar  burden  in  another  state  does  not 
deprive  this  state  of  its  power  to  impose  the  tax  here  upon 
the  property  which  passes  by  inheritance  or  by  will  under 
our  laws." 

Mann  v.  Carter,  74  N.  H.  345,  352;  68  A.  130. 

"  The  great  weight  of  authority  favors  the  principle 
adopted  by  the  New  York  Court  of  Appeals  holding  that 


20  INHERITANCE  TAXATION 

the  tax  imposed  is  on  the  right  of  succession  under  a  will 
or  by  devolution  in  case  of  intestacy,  and  that  as  to  per- 
sonal property  its  situs,  for  the  purpose  of  a  legacy  or  suc- 
cession tax,  is  the  domicile  of  the  decedent,  and  the  right 
to  its  imposition  is  not  affected  by  the  statute  of  a  foreign 
state,  which  subjects  to  similar  taxation  such  portion  of 
the  personal  estate  of  any  non-resident  testator  or  intestate 
as  he  may  take  and  leave  there  for  safe  keeping  or  until 
it  should  suit  his  convenience  to  carry  it  away. '  ' 
Hartmann's  Appeal,  70  N.  J.  Eq.  664,  667;  62  A.  560. 

The  leading  case  is  Matter  of  Blackstone  which  arose  in 
New  York,  was  decided  by  the  Appellate  Division,  69  App. 
Div.  127 ;  74  Supp.  508,  was  affirmed  by  the  Court  of  Appeals 
without  opinion  171  N.  Y.  682 ;  64  N.  E.  1118,  on  the  author- 
ity of  Matter  of  Houdayer,  150  N.  Y.  37 ;  44  N.  E.  718.  It 
then  went  to  the  United  States  Supreme  Court. 

The  testator,  a  resident  of  Illinois,  had  $4,840,000  on 
deposit  with  New  York  bankers  and  both  states  imposed 
inheritance  taxes.  The  appeal  was  from  the  tax  sought 
to  be  collected  by  the  New  York  state  comptroller. 

The  United  States  Supreme  Court  said,  in  sustaining 
the  tax :  *  '  No  doubt  this  power  on  the  part  of  two  states 
to  tax  on  different  and  more  or  less  inconsistent  principles 
leads  to  some  hardship.  It  may  be  regretted  also  that  one 
and  the  same  state  should  be  seen  taxing  on  the  one  hand 
according  to  the  fact  of  power  and  on  the  other,  at  the  same 
time,  according  to  the  fiction  that  in  successions  after  death 
mobilia  sequuntur  personam  and  domicile  governs  the  whole 
but  these  inconsistencies  infringe  no  rule  of  constitutional 
law.  If  the  transfer  of  the  deposit  necessarily  depends 
upon  and  involves  the  law  of  New  York  for  its  exercise  or, 
in  other  words,  if  the  transfer  is  subject  to  the  power  of 
the  state  of  New  York,  then  New  York  may  subject  the 
transfer  to  a  tax.  But  it  is  plain  that  the  transfer  does 


PABT  I  —  THE  TAX  21 

depend  upon  the  law  of  New  York  not  because  of  any  theo- 
retical speculation  concerning  the  whereabouts  of  the  debt 
but  because  of  the  practical  fact  of  its  power  over  the  per- 
son of  the  debtor.  What  gives  the  debt  validity?  Nothing 
but  the  fact  that  the  law  of  the  place  where  the  debtor  is 
will  make  him  pay. ' ' 

Blackstone  v.  Miller,  188  U.  S.  189,  205;  23  S.  Ct.  Rep.  277. 

B— THE  TRANSFER  TAKES  PLACE  AT  DEATH. 

This  rule  is  almost  equally  important  in  the  law  of  inherit- 
ance taxation  as  is  the  rule  that  the  tax  is  on  the  transfer 
of  property  and  not  on  property  itself. 

It  is  not  a  transfer  between  the  living  that  is  taxed,  but 
a  transfer  from  the  dead  hand  to  the  living  hand ;  and  there- 
fore it  is  the  doctrine,  subject  to  certain  limitations  and 
exceptions,  that  the  transfer  which  is  the  subject  of  the 
tax  takes  place  at  death. 

The  right  of  the  state  to  the  tax  is  coincident  with  the 
devolution  of  title  or  interest,  and  the  right  of  the  state 
to  exact  a  tax,  as  well  as  the  obligations  of  the  transferee 
to  pay  it,  depend  not  upon  a  formal,  complete,  and  immedi- 
ate change  of  title  or  possession,  but  upon  the  instant  right 
to  a  beneficial  share  or  interest  subject  only  to  the  due 
administration  of  the  estate. 

Matter  of  Eamsdill,  190  N.  Y.  492;  83  N.  E.  584. 

This  same  rule  was  recently  enunciated  by  the  Supreme 
Court  of  Massachusetts  in  construing  a  similar  statute 
where  that  court  said :  '  *  The  rights  of  all  parties,  includ- 
ing the  right  of  the  commonwealth  to  its  tax,  vest  at  the 
death  of  the  testator.  It  is  true  that  the  interest  of  a 
legatee  is  subject  to  an  accounting,  but  it  is  an  interest  in 
the  existing  fund,  and  it  is  analogous  to  that  of  a  cestui 
que  trust." 

Kingsbury  v.  Chapin,  196  Mass.  533;  82  N.  E.  700. 


22  INHERITANCE  TAXATION 

"  The  transfers  take  place  necessarily  at  the  moment  of 
death,  for  the  will  on  the  one  hand  and  the  intestate  laws 
on  the  other  operate  and  speak  from  that  date. ' ' 

Matter  of  Seaman,  147  N.  Y.  69;  41  N.  E.  401. 
Matter  of  Abraham,  151  App.  Div.  441;  135  Supp.  891. 
Matter  of  Meyer,  83  App.  Div.  381;  82  Supp.  329. 

The  effect  of  the  rule  has  been  strikingly  illustrated  in 
two  cases  in  New  York. 

In  Matter  of  Dreyfous,  18  Supp.  767,  28  Abb.  N.  C.  27, 
the  decedent  died  on  the  same  day  that  the  amendment  of 
1891,  chapter  215,  was  signed  by  the  governor,  but  death 
occurred  a  few  hours  before  the  signature.  It  was  held 
that  the  amendment  did  not  apply. 

On  the  other  hand,  where  it  was  stipulated  that  death 
occurred  on  the  same  day  the  amendment  was  signed  by  the 
governor,  but  a  few  hours  after  the  signature,  it  was  held 
that  the  amendment  applied. 

Matter  of  Lane,  157  App.  Div.  694;  142  Supp.  788. 

It  is  therefore  important  that  the  governor  or  his  secre- 
tary make  a  memorandum  of  the  hour  the  act  was  signed 
and  it  is  the  practice  of  New  York  executives  to  do  so. 

1.  Vested  Right  of  the  State. 

The  legislature  of  California  sought  to  exempt  a  bequest 
to  Leland  Stanford  university  by  the  will  of  its  founder; 
but  the  court  held  that  the  right  of  the  state  to  the  tax 
vested  at  Stanford's  death  and  could  not  be  given  away. 
It  said :  * '  It  is  only  by  virtue  of  the  statute  that  an  heir 
is  entitled  to  receive  any  of  his  ancestor's  estate;  and  the 
legislature  can  provide  that  the  whole  or  only  a  portion 
shall  go  to  the  heirs  or  other  beneficiaries  upon  the  death 
of  the  ancestor.  This  being  so,  and  the  legislature  in  this 
case  having  determined  that  95  per  cent  of  the  decedent's 
estate  may  go  to  his  heirs,  and  that  5  per  cent  be  retained 


PART  I  — THE  TAX  23 

by  the  state,  it  is  too  clear  for  argument  that  this  5  per 
cent  vested  in  the  state  at  the  same  time  that  the  other  95 
per  cent  vested  in  the  heirs. ' ' 

Stanford's  Estate,  126  Cal.  112;  54  Pac.  259;  58  Pac.  462. 

The  result  of  this  doctrine  was  strikingly  illustrated  in 
the  recent  case  of  National  Safe  Deposit  Co.  v.  Stead,  250 
111.  284;  95  N.  E.  973,  where  the  right  of  the  state  to  inspect 
the  contents  of  a  decedent's  safe  deposit  box  was  chal- 
lenged. In  sustaining  the  right  the  court  reasoned  thus: 
The  relation  between  a  safe  deposit  company  and  the  les- 
see of  one  of  its  boxes  is  that  of  bailor  and  bailee.  Its 
duty  is  to  deliver  the  property  on  the  death  of  the  lessee. 
The  right  to  succeed  to  the  property  is  purely  statutory. 
The  inheritance  tax  is  on  the  right  to  succeed  to  property 
and  not  on  the  property.  Therefore  under  the  tax,  the 
state  has  a  vested  financial  right  in  the  estate  of  the  dece- 
dent, and  therefore  it  has  a  right  to  know  what  property 
is  in  the  safe  deposit  box. 

Another  apt  illustration  is  afforded  by  Matter  of  White, 
208  N.  Y.  64;  101  N.  E.  793.  Here  the  testator  died  in 
March,  1908,  leaving  a  life  estate  to  a  grandson  with 
remainder  to  an  exempt  charity.  The  grandson  died  in 
November,  1908,  before  the  estate  was  distributed,  and  the 
Appellate  Division  held  that  the  actual  duration  of  the  life 
tenant's  life  was  the  measure  of  its  value.  But  the  Court 
of  Appeals  applied  the  doctrine  that  the  tax  was  on  the 
transfer  and  that  the  transfer  took  place  at  the  death  of  the 
testator.  At  the  date  of  that  death  the  grandson's  expecta- 
tion of  life  was  about  35  years,  and  the  court  held  that  the 
value  of  the  life  estate  was  to  be  determined,  not  by  the 
actual  duration,  but  the  theoretical  expectation  of  life. 
The  court  said  at  page  67:  "  The  true  test  by  which  the 
tax  is  to  be  measured  is  the  value  of  the  interest  or  estate 
transferred  at  the  time  of  the  transfer  thereof.  The  in- 
terest of  the  life  beneficiary  accrued  on  the  death  of  the 


24  INHERITANCE  TAXATION 

testatrix  and  its  value  as  of  the  time  of  that  occurrence 
is  the  sum  to  which  the  rate  per  cent  as  fixed  by  the  statute 
should  be  applied. ' ' 

2.  Renunciation  by  Legatee. 

An  apparent  exception  to  the  rule  that  the  right  of  the 
s'tate  to  the  tax  vests  at  death  is  found  in  the  right  of  a 
legatee  to  renounce  his  legacy.  Obviously  this  would  make 
no  difference  if  all  beneficiaries  were  taxed  alike ;  for  the 
renounced  legacy  must  either  pass  under  the  residuary 
clause  or  by  intestacy  and  so  be  taxed.  It  is  therefore 
the  act  of  the  state  itself  in  exempting  or  taxing  at  a  lower 
rate  that  defeats  or  abridges  its  vested  interest.  A  dis- 
tributee in  case  of  intestacy  cannot  renounce  so  as  to 
avoid  the  tax. 

This  principle  was  illustrated  in  Matter  of  Wolfe,  89  App. 
Div.  349;  85  Supp.  949;  aff.  179  N.  Y.  599;  72  N.  E.  1152. 
Executors  who  would  have  been  taxed  at  the  5  per  cent 
rate  renounced  and  the  property  passed  to  testator's  chil- 
dren under  the  residuary  clause  who  were  taxable  at  1  per 
cent.  The  state  claimed  a  vested  right  to  the  5  per  cent 
rate.  The  court  held  that  the  tax  must  be  imposed  as  the 
property  actually  passed  under  the  will. 

To  the  same  effect  is  Owings  v.  State,  22  Md.  116. 

This  presents  a  theoretical  difficulty.  If  the  right  of 
the  legatee  vests  at  death  and  at  that  instant  the  right 
of  the  state  vests  also,  the  act  of  the  beneficiary  should 
not  affect  the  vested  right  of  the  state.  As  will  be  seen 
this  departure  from  a  strictly  scientific  application  of  the 
law  has  opened  a  loophole  for  collusive  arrangements  to 
defeat  the  tax. 

It  is  also  obvious  that  the  decision  rests  upon  the  the- 
ory that  the  tax  is  not  on  the  right  to  transmit,  but  on  the 
right  to  receive. 

Where  heirs  may  claim  either  under  a  deed  delivered 
inter  vivos,  but  not  recorded,  or  under  a  will;  and  they 


PART  I— THE  TAX  25 

elect  to  take  under  the  deed  and  renounce  the  devise  under 
the  will  there  is  no  transfer  under  the  latter. 

Matter  of  Mather,  90  App.  Div.  382;  85  Supp.  657;  affd.,  179  N.  Y. 
526;  71  N.  E.  1134. 

By  an  extension  of  the  same  doctrine  it  is  held  that  a 
legatee  may  accept  in  part  and  renounce  in  part,  leaving 
the  balance  to  pass  under  other  provisions  of  the  will. 
Matter  of  Merritt,  155  App.  Div.  228;  140  Supp.  13. 

3.  Law  in  Force  at  the  Date  of  the  Proceedings  Controls 

Procedure. 

As  to  procedure  the  law  in  force  at  the  rate  of  the  pro- 
ceedings controls  but  as  to  substantive  rights,  the  law  in 
force  at  the  date  of  death. 

Estate  of  Woodard,  153  Cal.  39;  94  Pac.  242. 
Estate  of  Kennedy,  157  Cal.  517,  526;  108  Pac.  280. 

"  It  has  often  been  held  by  this  court  that  the  tax  is  not 
a  tax  upon  property  but  upon  the  right  of  succession  and 
hence  the  true  test  of  value  by  which  the  tax  is  to  be 
measured  is  the  value  of  the  estate  at  the  time  of  the  trans- 
fer of  title  and  not  its  value  at  the  time  of  the  transfer 
of  possession." 

Matter  of  Davis,  149  N.  Y.  539,  547;  44  N.  E.  185. 
Matter  of  Sloane,  154  N.  Y.  109;  47  N.  E.  978. 

4.  Rights  Vested  Prior  to  Death  Cannot  be  Taxed. 

As  the  transfer  is  at  death  rights  which  vested  prior 
to  the  transfer  cannot  be  taxed.  So  where  testator  died 
prior  to  the  statute,  leaving  a  life  estate  and  remainders, 
it  was  held  that  the  transfer  does  not  take  place  at  the 
death  of  the  life  tenant  for  the  right  to  the  remainder 
vested  at  the  death  of  the  testator  and  the  statute  could 
tax  a  transfer  which  had  already  taken  place. 

Matter  of  Pell,  171  N.  Y.  48;  63  N.  E.  789. 
Commonwealth  v.  Well  ford,  114  Va.  372;  76  S.  E.  917. 


26  INHERITANCE  TAXATION 

So  a  trust  deed  reserving  a  life  estate  vests  the  remain- 
der at  the  date  of  the  deed  and  the  transfer  is  not  taxable 
under  a  subsequent  statute. 

State  ex  rel  Toser  v.  Probate  Court,  102  Minn.  268;  113  N.  W.  888. 

In  another  case  a  testatrix  made  a  deed  reserving  a  life 
estate  with  power  of  revocation  which  was  never  exer- 
cised and  by  will  devised  the  same  property  to  the  grantee 
of  the  deed.  She  died  October  20,  1906,  and  the  transfer 
tax  act  became  a  law  March  15,  1906.  Held  that  nothing 
passed  under  the  will  as  the  life  estate  expired  when  she 
died  and  that  the  statute  could  not  tax  the  transfer  by 
deed  made  in  1896  —  ten  years  before. 

Commonwealth  v.  McCauley's  Executor,  166  Ky.  450 ;  179  S.  W.  411. 

The  principle  is  well  illustrated  by  two  New  York  cases. 
In  Matter  of  HarbecTc,  161  N.  Y.  211;  55  N.  E.  850,  the  tes- 
tator died  in  1896  exercising  a  power  of  appointment  cre- 
ated by  the  will  of  an  ancestor  dying  in  1878,  prior  to  the 
enactment  of  the  transfer  tax  statute.  The  court  held  that 
the  effect  of  the  exercise  of  the  power  was  to  write  the 
names  of  the  appointees  into  the  will  of  the  creator  of  the 
power  and  that  the  beneficiaries  took  under  that  will  and 
therefore  their  interests  so  acquired  were  not  subject  to 
the  tax.  The  legislature  then  amended  the  act  to  tax  the 
exercise  of  the  power  as  though  the  property  passing  under 
its  exercise  belonged  absolutely  to  the  donee  of  the  power. 
This  amendment  came  up  for  construction  in  Matter  of 
Dows,  167  N.  Y.  227;  60  N.  E.  439.  The  power  in  that 
case  was  created  under  the  will  of  a  testator  dying  in 
1880,  prior  to  the  statute,  and  was  exercised  by  the  will 
of  a  testator  dying  in  1899,  after  the  statute.  It  was  held 
that  the  legislature  had  a  right  to  declare  that  the  transfer 
took  place  on  the  exercise  of  the  power  and  not  at  its  crea- 
tion and  that  the  transfer  was  therefore  taxable.  This 
was  sustained  in  Orr  v.  Oilman,  183  U.  S.  278;  22  S.  Ct. 
Eep.  213. 


PART  I  —  THE  TAX  27 

To  the  same  effect  is 

Miller  v.  Mclaughlin,  141  Mich.  425;  104  N.  W.  777. 

5.  Amendment  and  Repeal. 

The  same  principles  apply  in  case  of  amendment  and 
repeal  as  in  construing  the  original  enactment.  An  amend- 
ment creating  exemptions  will  not  be  given  a  retroactive 
effect. 

Cornell  v.  Crosby,  210  111.  380;  71  N.  E.  350. 

Procedure  may  be  changed  and  applied  to  taxation  of 
estates  when  death  has  already  occurred  but  the  substan- 
tive rights  remain  unaffected. 

Matter  of  Davis,  149  N.  Y.  539;  44  N.  E.  185. 

"  The  legislature  might  perhaps  abolish  all  laws  for  the 
collection  of  debts ;  this  however  would  not  have  the  effect 
of  paying  or  discharging  the  debts  or  in  the  least  impair 
the  obligation  to  pay  them. ' ' 

Estate  of  Stanford,  126  Cal.  112;  54  Pac.  259;  58  Pac.  462. 

So  when  testator  died  while  the  tax  act  was  in  force, 
but  no  steps  had  been  taken  for  collection  and  the  repeal- 
ing act  saved  no  rights  of  appraisal ;  in  an  action  in  equity 
to  quiet  title  held :  "If  there  be  a  valid  claim  against  such 
property  the  plaintiff  cannot  in  this  equitable  proceeding 
quiet  his  title  against  such  claim,  even  though  the  same 
be  unenforceable  by  legal  proceedings,  without  paying  the 
claim. ' ' 

Trippet  v.  State,  149  Cal.  521;  86  Pac.  1084. 
Estate  of  Lander,  66  Cal.  App.  744;  93  Pac.  202. 

That  the  right  of  the  state  to  the  tax  vests  at  death  and 
cannot  be  lost  by  subsequent  repeal  of  the  statute  was 
strikingly  illustrated  in  a  recent  case  in  New  York  —  Mat- 
ter of  Wright,  214  N.  Y.  714;  108  N.  E.  1112.  There  the 
testator  died  a  non-resident  in  1909.  By  the  will  of  his 
mother  a  life  interest  in  a  fund  was  given  to  his  brother 
and  in  default  of  issue  of  the  brother  to  the  testator.  The 


28  INHEKITANCE  TAXATION 

brother  lived  until  1912  when  he  died  without  issue.  The 
remainder  then  passed  under  the  will  of  testator.  The 
trust  fund  consisted  of  stock  in  a  New  York  corporation. 
In  1911  the  statute  taxing  intangible  personal  property 
of  non-residents  was  repealed.  It  was  contended  that  the 
remainder  interest,  being  defeasible  by  the  birth  of  issue 
to  the  brother,  could  not  be  ascertained  on  the  death  of  the 
remainderman  in  1909,  and  was  not  taxable  until  1912  — 
when  the  life  tenant  died;  and,  as  the  statute  was  then 
repealed,  no  tax  was  due  and  the  Appellate  Division  so 
held,  two  justices  dissenting.  The  Court  of  Appeals  held 
that  the  tax  accrued  on  the  death  of  the  remainderman  in 
1909,  although  the  life  tenant  survived  him,  and,  being 
vested  in  the  state,  was  not  defeated  by  the  repealing  act 
of  1911. 

When  the  later  act  repealing  the  former  is  in  part  the 
same,  or  in  similar  language  to  the  same  effect,  it  will  be 
construed  as  continuing  the  former  statute  to  that  extent. 
Howard's  Estate,  80  Vt.  489;  68  A.  513. 

An  amendment  is  some  indication  that  the  law  did  not 
cover  the  case  before. 

Matter  of  Enston,  113  N.  Y.  174;  21  N.  E.  87. 

Successive  laws  are  construed  as  a  continuation  of  one 
another. 

Matter  of  Prime,  136  N.  Y.  347;  32  N.  E.  1091. 
Matter  of  Brundage,  31  App.  Div.  348;  52  Supp.  362. 

The  words  "  this  act  "  and  "  this  article  "  apply  to  and 
include  the  original  and  each  successive  act. 

Matter  of  Embury,  20  Misc.  75;  45  Supp.   821;   aff.   154  N.   Y. 
746;  49  N.  E.  1096. 

A  statute  repeals  by  implication  the  repugnant  provisions 
of  another  statute  passed  the  same  day  but  at  an  earlier 
hour. 

State  v.  District  Court,  41  Mont.  357;  109  Pac.  438. 
Bailey  v.  Drane,  96  Tenn.  16;  33  S.  W.  573. 


PART  I  — THE  TAX  29 

The  court  said : 

*  *  It  is  of  no  consequence,  in  legal  contemplation,  that  the 
two  enactments  were  made  at  the  same  session  of  the  legis- 
lature and  on  the  same  day.  The  repugnance  and  conflict 
are  no  less  on  that  account  but  are  the  same  that  they  would 
have  been  if  the  two  acts  had  been  passed  and  approved 
at  different  sessions  far  apart.  The  reason  and  necessity 
for  the  rule  recognizing  repeals  by  implication  is  the  same 
in  one  case  as  in  the  other.  The  two  provisions  referred 
to  cannot  coexist.  They  cannot  stand  together.  This  be- 
ing so  the  latter  one  must  prevail. ' ' 

So  it  is  held  that  the  passage  of  a  general  revenue  act 
without  reference  to  the  inheritance  tax  has  been  held  to 
repeal  that  tax  by  implication. 

Fox  v.  Commonwealth,  16  Gratt.  1. 

Succession  of  Frigalo,  123  La.  71;  48  So.  652. 

Bailey  v.  Drane,  96  Term.  16;  33  S.  W.  573. 

Zickler  v.  Union  Bank  and  Trust  Co.,  104  Tenn.  277;  57  S.  W.  341. 

A  saving  clause  in  a  repealing  act  does  not  apply  to  re- 
mainders after  life  estates  where  the  life  tenant  still  sur- 
vives. 

Clapp  v.  Mason,  94  U.  S.  589. 

Mason  v.  Sargent,  104  U.  S.  689. 

United  States  v.  Rankin,  8  Fed.  872. 

United  States  v.  Hazard,  8  Fed.  380. 

United  States  v.  N.  T.  Ins.  and  Trust  Co.,  Fed.  Cas.  15,873. 

Sturges  v.  U.  S.,  117  U.  S.  363;  6  S.  Ct.  Rep.  767. 

United  States  v.  Kelley,  28  Fed.  845. 

Repeal  cannot  affect  a  case  pending  in 'the  U.  S.  Supreme 
Court. 

Campbell  v.  California,  200  U.  S.  87^  26  S.  Ct.  Rep.  182. 

An  unconstitutional  statute  is  void  and  a  tax  paid  there- 
under may  be  recovered. 

Matter  of  Brenner,  170  N.  Y.  185;  63  N.  E.  133. 


30  INHERITANCE  TAXATION 

So  it  was  held  in  New  Jersey  that  the  inheritance  tax 
of  1894  was  not  to  be  a  property  tax  and  was  valid,  and 
remained  unaffected  by  the  void  act  of  1906. 
Eastwood  v.  Russell,  81  N.  J.  L.  672;  81  A.  108. 

The  act  of  1909  rendered  the  act  of  1906  enforceable. 

Sawter  v.  Shoenthdl,  83  N.  J.  L.  499;  83  A.  1004,  reversing  judgment, 
81  N.  J.  L.  197;  80  A.  101. 

6.  Gains  or  Losses  During  Administration. 

As  the  transfer  takes  place  at  death  and  the  tax  then 
accrues,  interest  that  accrues  or  other  gains  during  admin- 
istration are  not  taxed  —  as  the  transfer  has  already  taken 
place  and  they  are  the  property  of  the  living  and  not  of 
the  dead. 

fatter  of  Vassar,  127  N.  Y.  1;  27  N.  E.  394. 

Of  course  as  to  interest  accrued  prior  to  death,  it  be- 
longed to  the  decedent  and  must  be  valued  as  part  of  the 
estate. 

Matter  of  Hewitt,  181  N.  Y.  547;  74  N.  E.  1118. 

The  practical  application  of  this  rule  has  sometimes 
worked  serious  hardships  as  when  an  equity  of  redemp- 
tion, valued  on  appraisal  at  $8,000,  was  wiped  out  by  a 
mortgage  foreclosure. 

Matter  of' Meyer,  209  N.  Y.  386;  103  N.  E.  713. 

When  the  executor  was  forced  to  sell  stocks  at  a  loss 
during  administration  which  caused  a  shrinkage  of  nearly 
one-fourth  of  the  estate  the  tax  was  imposed  on  the  value 
at  death  and  no  deduction  was  allowed. 

Matter  of  Penfold,  216  N.  Y.  163;  110  N.  E.  497. 

In  enforcing  the  rule  despite  this  apparent  injustice  the 
court  said: 

11  It  is  by  statute  due  and  payable  at  the  time  of  the  trans- 
fer, that  is,  at  the  death  of  the  decedent.  It  accrues  at  that 


PART  I  —  THE  TAX  31 

time  and  the  amount  of  the  tax  is  not  affected  by  an  increase 
or  decrease  in  the  clear  market  value  of  the  estate  between 
the  date  of  the  decedent's  death  and  its  subsequent  distri- 
bution among  beneficiaries  or  transferees  under  the  will. 
The  necessity  for  certainty  and  uniformity  in  the  time 
when  the  tax  accrues  and  becomes  due  and  payable  required 
the  adoption  by  the  legislature  of  a  fixed  and  arbitrary 
rule." 

The  rule  was  applied  in  California  in  a  still  harsher  case 
where  the  executor  embezzled  $98,000  and  the  beneficiaries 
never  received  the  money. 

Hite's  Estate,  159  Cal.  392;  113  Pac.  1072. 

But  the  tax  is  imposed  before  it  reaches  the  legatee  and 
before  it  has  become  his  property. 

Matter  of  Finnen,  196  Pa.  St.  72;  46  A.  269. 
Matter  of  Hartmann,  70  N.  J.  Eq.  664;  €2  A.  560. 

In  view  of  this  obvious  injustice  the  Federal  Statute  and 
the  inheritance  tax  law  of  Rhode  Island  adopted  in  1916 
allow  a  deduction  for  losses  during  administration  except  a 
fall  in  the  market  price  of  stocks.  On  the  other  hand  Mon- 
tana taxes  any  increase  during  administration  including 
increase  in  value  of  securities. 

Matter  of  Tuohy,  35  Mont.  431;  90  Pac.  170. 

Curiously  enough  both  the  Rhode  Island  Statute  and  the 
Federal  act  impose  a  tax  upon  the  right  to  transmit.  Obvi- 
ously such  a  tax  must  accrue  at  death  and  not  upon  dis- 
tribution which  makes  the  deduction  for  losses  after  death 
distinctly  an  act  of  grace. 

Its  justice  and  propriety  however  are  so  apparent  that 
these  statutes  will  doubtless  be  followed  in  other  states  as 
their  acts  are  amended  in  the  light  of  experience  with  the 
practical  application  of  the  transfer  tax  laws. 

In  the  Matter  of  Penfold,  supra,  an  appeal  to  the  Su- 
preme Court  of  the  United  States  is  pending. 


32  INHERITANCE  TAXATION 

7.  Exceptions  to  the  Rule. 

The  general  rule  that  the  transfer  takes  place  and  all 
rights  accrue  at  death  is  subject  to  two  exceptions. 

a.  BY  NATURE  OF  THE  TRANSFER. 

Where  there  is  a  trust  deed  reserving  a  life  estate  and 
a  tax  is  by  the  statute  imposed  upon  such  a  transfer  the 
law  in  force  at  the  date  of  the  trust  deed  governs. 

Matter  of  Keeney,  194  N.  Y.  281,  287;  87  N.  E.  428. 

Keeney  v.  New  York,  222  U.  S.  525,  530;  32  S.  Ct.  Rep.  105. 

Matter  of  Webber,  151  App.  Div.  539;  136  Supp.  83. 

State  ex  rel  Tozer  v.  Probate  Court,  102  Minn.  268 ;  113  N.  W.  888. 

Commonwealth  v.  McCauley's  Executor,  166  Ky.  450 ;  179  S.  W.  411. 

But  where  power  to  revoke  is  reserved  the  transfer  is 
not  complete  and  the  tax  accrues  at  death. 

Line's  Estate,  155  Pa.  St.  378;  26  A.  728. 

Matter  of  Dana,  164  App.  Div.  45;  149  Supp.  417;  aff.  214  N.  Y.  710. 

Where  there  is  a  transfer  in  contemplation  of  death  the 
tax  accrues  not  at  death,  but  at  the  date  of  such  transfer, 
even  though  no  proceedings  can  be  had  for  its  collection 
until  after  the  death  of  the  donor 

Matter  of  Hodges,  215  N.  Y.  447;  109  N.  E.  559. 

b.  BY  STATUTE. 

The  legislature  has  power  to  declare  that  the  tax  shall 
accrue  at  any  time  while  the  law  retains  control  of  a 
decedent 's  property  and  so  may  retroactively  be  applied  to 
estates  still  in  process  of  distribution,  though  the  owner 
died  prior  to  the  statute,  on  the  theory  that  the  tax  is  on 
the  right  to  receive  and  may  be  imposed  on  the  legatee's 
interest  at  any  time  before  he  actually  receives  the 
property. 

Cohen  v.  Brewster,  203  U.  S.  543;  27  S.  Ct.  Rep.  174. 
Ferry  v.  Campbell,  110  la.  290,  299;  81  N.  W.  604. 
Gelsthorpe  v.  Furnell,  20  Mont.  299 ;  51  Pac.  267. 
Matter  of  Vanderbilt,  50  App.  Div.  246;  63  Supp.  1079.    Aff.  163 
N.  Y.  597;  57  N.  E.  1127. 


PART!—  THE  TAX  33 

But  the  statute  must  be  explicit  and  no  such  retroactive 
effect  will  be  implied. 

Eury  v.  State,  72  Ohio  St.  448";  74  N.  E.  650. 

Nor  can  it  constitutionally  apply  to  a  remainder  interest 
when  the  life  tenant  has  received  the  property. 
Miller  v.  McLaughlin,  141  Mich.  425;  104  N.  W.  777. 
Matter  of  Pell,  171  N.  Y.  48;  63  N.  E.  789. 

Where  a  non-resident  died  prior  to  the  statute  but  his 
property  remained  in  the  state  and  still  undistributed, 
statute  held  not  retroactive. 

Matter  of  Pettit,  65  App.  Div.  30 ;  72.  Supp.  469.     Aff.  171  N.  Y. 
654;  63  N.  E.  1121. 

As  we  have  seen  statutes  may  also  allow  for  losses  or  tax 
gains  during  administration. 

C.— GENERAL  RULES  OP  CONSTRUCTION. 
1.  Strict  or  liberal. 

The  inheritance  tax  statutes  should  be  strictly  construed 
in  favor  of  the  tax  payer. 

People  v.  Griffith,  245  111.  532^92  N.  E.  313. 
Matter  of  Enston,  113  N.  Y.  174;  21  N.  E.  87. 
Eidman  v.  Martinez,  184  U.  S.  578;  22  S.  Ct.  Rep.  515. 
Matter  of  Fayerweather,  143  N.  Y.  114;  38  N.  E.  278. 
Estate  of  Ullmann,  263  111.  528;  105  N.  E.  292. 

But  whether  strict  or  liberal  the  construction  should  at 
least  be  fair  and  should  be  to  uphold  the  law  rather  than  to 
declare  it  unconstitutional. 

Knox  v.  Emerson,  123  Tenn.  409,  415;  131  S.  W.  972. 

And  should  uphold  the  tax  as  to  all  property  fairly  and 
reasonably  within  its  scope. 

State  v.  Scales  (N.  C.),  90  S.  E.  439. 

And  the  words  must  be  given  their  usual  and  ordinary 
meaning. 

McCluskey  v.  Cromwell,  11  N.  Y.  593. 
Matter  of  O'Neil,  91  X.  Y.  516. 
Matter  of  Daly,  79  Misc.  Rep.  586;  141  Supp.  199. 
2 


34  INHERITANCE  TAXATION 

A  construction  which  leads  to  an  absurdity  should  be 
avoided. 

Howard's  Estate,  80  Vt.  489 ;  68  A.  513. 

Effect  must  be  given  to  all  the  words  so  that  none  are 
construed  as  void  or  superfluous. 

Stevens  V.  Bradford,  185  Mass.  439;  70  N.  E.  425. 

And,  in  any  event,  the  constitutionality  of  an  act  cannot 
be  assailed  by  one  who  is  not  affected  adversely. 

Damon's  Estate,  10  Cal.  App.  542;  102  Pac.  684. 
Matter  of  Kenney,  194  N.  Y.  281;  87  N.  E.  428. 

Where  a  particular  subject  is  within  the  scope  of  the  law 
and  an  exemption  from  taxation  is  claimed  on  the  ground 
that  the  legislature  has  not  provided  proper  machinery  for 
accomplishing  the  legislative  purpose  in  a  particular 
instance  a  liberal  rather  than  a  strict  construction  should  be 
applied,  and  if  by  fair  and  reasonable  construction  of  its 
provisions  the  purpose  of  the  statute  can  be  carried  out,  that 
interpretation  ought  to  be  given  to  effectuate  the  legislative 
intent. 

Matter  of  Stewart,  131  N.  Y.  274,  282;  30  N.  E.  184. 
Matter  of  Hickock,  78  Vt.  259;  62  A.  724. 

And  a  statute  may  be  declared  void  in  part  and  yet  sus- 
tained as  to  the  rest,  if  severable. 

Union  Trust  Co.  v.  Durfee,  125  Mich.  487 ;  84  N.  W.  1101. 
Friend  v.  Levy,  76  Ohio  St.  26;  80  N.  E.  1036. 

2.  Exemptions. 

The  general  rnle  is  that  exemptions  should  be  strictly  con- 
strued against  the  exemption  and  in  favor  of  the  tax. 

Re  Bull,  153  Cal.  715;  96  Pac.  366. 

State  v.  AT.  Y,  Meeting  of  Friends,  61  N.  J.  Eq.  620;  48  A.  227. 

Pe  Gopsill,  77  N.  J.  Eq.  215;  77  A.  793. 


PAET!  —  THE  TAX  35 

The  exempting  clause  should  not  be  enlarged  at  the 
expense  of  the  enacting  clause. 
McDowell  v.  Addams,  51  Pa.  St.  438. 

All  grants  in  derogation  of  taxation  must  be  strictly 
construed. 

Packer's  Estate,  246  Pa.  St.  133;  92  A.  75. 

An  exemption  to  local  but  not  to  foreign  charities  is 
valid. 

Board  of  Education  v.  Illinois,  203  U.  S.  553;  27  S.  Ct.  Rep.  171. 

A  few  decisions  take  the  opposite  view.  It  is  held 
that  an  exemption  to  a  public  library  should  be  liberally 
construed. 

Curtis'  Estate,  88  Vt.  445;  92  A.  965. 

Matter  of  Moore,  66  Misc.  116;  122  Supp.  828. 

And  the  New  York  Appellate  Division  has  recently 
adopted  a  similar  view  in  regard  to  charitable  corpora- 
tions generally. 

Mutter  of  Rockefeller,  177  App.  Div.  786;  165  Supp.  154. 

But  the  U.  S.  Supreme  Court  holds  that  reasonable 
doubt  should  be  resolved  in  favor  of  the  taxing  power. 

*  *  Exemptions  from  taxation  are  not  favored  by  law,  and 
will  not  be  sustained  unless  such  clearly  appear  to  have 
been  the  intent  of  the  Legislature.  Public  policy  in  all  the 
States  has  almost  necessarily  exempted  from  the  scope  of 
the  taxing  power  large  amounts  of  property  used  for 
religious,  educational,  and  municipal  purposes;  but  this 
list  ought  not  to  be  extended  except  for  very  substantial 
reason;  and  while  as  we  have  held  in  many  cases  Legis- 
latures may,  in  the  interest  of  the  public,  contract  for  the 
exemption  of  other  property,  such  contract  should  receive 
a  strict  interpretation  and  every  reasonable  doubt  be 
resolved  in  favor  of  the  taxing  power." 

Tazoo  &  Miss.  V.  Ey.  Co.  v.  Adams,  180  U.  S.  1;  21  S.  Ct.  Rep.  240. 


36  INHERITANCE  TAXATION 

3.  Retroactive  or  Prospective. 

Statutes  are  construed  as  prospective  unless  declared 
specifically  to  be  retroactive. 

Gilberts™  v.  Bollard,  125  la.  420;  101  N.  W.  108. 
Lacy  v.  State  Treasurer,  152  la.  477;  132  N.  W.  843. 
Til  ford  v.  Dickinson,  79  N.  J.  L.  302;  75  A.  574. 
Provident  Hospital  v.  People,  198  111.  495;  64  N.  E.  1031. 
Lombard's  Appeal,  88  Me.  587;  34  A.  530. 
Matter  of  Miller,  110  N.  Y.  216;  18  N.  E.  139. 
Matter  of  Van  Kleeck,  121  N.  Y.  701;  25  N.  E.  50. 
Matter  of  Pettit,  65  App.  Div.  30;  72  Supp.  469.     Aff.  171  N.  Y. 
654;  63  N.  E.  1121. 

As  we  have  seen,  vested  rights  cannot  be  affected  retro- 
actively. 

Matter  of  MeKelway,  221  N.  Y.  15,  116  N.  E.  348. 

On  the  other  hand  no  one  has  a  vested  right  to  a  given 
form  of  procedure,  and  where  a  statute  failed  to  provide 
forr  due  notice  and  a  hearing  the  defect  can  be  cured 
retroactively.  Where  the  original  act  did  not  provide  for 
notice  of  appraisal  but  notice  was  provided  for  by  an 
amendment  which  was  given  a  retroactive  effect  the  court 
said:  "  There  was  no  valid  objection  to  the  levy  of  such 
a  tax.  That  is  to  say,  it  is  not  an  illegal  or  unauthorized 
tax.  It  is  invalid  simply  because  the  legislature  did  not 
provide  for  notice  of  the  proceedings  by  which  the  amount 
of  the  tax  is  to  be  ascertained." 

Ferry  v.  Campbell,  110  la.  290,  299;  81  N.  W.  604. 

And  it  is  held  that  a  repeal  of  the  statute  of  limitations 
may  be  construed  retroactively, 

Matter  of  Moenich,  39  Misc.  480;  80  Supp.  222. 

But  exemptions  will  not  be  so  construed. 

Matter  of  Eyan,  3  Supp.  136. 

Sherrill  v.  Christ  Church,  121  N.  Y.  701;  25  N.  E.  50. 


PAKT!  —  THE  TAX  37 

"  That  the  legislature  may  cure  such  defects  is  funda- 
mental. Appellant 's  counsel  say,  however,  that  the  estate 
vested  at  the  death  of  the  testator  and  that  any  change 
made  thereon  by  the  legislature  after  his  death  is  uncon- 
stitutional and  void.  As  to  the  real  estate  this  is  true, 
perhaps,  although  it  is  best  that  we  do  not  decide  the  point 
on  the  arguments  before  us.  As  to -the  personal  estate  the 
rule  seems  to  be  different  however.  While  the  distributive 
share  is  a  vested  interest, —  that  is,  vests  in  point  of  right 
at  the  time  of  the  death  of  the  intestate, —  yet  the  persons 
who  take  and  the  amount  to  be  received  must  be  ascer- 
tained and  determined  by  the  Probate  court.  So  long  as 
the  entire  estate  remains  unsettled  the  legislature  may 
cure  any  defects  in  the  law  creating  a  lien  thereon  and  the 
act  may  be  retroactive.'* 

"Where  the  distribution  is  delayed  by  the  provisions  of 
the  will  for  many  years  and  an  inheritance  tax  law  is 
enacted  in  the  meantime  the  shares  of  the  heirs  at  law  are 
subject  to  said  tax. 

Hostetter  v.  State,  26  Ohio  Circuit,  702. 

4.  .Notice  and  a  Hearing  Essential. 
A  statute  that  does  not  provide  -for  it  is  unconstitutional. 

Mutter  of  McPherson,104  N.  Y.  306;  10  N.  E.  685. 
'Ferry  v.  Campbell,  110  la.  290;  81  N.  W.  604. 

Where  the  act  provides  for,  a  review  of  all  matters  before 
the  Probate  court  and  also  for  an  appeal,  there  is  a  "  day 
in  court  "  for  all  who  consider  themselves  aggrieved  and 
an  act  which  does  not  provide  for  a  notice  of  appraisal  but 
gives  these  remedies  is  constitutional. 

Hostetter  v.  State,  26  Ohio  Circuit,  702. 

Union  Trust  Co.  v.  Probate  Judge,  125  Mich.  487 ;  84  N.  W.  1101. 


38  INHERITANCE  TAXATION 

5.  Copied  or  Adopted  Statutes. 

When  a  statute  is  copied  or  adopted  from  another  state 
the  construction  put  upon  it  by  courts  of  that  state  is  also 
adopted. 

People  V.  Carpenter,  264  111.  400 ;  106  N.  E.  302. 
Mann  v.  Carter,  74  N.  H.  345;  68  A.  130. 
Neilson  V.  Russell,  76  N.  J.  L.  655;  71  A.  286. 
Black  v.  State,  113  Wis.  205;  89  N.  W.  522. 
Miller  v.  McLaughlin,  141  Mich.  425;  104  N.  W.  777. 

In  view  of  the  general  similarity  of  the  statutes  and 
the  frequency  with  which  they  are  adopted  or  copied  this 
rule  is  of  wide  application  and  of  manifest  importance. 

6.  Practical  Construction. 

Where  the  language  of  the  act  is  doubtful  and  a  prac- 
tical construction  has  been  given  it  by  the  collection 
officers  and  has  long  been  acquiesced  in  the  courts  will 
recognize  it;  but  only  under  these  circumstances. 

"It  is  immaterial  what  the  practice  of  the  administra- 
tive officers  of  the  Commonwealth  charged  with  the  duty 
of  collecting  legacy  and  succession  taxes  may  have  been 
in  regard  to  considering  property  within  and  without  the 
Commonwealth.  It  is  only  when  a  statute  is  of  doubtful 
import  and  the  practice  has  been  long  continued  and 
acquiesced  in  by  all  parties  interested  that  it  can  be  resorted 
to  in  aid  of  the  construction  of  the  statute.  In  the  present 
case  we  discover  no  such  ambiguity  in  the  meaning  of  the 
statute  as  to  justify  as  an  aid  to  construction  a  resort  to 
the  practice  of  the  officers  charged  with  its  execution,  even 
if  we  assume  that  the  practice  had  been  sufficiently  long 
continued  to  render  it  otherwise  admissible." 

Attorney-General  v.  Barney,  211  Mass.  134;  97  N.  E.  750. 


PART  I  —  THE  TAX  39 

D.—  CONFLICT  OF  LAWS. 

1.  Jurisdiction. 

Adjudications  as  to  residence  or  domicile  though  essen- 
tial to  the  jurisdiction  of  one  state  are  not  binding  on 
courts  of  another  state  and  are  there  open  to  collateral 
attack. 

Matter  of  Horton,  217  N.  Y.  363;  111  N.  E.  1066. 
Tilt  v.  Kelsey,  207  U.  S.  43;  28  S.  Ct.  Rep.  1. 

2.  Full  Faith  and  Credit. 

When  after  publication  for   claims   a  final  decree  is 

entered  it  is  a  bar  to  a  proceeding  in  another  state  for  the 

collection  of  a  transfer  tax  providing  the   court  which 

entered  such  a  decree  had  jurisdiction  to  probate  the  will. 

Tilt  v.  Kelsey,  207  U.  S.  43;  28  S.  Ct.  Rep.  1. 

So  it  was  held  in  Washington  that  when  "  a  resident  of 
the  state  of  Maine  died,  leaving  estate  there  and  in  this 
state,  and  his  will  was  probated  there,  and  all  legacies  to 
collateral  heirs  and  strangers  to  the  blood  and  all  debts 
were,  by  order  of  the  probate  court  in  Maine  paid  out  of 
the  estate  situated  in  that  state,  leaving  the  property  in 
this  state  to  be  divided  between  his  widow  and  son  under 
the  residuary  clause  in  the  will,  the  estate  in  the  state  of 
Washington  is  not  chargeable  with  the  increased  inherit- 
ance tax  upon  legacies  to  collateral  heirs  and  strangers 
to  the  blood  at  the  rate  of  3  and  6  per  cent. ;  since  comity 
requires  that  full  faith  and  credit  be  given  to  the  proceed- 
ings in  the  probate  court  in  Maine,  ordering  those  legacies 
to  be  paid  out  of  the  estate  within  its  jurisdiction  and 
under  its  control,  and  such  order  is  conclusive  on  the 
courts  of  this  state;  and  since  the  inheritance  tax  is  to  be 
deducted  from  the  legacies  and  paid  by  the  legatees,  and 
the  executor  in  this  state  has  no  opportunity  to  collect  the 
same  from  the  legatees  chargeable  therewith.' 
In  re  Clark's  Estate,  37  Wash.  671;  80  Pac.  267. 


40  INHERITANCE  TAXATION 

3.  Proof  of  Foreign  Laws. 

These  must  be  established  like  any  other  fact  by  proper 
evidence. 

Matter  of  Cummings,  142  App.  Div.  377;  127  Supp.  109. 

A  duly  authenticated  affidavit  by  an  attorney  of  the 
foreign  state  is  competent. 

Matter  of  Vivianti,.2Q6  N.  Y.  656.     (See  Table  of  Cases.) 
Tilt  v.  Kelsey,  207  U.  S.  43;  28  S.  Ct.  Rep.  1. 

4.  As  to  Sister  States. 

The  inheritance  tax  statutes  cannot  discriminate  in 
favor  of  their  own  residents  as  against  residents  in 
another  state. 

Johnson's  Estate,  139  Cal.  532;  73  Pac.  424. 

In  this  case  there  were  two  appeals,  one  taken  by  resi- 
dent .nieces  and  nephews  and  the  other  by  non-resident 
nieces  and  nephews,  citizens  of  sister  states,  from  an  order 
assessing  inheritance  tax  against  them,  on  'the  grounds 
that  the  Statutes  of  1897,  page  77,  contained  an  amend- 
ment exempting  "  nieces  or  nephews  when  a  resident  of 
this  State  "  and  that  the  effect  of  this  amendment  is  to 
relieve  not  only  nieces  and  nephews,  resident  of  this  state, 
but  also  nieces  and  nephews  resident  of  other  states  of  the 
Union,  and  the  Supreme  >  Court  so  >held. 

The, Estate  of  Malioney,  133 -Gal.  180,  65  Pac.  389,  was 
reversed,  and  the  amendment  exempting  nieces  and 
nephews  resident  of  this  state  held  to  be  constitutional 
and  not  in  violation  of  section  2  of  article  IV  of  the  Con- 
stitution of  the  United  States,  nor  of  section  1978  of  the 
Revised  Statutes  of  the  United  States;  and  that  said  sec- 
tion of  the  Constitution  declaring  that  "  the  citizens  of 
each  state  shall  be  entitled  to  all  the  privileges  and  immu- 
nities of  the  citizens  of  the  several  states  ' '  does  not  strike 


PART!  — THE  TAX  41 

down  or  limit  the  right  of  a  state  to  confer  such  immuni- 
ties and  privileges  upon  its  own  citizens ;  that  the  clause 
of  the  Constitution  is  -protective  merely  and  not  destruc- 
tive nor  even  restrictive. 

' '  It  nowhere  intimates  that  an  immunity  conferred  upon 
citizens  of  a  state,  because  not  in  terms  conferred  upon 
citizens  of  sister  states,  shall  therefore  be  void." 

"  It  leaves  to  the  state  perfect  freedom  to  grant  such 
privileges  to  its  citizens  as  it  may  see  fit,  but  secures  to 
the  citizens  of  all  other  states,  by  virtue  of  the  constitu- 
tional enactment  itself,  the  same  rights,  privileges,  and 
immunities. ' ' 

"  It  is  a  canon  of  construction  that  an  act  of  the  legis- 
lature will  yield  to  the  constitution  so  far  as  necessary, 
but  no  further.  The  constitutional  immunity  goes  only  to 
citizens  of  sister  states,  and  there  is  a  clear  distinction 
thus  recognized  between  citizens  of  the  states  and  citizens 
of  the  United  States  who  are  not  citizens  of  any  state,  as 
well  as  citizens  of  alien  states.  By  virtue  of  the  constitu- 
tion of  the  United  States,  the  immunity  which  the  legis- 
lature by  the  amendment  of  1897  conferred  upon  citizens 
of  this  State  is  extended  to  citizens  of  sister  states,  -but 
the  immunity  goes  no  further.  Citizens  of  territories,  of 
the  District  of  Columbia,  and  of  our  new  possessions,  as 
well  as  aliens,  are  not  exempted,  and  their  property  is 
thus  liable  for  the  tax." 

5.  /As  Against  Aliens  Protected  by  Treaties. 

Several  of  the  states  have  undertaken  to  discriminate 
in  their  rates  or  exemptions  against  alien  non-residents. 
Where  the  interests  of  aliens  are  protected  by  treaties 
such  discriminations  have  been  held  void. 

Adams  v.  ATcelund,  168  111.  632,  48  N.  E.  454. 
Matter  of  Stixrud,  58  Wash.  339;  109  Pac.  343. 
McKeown  v.  Brown,  167  la.  489;  149  N.  W.  593. 
Matter  of  Strobel,  39  Supp.  169;  aff.  5  App.  Div.  621. 


42  INHERITANCE  TAXATION 

And    a    treaty    containing    a    "  most    favored    nation 
clause  "  affords  this  protection,  thus  practically  nullify- 
ing such  statutes,  as  practically  all  treaties  so  provide. 
Brown  v.  Daly,  172  la.  379;  154  N.  W.  602. 

But  a  treaty  negotiated  subsequent  to  the  statute  can- 
not affect  the  state's  right  to  its  tax. 

Prevost  v.  Greneaux,  60  U.  S.  1;  19  How.  1. 
Succession  of  Schaffer,  13  La.  Ann.  113. 

The  attempt  of  the  Federal  Statute  to  discriminate 
against  alien  non-residents  in  the  matter  of  exemptions 
will  soon  bring  the  subject  again  before  the  courts. 

On  the  other  hand,  while  aliens  cannot  be  discriminated 
against  in  violation  of  a  treaty  they  are  no  better  off  than 
citizens  and  must  pay  succession  taxes  at  the  same  rate. 
Matter  of  Strobel,  39  Supp.  169;  aff.  5  App.  Div.  621. 

6.  Reciprocal  Provisions. 

Minnesota  in  1911  exempted  non-resident  transfers  when 
the  laws  of  the  state  of  domicile  "  exempt  or  do  not 
impose  a  tax  upon  transfers  of  personal  property  of  resi- 
dents of  Minnesota  having  its  situs  in  such  state."  A 
state  which  imposes  such  a  tax  upon  the  personal  prop- 
erty of  collaterals  and  strangers  only  does  not  come  within 
the  provision.  This  provision  has  since  been  repealed. 
Graff  v.  Probate  Court,  128  Minn.  371;  150  N.  W.  1094. 

Under  "  reciprocal  "  statute  of  Massachusetts  property 
of  a  resident  of  New  York  in  that  state  pays  only  so  much 
tax  as  is  in  excess  of  the  tax  imposed  in  New  York. 
Bliss  v.  Bliss,  221  Mass.  201;  109  N.  E.  148. 


PART  II -THE  TRANSFER 


A.  Transfers  by  Will. 

1.  Testamentary  Provisions  which  may  Affect  the  Tax. 

a.  What   a    Testator    Cannot   Do. 

b.  What  He  Can  Do. 

2.  Transfers  Pursuant  to  Agreements  to  Make  a  Will. 

a.  Where  the  Agreement  is  Violated. 

b.  Where  the  Agreement  is  Performed. 

3.  Compromise  Agreements  between  Heirs  and  Devisees. 

4.  Payment  of  Debt  by  Will. 

5.  As  Affected  by  Statute. 

B.  Transfers  by  Intestate  Law. 

1.  As   to   Real   Estate. 

2.  As  to  Personal  Property. 

3.  Advancements. 

4.  Resume  of  the  Intestate  Laws  of  the  Several  States. 

a.  Rights  of  a  Surviving  Husband. 

b.  Where  there  is  no  Husband,  Widow,  Children  or  Descend- 

ants. 

c.  Where  Both  Parents  are  Dead,  Leaving  Issue. 

d.  Where  a  Widow  and  Issue  or  Descendants  Survive. 

e.  If  there  is  a  Widow  or  Husband  but  no  Children  or  De- 

scendants. 

C.  Gifts. 

1.  Inter  Vivos. 

a.  Burden  of  Proof  is  on  the  Donee. 

b.  There  must  be  a  Present  Intent  to  Give. 

c.  There  must  be  Delivery  of  the  Thing  Given. 

d.  Delivery  to  an  Agent. 

(1)  To  Agent  of  Donor. 

(2)  To  Agent  of  Donee. 

e.  Symbolical  Delivery. 

f.  Redelivery  by  Donee  to  Donor. 

g.  Power  of  Revocation. 

h.  Stock  Transfer  Stamps, 
i.  Consideration. 

2.  Gifts  Causa  Mortis. 

3.  Gifts  in  Contemplation  of  Death. 

a.  Nature   of   the    Contemplation. 

b.  Advanced  Age  alone  Insufficient. 

c.  Statutory  Time  Limit. 

d.  Tax  Accrues  at  Date  of  Gift. 

[43] 


44  INHERITANCE  TAXATION 

C.  Gifts  —  Continued. 

4.  Gifts  take  Effect  in  Possession  or  Enjoyment  at  or  after  Death. 

a.  Trust  Deed  Reserving  Income  to  Donor. 

b.  Where  Part  of  the  Income  is  Reserved. 

c.  Where  the  Life  Use  is  Waived. 

d.  Reservation  of  Power  to  Revoke. 

D.  Consideration  as  Affecting  Testamentary  Transfers. 

1.  Where  the  Transaction  is  Completed  Inter  Vivos. 

2.  Where  the  Contract  is  Executory. 

3.  The  Consideration  must  be  Adequate. 

4.  Burden  of  Proof. 

E.  Power  of  Appointment. 

1.  The  Common  Law  Rule. 

2.  The  Statutory  Rule. 

3.  The  New  York  Rule. 

4.  The  Massachusetts  Rule. 

5.  Development  of  the  New  York. 

6.  Construction  of  Wills. 

7.  Questions  of  Residence. 

F.  Common  Law  Transfers. 

1.  Dower. 

2.  Tenancy  by  the  Curtesy. 

3.  Marital  Right. 

4.  Tenancies  by  the  Entirety. 

a.  Not  Taxable  as  an  Inheritance. 

b.  Nature  of  the  Estate. 

c.  Change  in  Rights  at  Death. 

d.  How  Created. 

e.  How  Terminated. 

f.  Effect  of  Statute. 

5.  Joint  Tenancies. 

a.  Intent  of  the  Parties  Governs. 

b.  Survivorship  not  Taxable. 

c.  Where  Succession  is  Specifically  Taxed. 

d.  Construction  of  the   Statute. 

6.  Escheat. 

G.  Civil  Law  Transfers. 

1.  Taxable. 

2.  Not  Taxable. 

3.  Gains  Acquired  in  Foreign   Country  Exempt. 

4.  Gains  Acquired  in  this  Country  Taxable. 


PART  II— THE  TRANSFER 


A.— TRANSFERS  BY  WILL. 
1.  Testamentary  Provisions  Which  May  Affect  the  Tax. 

The  provisions  of  the  will  necessarily  affect  the  transfer 
under  it  and  some  of  the  most  complex  problems  of 
inheritance  taxation  arise  from  the  construction  of  wills. 
Most  of  the  states  have  statutes  prohibiting  the  suspen- 
sion of  the  power  of  alienation  of  real  estate  and  the  abso- 
lute ownership  of  personal  property  and  other  restric- 
tions upon  the  power  of  testators  in  the  creation  of  future 
and  artificial  estates  but  this  subject  is  beyond,  the  scope 
of  this  work. 

a.    WHAT  A  TESTATOR  CANNOT  Do. 

He  may  not  direct  that  no  inventory  of  his  estate  be 
made  or  filed  with  the  court,  for  he  cannot  nullify  the  law. 
Matter  of  Morris,  138  N.  C.  259;  50  S.  E.  682. 

He  cannot  change  real  estate  into  personal  property  by 
the  direction  for  its  sale  (except  in  Pennsylvania). 

Connell  v.  Crosby,  210  HI.  380;  71  N.  E.  350. 
McCurdy  v.  McCurdy,  197  Mass.  248;  83  N.  E.  88L 
Matter  of  Mills,  86  App.  Div.  555;  67  Supp.  956;  84  Supp.  1135; 
aff.  177  N.  Y.  562;  69  N.  E.  1127. 

He  cannot  avoid  the  tax  by  large  bequests  to  executors 
in  lieu  of  commissions,  as  this  is  forbidden  by  all  the 
statutes. 

People  v.  Bauder,  271  111.  446;  111  N.  E.  598. 

He  may  not  declare  that  the  tax  shall  be  charged  as  an 
expense  of  administration,  and  thus  have  the  tax  deducted 
from  the  amount  of  the  estate  that  was  taxable. 

Matter  of  Swift,  137  N".  Y.  77;  32  N.  E.  1096. 

[45] 


46  INHERITANCE  TAXATION 

On  this  subject  the  Court  said,  in  the  Swift  case: 
"  Another  question,  which  I  shall  merely  advert  to  in 
conclusion,  arises  upon  a  ruling  of  the  surrogate  with 
respect  to  appraisement,  in  connection  with  a  clause  of  the 
will  directing  that  the  amount  of  the  tax  upon  the  legacies 
and  devises  should  be  paid  as  an  expense  of  administra- 
tion. The  appraiser,  in  ascertaining  the  value  of  the 
residuary  estate  for  the  purpose  of  taxation,  deducted  the 
amount  of  the  tax  to  be  assessed  on  prior  legacies.  The 
surrogate  overruled  him  in  this,  and  held  that  there  should 
be  no  deduction  from  the  value  of  the  residuary  estate  of 
the  amount  of  the  tax  to  be  assessed,  either  upon  prior 
legacies,  or  upon  its  value.  He  held  that  the  legacies 
taxable  should  be  reported,  irrespective  of  the  provision 
of  the  will ;  and  that  a  mode  of  payment  of  the  succession 
tax  prescribed  by  will  is  something  with  wThich  the  statute 
is  not  concerned.  I  am  satisfied  with  his  reasoning  and 
can  add  nothing  to  its  force.  Manifestly,  under  the  law 
that  which  is  to  be  reported  by  the  appraiser  for  the 
purpose  of  the  tax  is  the  value  of  the  interest  passing  to 
the  legatee  under  the  will,  without  any  deduction  for  any 
purpose,  or  under  any  testamentary  direction." 

b.      WHAT  HE  CAN  Do. 

There  are  a  number  of  things  that  a  testator  can  do, 
however,  to  lessen  or  avoid  the  tax  by  the  provisions  of  his 
will. 

The  most  obvious  is  to  cut  up  his  estate  into  numerous 
legacies  so  small  that  they  will  be  within  the  exemption, 
or  pay  the  smallest  percentage  under  the  graded  rates. 

He  can  also  leave  his  property  to  an  exempt  charitable 
corporation  which  might  be  induced  to  make  a  "  settle- 
ment "  with  his  heirs.    Of  course  in  practice  such  a  thing 
would  never  be  done,  but  the  possibility  remains. 
Matter  of  Murray,  92  Misc.  100;  155  Supp.  185. 


PAET  II  —  THE  TRANSFER  47 

He  may  direct  in  his  will  from  what  fund  the  tax  is  to 
be  paid. 

Matter  of  Smith,  80  Misc.  140;  141  Supp.  798. 

2.  Transfers  Pursuant  to  Agreement  to  Make  a  Will, 
a.     WHERE  THE  AGREEMENT  is  VIOLATED. 

It  frequently  happens  that  men  agree  by  valid  contract 
upon  consideration  to  make  a  will  in  favor  of  the  bene- 
ficiary who  performs  the  services  or  gives  other  con- 
sideration. It  also  occurs  that  the  agreement  is  violated. 
In  such  a  case  the  court  enforces  the  agreement  and  deems 
the  transfer  to  take  place  as  under  the  will  which  should 
have  been  made. 

This  is  well  illustrated  in  Matter  of  Kidd,  188  N.  Y.  274; 
80  N.  E.  924.  In  this  case  decedent,  some  years  prior  to 
his  death,  made  an  ante-nuptial  agreement  with  the  woman 
whom  he  subsequently  married  whereby,  in  consideration 
of  their  marriage,  and  the  promise  of  the  woman  to  turn 
over  to  him  the  sum  of  $40,000,  to  be  used  in  his  business, 
he  agreed  that  he  would  adopt  the  daughter  of  the  woman, 
give  her  his  name  and  make  her  his  heir.  He  left  a  will 
disposing  of  an  estate  of  more  than  $800,000  but  did  not 
leave  it  to  the  daughter,  as  he  had  agreed.  The  daughter 
brought  an  action  setting  forth  these  facts  and  obtained  a 
judgment  which  declared  that  the  contract  was  a  valid 
contract,  entitling  the  plaintiff  to  all  the  property,  real 
and  personal,  of  which  the  deceased  died  seized  or  pos- 
sessed, and  directing  the  executors  to  execute  and  deliver 
to  her  all  the  necessary  releases  and  conveyances  of  said 
property.  Under  these  circumstances  the  court  held  that 
the  transfer  was  pursuant  to  will  and  that  the  beneficiary 
of  the  agreement  thus  enforced  must  pay  the  transfer  tax. 

The  theory  upon  which  such  agreements  are  sustained 
was  stated  by  Judge  Werner  in  Phalen  v.  U.  S.  Trust  Co. 
186  N.  Y.  178;  78  N.  E.  943  as  follows: 


"  The  principles  upon  which  such  agreements -are  sus- 
tained was  stated  by  Lord  Camden  as  early  as  the  year 
1769  in  Durfour  v.  Ferraro  (Hargraves  Jurid,  Arg,,  304), 
and  it  was  not  then  new  :  :  *  Though  a  will  is  always 
revokable  and  the  last  must  always  be  the  testator's  will, 
yet  a  man  may  so  bind  his  assets  by  agreement  that  his 
will  shall  be  a  trustee  for  the  performance  of  the  agree- 
ment. A  covenant  to  leave  so  much  to  his  wife  or  daughter, 
etc.  *  These  cases  are  common  and  there  is  no  dif- 

ference between  promising  to  make  a  will  in  such  a  form 
and  making  his  will  with  a  promise  not  to  revoke.  This 
Court  does  not  set  aside  the  will  but  makes  the  devisee, 
heir  or  executor,  trustee  to  perform  the  contract.' 

A  will  is  admissible  to  probate  notwithstanding  it  indi- 
cates some  contract  obligation  of  binding  force  on  the 
testator's  part.  For,  at  all  events,  one  may  by  his  will 
appoint  the  executor  to  administer  the  estate;  and,  more 
than  this,  the  probate  of  a  will  as  to  one 's  property  merely 
concludes  that  the  will  is  valid  to  pass  any  estate  which 
the  testator  had  power  to  devise  or,  bequeath,  and  not  that 
there  was  power  to  devise  or  bequeath  as  the  will  seeks 
to  direct.  Controversies  of  the  latter  sort  are  on  the 
other  hand  to  be  settled  by  proper  and  separate  proceed- 
ings in  law  or  equity. 

Schouler  on  Wills,  Executors  and  Administrators,  5th  ed.,  $  452-a, 

But  where  a  man  made  a  deed  to  his  wife  on  her  promise 
to  devise  the  property  to  him  and  she  failed  to  do  so  his 
agreement  was  enforced  by  suit.    Held  not  taxable. 
Nelson  v.  Schoonover,  89  Kan.  779 ;  132.  Pae.  1183. 

This  case  would  seem  against  the  weight  of  authority. 

b.    WHERE  THE  AGREEMENT  is  PERFORMED. 

Transfers  by  will  even  though  pursuant  to  agreement 
have  always  been  held  taxable.  So,  where  a  husband 


PART  II  —  THE  TRANSFER  49 

bought  real  estate  and  conveyed  the  same  to  his  wife  by 
deed,  upon  her  promise  to  devise  the  same  to  him  by  will, 
which  she  did,  held, —  taxable. 

Eansom  v.  United  States,  70  Fed.  Cas.  No.  11,574. 

A  more  difficult  problem  arises  under  mutual  wills. 
These,  in  the  absence  of  contract,  are  revokable  without 
notice. 

Edson  v.  Parsons,  85  Hun,  263;  32  Supp.  1036;  aff.,  155  N.  Y.  555; 

50  N.  E.  265. 
Middleworth  v.  Ordway,  191  N.  Y.  404;  84  N.  E.  291. 

But  where  there  is  a  contract  and  that  contract  provides 
that  the  survivor  shall  have  certain  rights  in  the  estate  of 
the  deceased,  and  the  agreement  is  upon  good  considera- 
tion, the  question  has  arisen  whether  the  provisions  of  the 
mutual  wills  make  the  transfer  taxable.  The  authorities 
are  that  it  does. 

In  the  Matter  of  Cory,  177  App.  Div.  781 ;  164  Supp.  956, 
two  brothers  agreed  that  the  survivor  might  buy  certain 
securities  from  the  estate  of  the  deceased  brother  at  a 
fixed  price  and  the  surviving  brother  claimed  that  the 
assets  he  thus  acquired  should  be  appraised  at  the  price 
fixed  by  the  will.  The  court  said : 

"  The  result  would  have  been,  and  in  fact  was,  so  far 
as  the  State  is  concerned,  that  by  the  contract  and  will 
read  together  John  M.  Cory  received  in  possession  and 
enjoyment  after  his  brother's  death  stock  worth  upwards 
of  $100,000.  In  other  words,  for  the  purpose  of  distribu- 
tion the  testator  might  put  any  arbitrary  value  he  chose 
upon  the  stock,  but  for  the  purpose  of  assessment  for 
taxation  under  the  Transfer  Tax  Law,  the  stock  is  to  be 
appraised  at  its  real  value,  and  it  is  unimportant  under 
the  Statute  that  the  sale  of  the  stock  to  John  M.  Cory  at 
the  arbitrary  valuation  was  provided  for  by  an  ante- 
mortem  bargain  or  contract,  since  the  transfer  by  virtue 
of  that  contract  was  clearly  *  intended  to  take  effect  in 
possession  or  enjoyment  at  or  after  '  the  brother's  death. 


50  INHERITANCE  TAXATION 

To  apply  any  other  rule  to  a  case  like  the  present  would 
open  the  door  to  unlimited  devices  to  avoid  the  payment 
of  transfer  taxes.  My  conclusion  is  that  the  stock  in 
question  should  be  appraised  for  the  purpose  of  the  trans- 
fer tax  at  its  fair  market  value  at  the  time  of  the  testator's 
death." 

In  Matter  of  Burgheimer,  91  Misc.,  468,  154  Supp.  943, 
decedent  had  orally  agreed  with  his  partner  that  on  the 
death  of  either  the  survivor  should  take  the  decedent 's 
interest  in  the  good  will  of  the  firm;  and  that  each  should 
make  a  will  containing  this  provision.  Surrogate  Fowler 
held  that  the  good  will  was  taxable  notwithstanding,  and 
remitted  the  report  for  determination  of  the  value  thereof. 
He  says: 

il  An  agreement  between  parties  as  to  the  devolution  of 
the  good  will  of  their  business  on  the  death  of  either  does 
not  prove  that  there  was  no  good  will.  Nor  does  it  per- 
haps bind  the  State  not  a  party  to  the  undertaking.  * 
Undoubtedly  the  decedent  died  owning  an  interest  in  the 
good  will  and  firm  name  of  the  co-partners.  Consequently 
the  good  will  formed  a  part  of  his  estate  as  an  asset.  I 
fail  to  find  a  precedent  by  which  the  testator  through  the 
operation  of  his  last  will  and  testament  would  be  able  to 
reduce  to  nothingness  a  substantial  asset  of  his  estate  and 
thus  escape  its  proper  taxation.  I  have  examined  the 
authorities  submitted  by  the  respondent  and  do  not  think 
that  they  determine  a  legal  finding  different  from  that 
which  I  have  expressed." 

3.  Compromise  Agreements  Between  Heirs  and  Devisees. 

The  weight  of  authority  holds  that  when  the  will  is 
admitted  to  probate  the  tax  must  be  paid  under  its  pro- 
visions without  reference  to  any  subsequent  arrangement 
among  the  heirs  or  devisees,  as  they  take  by  contract  and 
not  under  the  will  nor  from  the  testator. 

Greenwood  v.  Holbrook,  111  N.  Y.  465;  18  N.  E.  711. 


PART  II  —  THE  TRANSFER  51 

In  Matter  of  Cook,  187  N.  Y.  253;  79  N.  E.  991  it  was 
held  that  legacies  to  nephews  and  nieces,  assigned  by  them 
to  testator's  widow,  for  valuable  consideration,  and  in 
settlement  of  a  contest  of  the  will  instituted  by  her,  pass, 
not  under  the  will,  but  by  virtue  of  the  assignment  to  the 
widow  who  takes  as  assignee  and  not  as  legatee  and  they 
were  therefore  taxable  at  5  per  cent.,  not  1  per  cent. 

As  we  have  already  seen,  had  the  nephews  and  nieces 
renounced  their  legacies  instead  of  assigning  them  and 
the  legacies  had  then  passed  to  the  widow  under  a 
residuary  clause  of  the  will  the  result  would  have  been 
the  reverse. 

Matter  of  Wolfe,  89  App.  Div.  349;  85  Supp.  949;  aff.,  179  N.  Y. 

599;  72  N.  E.  1152. 
Estate  of  Stone,  132  la.  136;  109  N.  W.  455. 

So  where  heirs  contested  a  will  which  left  a  large  estate 
to  exempt  charitable  corporations  who  paid  the  heirs  one- 
third  to  withdraw  contest  the  bequests  were  exempted  and 
the  heirs  took  nothing  under  the  will  it  being  no  concern 
of  the  state  what  they  received  under  the  compromise 
agreement. 

Matter  of  Murray,  92  Misc.  100 ;  155  Supp.  185. 

An  heir  threatened  contest  because  disinherited  and  a 
sum  was  paid  her  in  compromise.  It  was  held  taxable 
against  the  residuary  legatees  and  not  against  the  dis- 
inherited heir.  The  court  said:  "  The  whole  of  the 
residuary  estate  vested  at  the  instant  of  his  death,  in  the 
residuary  legatees.  The  inheritance  tax  was  then  due 
and  payable.  The  beneficial  interest  then  passed  to  the 
legatees  and  their  succession  gave  rise  to  the  tax.  Sub- 
sequent events  did  not  affect  it.  (In  re  Cook,  187  N.  Y. 
253;  79  N.  E.  991.)  The  contrary  view  is  held  by  the 
Supreme  Court  of  Pennsylvania,  but  we  cannot  assent  to 
the  reasoning  or  the  conclusion  in  those  cases." 
Estate  of  Graves,  242  111.  212;  89  N.  E.  978. 


52  INHERITANCE  TAXATION 

Beneficiaries  under  an  earlier  will  permitted  a  later  will 
to  be  probated  under  a  compromise  agreement.  Held  that 
upon  the  probate  of  the  will  the  entire  estate  vested  in 
the  devisees  and  the  amounts  received  by  contestants  not 
being  paid  pursuant  to  the  will  were  not  subject  to  tax. 
Estate  of  Wells,  142  la.  255;  120  N.  W.  713. 

A  testator  devised  entire  estate  to  widow.  Collateral 
heirs  contested  but  withdrew  contest  on  payment  to  them 
of  one-half  of  the  property  by  the  widow.  Held  that  no 
tax  was  due  from  the  collateral  heirs. 

English  v.  Crenshaw,  120  Tenn.  531;  110  S.  W.  210. 

Heirs  agreed  to  convey  a  portion  of  devised  real  estate 
in  settlement  of  a  claim  of  one  of  them.  Held  that  the 
tax  must  be  paid  on  the  entire  realty. 

Estate  of  Sanford,  90  Neb.  410;  133  N.  W.  870. 

Where  heirs  under  a  compromise  agreement  changed 
the  distribution  as  made  by  the  will  the  tax  should  be 
assessed  as  if  the  property  passed  as  directed  by  the  will 
and  not  as  it  did  under  the  agreement. 
Batt  v.  Treasurer,  209  Mass.  459;  95  N.  E.  854. 

In  the  Batt  case  the  court  said : 

''It  is  important  that  in  the  assessment  of  this  tax 
there  should  be  a  plain,  simple  rule.  The  property  upon 
which  the  tax  is  to  be  assessed  is  that  which  passes  by  will 
or  by  the  laws  regulating  intestate  succession.  When 
there  is  a  will,  whether  or  not  it  disposes  of  the  whole 
estate  of  the  testator,  whatever  does  pass  by  it  passes 
to  the  legatees  therein  named,  and  by  force  of  the  will 
passes  to  no  other  person. 

11  In  view  of  the  nature  and  office  of  the  compromise 
statute,  and  of  the  language  of  the  tax  statute,  the  most 
reasonable  interpretation  of  the  phrase  t  which  shall  pass 
by  will  '  in  the  tax  statute  is  that  it  describes  only  property 
that  passes  by  the  terms  of  the  will  as  written  and  not  as 


PAET  II  —  THE  TRANSFER  53 

changed  by  any  agreement  for  compromise  made  within 
or  without  the  statute.  Any  other  interpretation  would 
make  the  amount  to  be  assessed  hinge  on  the  manner  in 
which  the  agreement  was  to  be  carried  out.  In  the  case 
before  us  there  can  be  no  doubt  if  the  will  had  been 
admitted  to  probate  without  a  record  of  the  agreement 
the  tax  would  have  been  assessed  in  accordance  with  the 
terms  of  the  will,  although  the  agreement  as  to  the  division 
of  the  estate  would  have  been  perfectly  valid.  For  reasons 
hereinbefore  stated  the  amount  of  the  tax  is  not  changed 
by  the  fact  that  the  agreement  was  approved  by  the  court 
and  made  a  part  of  the  decree." 

Where  a  testator  by  his  will  leaves  one-half  of  his  prop- 
erty to  his  wife  and  the  other  half  to  his  sons  and 
daughters,  and  the  estate  is  all  community  property,  and 
there  is  nothing  in  the  will  to  indicate  an  intention  to  make 
the  testamentary  gift  to  the  widow  stand  in  lieu  of  her 
community  interest,  she  takes  three-fourths  of  the  entire 
community  property  and  is  chargeable  with  inheritance 
tax  on  such  three-fourths,  notwithstanding  the  filing  of  a 
"  waiver  "  of  her  rights  to  anything  over  one-half  of  the 
estate.  The  right  of  the  state  to  an  inheritance  tax,  based 
upon  three-fourths  of  the  estate,  vested  upon  the  death  of 
the  testator,  and  could  not  be  affected  by  any  subsequent 
arrangement  that  might  be  made  by  the  heirs. 
Estate  of  Bossi,  49  Cal.  Dec.  60. 

The  amount  passing  to  legatees  under  a  will  and  not 
what  they  actually  receive  under  a  compromise  agreement 
is  to  be  assessed  as  the  "  fair  market  value  "  of  their 
legacy. 

Matter  of  Stockwell,  158  Supp.  320. 

So  it  was  recently  held  that  an  amount  paid  from 
legacies  to  secure  the  withdrawal  of  a  contest  of  the  will 
was  not  allowable  as  a  deduction. 

Matter  of  Reed,  98  Misc.  102;  162  Supp.  412. 


54  INHERITANCE  TAXATION 

Where  there  was  a  void  clause  in  a  will  creating  a  trust 
the  heirs  agreed  to  cure  the  defect  and  the  property  went 
to  the  trustees;  but  the  court  held  that  there  was  in  fact 
an  intestacy  as  to  the  trust  funds  and  that  the  tax  must  be 
assessed  against  the  beneficiaries  who  would  take  under 
intestacy  and  not  as  the  property  subsequently  passed 
under  the  agreement. 

Matter  of  Leeds,  N.  Y.  L.  J.  June  2,  1914. 

Money  paid  under  an  agreement  to  compromise  an 
adverse  claim  to  the  estate  is  taxable  against  the  heirs. 

Matter  of  Edwards,  85  Hun,  436,  32  Supp.  901;  aff.,  146  N.  Y.  380; 
41  N.  E.  89. 

The  only  states  which  hold  a  contrary  view  and  permit 
subsequent  arrangements  among  the  heirs  to  affect  the 
tax  are  Pennsylvania  and  Colorado: 

Pepper's  Estate,  159  Pa.  St.  508;  28  A.  353. 
Hawley's  Estate,  214  Pa.  St.  525 ;  63  A.  1021. 
People  v.  Rice,  40  Colo.  508;  91  Pac.  33. 

4.  Payment  of  Debt  by  Will. 

Where  the  testator  recited  that  his  son  had  rendered 
him  valuable  services  and  devised  $5,000,000  in  payment 
of  the  same  and  all  subsequent  services  until  his  death, 
held  a  taxable  transfer.  The  court  said:  "  It  matters 
not  what  the  motive  of  a  transfer  by  will  may  be,  whether 
to  pay  a  debt,  discharge  some  moral  obligation,  or  to 
benefit  a  relative  for  whom  the  testator  entertains  a  strong 
affection ;  if  the  devise  or  bequest  be  accepted  by  the  bene- 
ficiary, the  transfer  is  made  by  will,  and  the  state,  by  the 
statute  in  question,  makes  a  tax  to  impinge  upon  that 
performance. ' ' 

Matter  of  Gould,  156  N.  Y.  423;  51  N.  E.  287. 

So  where  a  niece  agreed  to  live  with  her  uncle  and  care 
for  him  as  long  as  he  should  live  and  he  agreed  to  leave 


PART  II  —  THE  TRANSFER  55 

her  all  his  property  by  will,  and  did  so;  the  property 
passed  to  her  by  will  and  was  taxable  in  spite  of  the  con- 
tract, though  fully  executed  on  her  part. 
State  v.  M  oilier,  96  Kan.  514;  152  Pac.  771. 

Where  bonds  of  a  corporation  were  canceled  by  will  it 
was  held  a  taxable  transfer  to  the  corporation.  The  court 
said:  "  The  debenture  bonds  in  question  were  the  prop- 
erty of  the  testator.  When  he  bequeathed  them  to  the 
asylum  the  property  passed  from  him  to  it.  It  might 
cancel  the  bonds,  and  to  relieve  itself  of  the  obligation 
they  evidenced,  or  it  might,  probably,  transfer  them  to 
any  one  who  would  be  willing  to  pay  their  value. 

Ee  Rothschild,  71  N.  J.  Eq.  210;  63  A.  615;  aff.,  72  N.  J.  Eq.  425; 
65  A.  1118. 

But  when  notes  of  legatees  are  forgiven  by  will  and  are 
shown  to  be  valueless  no  tax  is  assessable. 

Matter  of  Daly,  100  App.  Div.  373;  91  Supp.  858;  aff.,  182  N.  Y. 
524;  74  N.  E.  1116. 

Payment  of  a  debt  by  the  exercise  of  a  power  of  appoint- 
ment is  taxable  if  the  creditors  accept  it. 

Matter  of  Rogers,  71  App.  Div.  461;  75  Supp.  835;  aff.,  172  N.  Y. 

617;  64  N.  E.  1125. 

Matter  of  Slosson,  87  Misc.  517;  149  Supp.  797;  affirmed  as  to  this 
point  216  N.  Y.  79;  110  N.  E.  166. 

/ 
And  where  the  testator  agreed  to  leave  all  the  property 

to  the  beneficiary  in  return  for  support  for  life  and  did  so 
the  devise  was  held  taxable. 

Carter  v.  Craig,  77  N.  H.  200;  90  A.  598. 

5.  As  Affected  by  Statute. 

The  New  York  statute  regulating  transfers  by  will  is 
Article  2  of  the  Decedents  Estate  Law,  Chapter  18,  L. 
1909,  sections  10  to  47  and  is  given  in  full,  with  index,  in 
the  Appendix. 


56  INHERITANCE  TAXATION 

B.— TRANSFERS  BY  INTESTATE  LAW. 

In  New  York  these  are  regulated  by  Article  3  of  the 
Decedent  Estate  Law,  which  appears  in  full  in  the  Appen- 
dix, with  index  and  Consolidator 's  Notes. 

"  The  term  '  intestate  laws  '  is  intended  to  cover  the 
statute  of  descent  which  relates  to  the  descent  of  real 
estate,  and  the  statute  of  distribution,  which  provides  for 
the  distribution  of  the  surplus  of  the  personal  property 
of  decedent,  after  the  payment  of  his  debts  and  legacies  if 
he  left  a  will,  and  after  setting  apart  to  the  widow  and 
minor  children  the  exemptions  specified  in  section  2713." 
Matter  of  Page,  39  Misc.  220,  79  Supp.  382. 

1.  As  to  Real  Estate. 

A  child  en  venire  sa  mere  is  in  being  for  purposes  of 
descent. 

Eockwell  v.  Gregory,  4  Hun,  606. 

A  will  is  not  revoked  by  the  advent  of  an  after-born 
child  of  testator,  but  the  child  as  heir  is  put  to  his  or  her 
special  statutory  action  under  this  section  and  only  the 
Supreme  Court  may  determine  whether  or  not  the  action 
will  lie. 

Matter  of  Sauer,  89  Misc.  105,  151  Supp.  465. 

Lineal  descendants  include  an  illegitimate  child  whose 
parents  subsequently  married. 
Miller  v.  Miller,  91  N.  Y.  315. 

Where  brothers  and  sisters  have  a  reversionary  inter- 
est it  vests  at  the  death  of  the  intestate  and  is  not  affected 
by  the  intervening  life  estate. 

Barber  v.  Brundage,  50  App.  Div.  123;   63  Supp.  347;  aff.,  169 
N.  Y.  368. 

In  the  absence  of  statute  great  uncles  succeed  to  the 
exclusion  of  great  aunts. 

Hwnt  V.  Kingston,  3  Misc.  309;  23  Supp.  352. 


PAET  II  —  THE  TRANSFER  57 

Where  intestate  conveyed  to  his  mother  property  he  had 
received  by  descent  from  his  father  and  she  afterwards 
willed  it  to  him  it  was  held  that  the  land  was  received  on 
the  part  of  the  mother  and  went  to  those  of  her  blood. 
Adams  v.  Anderson,  23  Misc.  705;  53  Supp.  141. 

Real  estate  received  from  the  mother  goes  to  cousins 
on  the  maternal  side  to  the  exclusion  of  collaterals  on  the 
side  of  the  father. 

Matter  of  McMillan,  126  App.  Div.  155;  110  Supp.  622. 

But  where  the  real  estate  did  not  come  from  either 
father  or  mother  the  collaterals  on  both  sides  are  entitled 
to  share. 

Matter  of  Peck,  53  Misc.  535;  109  Supp.  1083. 

2.  As  to  Personal  Property. 

Lineal  consanguinity  is  reckoned  by  counting  each  step, 
up  or  down,  from  the  deceased;  collateral  consanguinity 
by  counting  the  steps  from  the  intestate  to  the  common 
ancestor,  then  down  to  the  collateral  beneficiary. 
Matter  of  Marsh,  5  Misc.  428;  26  Supp.  718. 

Three  nephews  and  the  child  of  a  deceased  nephew  share 
equally,  each  one-fourth. 

Matter  of  Prote,  54  Misc.  495;  104  Supp.  301. 

In  all  such  cases  the  nephews  and  nieces  and  the  children 
of  deceased  nephews  and  nieces  take  per  stirpes. 

Matter  of  Fleming,  48  Misc.  589;  98  Supp.  306. 
Matter  of  Dunning,  48  Misc.  482;  96  Supp.  1110. 

And  generally,  where  there  are  unequal  degrees  the 
beneficiaries  take  per  stirpes. 

DwigU  v.  Gibb,  150  App.  Div.  573;  135  Supp.  431. 

Brothers  and  sisters  and  their  lineal  descendants  to  the 
most  remote  degree  are  preferred  to  other  kindred  not  in 


58  INHERITANCE  TAXATION 

closer  blood  relationship;  so  held  preferring  great  grand- 
nieces  over  first  cousins. 

Matter  of  Butterfield,  161  App.  Div.  506 ;  146  Supp.  671. 

Prior  to  1898  Subd.  12  of  Sec.  2732  of  the  Code,  now 
Sec.  98  of  the  Decedent's  Estate  Law,  read: 

11  No  representation  shall  be  admitted  among  collaterals 
after  brothers'  and  sisters'  children." 

In  1898  said  subdivision  was  amended  to  read :  '  *  Repre- 
sentation shall  be  admitted  among  collaterals  in  the  same 
manner  as  allowed  by  law  in  reference  to  real  estate." 

Where  an  intestate  is  survived  by  nephews  and  nieces 
and  by  grandnephews  who  are  children  of  a  deceased 
nephew  and  niece,  all  of  such  persons  having  sprung 
from  the  intestate's  deceased  brother,  the  grandnephews 
are  entitled  to  receive  their  parent's  share  of  the  personal 
estate. 

Matter  of  Ebbets,  43  M'isc.  575,  89  Supp.  544. 

Matter  of  McGovern,  N.  Y.  Law  Journal,  March  26,  1903,  distinguish- 
ing Matter  of  Davenport,  172  N.  Y.  454. 
Matter  of  Hadley,  43  Misc.  579,  89  Supp.  545. 
Matter  of  Kearney,  N.  Y.  Law  Journal,  May  4,  1905. 

Subd.  12  of  Sec.  98  was  further  amended  by  chapter 
539  of  the  Laws  of  1905,  to  read : 

"  No  representation  shall  be  admitted  among  collaterals 
after  brothers'  and  sisters,  descendants.  This  act  shall 
not  apply  to  an  estate  of  a  decedent*Vho  shall  have  died 
prior  to  the  time  this  act  shall  take  effect."  And  it  now 
reads:  "  Prior  to  May  18,  1905." 

In  the  Matter  of  Nichols,  60  Misc.  299,  113  N.  Y.  Supp. 
277,  the  court  says : 

"  Under  this  subdivision,  the  descendants  of  brothers 
and  sisters  to  the  remotest  degree  by  representation 
share  in  the  distribution  of  an  estate.  All  collateral 
relatives,  except  descendants  of  brothers  and  sisters,  are 
precluded  from  sharing  in  the  decedent's  estate  by  repre- 


PART  II  —  THE  TRANSFER  59 

sentation.  Where  they  are  all  of  the  same  degree  of  kin- 
ship, to  wit,  uncles  and  aunts,  and  nephews  and  nieces,  the 
rule  of  representation  does  not  apply,  still  they  take  by 
reason  of  that  degree. 

'  *  In  the  case  at  bar,  the  uncles  and  aunt  are  of  the  third 
degree  of  kinship,  while  all  of  the  cousins  are  of  the  fourth 
degree.  It  therefore  follows  that  the  cousins  are  pre- 
cluded by  reason  of  their  degree  of  kinship,  and  by  reason 
of  the  prohibition  found  in  said  subdivision  12,  from  shar- 
ing in  the  distribution  of  this  estate. 
Matter  of  Davenport,  172  N.  Y.  454. 

11  Subdivision  10  of  section  2732  provides  that,  *  Where 
the  descendants,  or  next  of  kin  of  the  deceased,  entitled  to 
share  in  this  estate,  are  all  in  equal  degree  to  the  deceased, 
their  shares  shall  be  equal/  " 

Following  this  it  was  held  in  the  Matter  of  Barry,  62 
Misc.  456,  that  where  an  intestate  leaves  no  nearer  kin 
than  cousins  and  descendants  of  deceased  cousins,  the 
cousins  take  under  subdivision  12,  Sec.  98,  to  the  exclusion 
of  the  descendants  of  deceased  cousins. 

So,  where  a  married  woman  dies  without  husband, 
brother,  sister,  ancestor  or  descendant  but  leaves  a  nephew 
and  niece,  the  only  children  of  a  previously  deceased 
brother,  and  no  other  children  or  descendants  of  brothers 
or  sisters,  and  also  two  uncles  and  two  aunts  and  many 
children  and  descendants  of  deceased  uncles  and  aunts, 
her  personal  property  is  to  be  divided  between  the  nephew 
and  niece  and  the  surviving  uncles  and  aunts,  all  of  whom 
are  of  equal  degree  of  consanguinity  to  the  decedent,  and 
as  the  uncles  and  aunts  of  the  decedent  would  not  be  heirs 
in  case  the  property  were  real  estate,  the  children  and 
descendants  of  the  deceased  uncles  and  aunts  are  not 
entitled  to  take. 

Matter  of  Davenport,  67  App.  Div.  191,  73  Supp.  653;  aff.,  172 
N.  Y.  454. 


60  INHERITANCE  TAXATION 

The  provisions  of  subd.  3  have  not  been  affected  or 
impaired  by  the  provisions  subd.  12,  declaring  that  repre- 
sentation shall  be  admitted  among  collaterals  in  the  same 
manner  as  allowed  by  law  in  reference  to  real  estate. 
Matter  of  Hardin,  44  Misc.  441,  90  Supp.  95. 

Nephews  and  grand  nephews  take  per  stirpes. 
Matter  of  De  Voe,  107  App.  Div.  245 ;  94  Supp.  1129. 

Where  the  surviving  next  of  kin  are  first  cousins  and 
the  children  of  deceased  first  cousins,  under  subd.  12,  the 
first  cousins  are  entitled  to  the  personal  estate  to  the 
exclusion  of  such  children. 
Adee  v.  Campbell,  79  N.  Y.  52. 

Second    cousins,    though    they    are    not    next    of    kin 
of  decedent,  are  entitled  to  letters  of  administration. 
Matter  of  Blake,  60  Misc.  627;  113  Supp.  944. 

3.  Advancements. 

The  statute  providing  that  advancements  shall  be 
deducted  from  the  share  of  the  beneficiary  applies  only  in 
case  of  intestacy. 

Messman  v.  Egenberger,  46  App.  Div.  46 ;  61  Supp.  556. 
Matter  of  Turfter,  1  Misc.  58,  23  Supp.  135. 
Burnham  v.  Comfort,  37  Hun,  216;  aff.  108  N.  Y.  535. 
Thompson  v.  Carmichael,  3  Sandf.  120. 
Kent  v.  Hopkins,  86  Hun,  611;  33  Supp.  767. 
Camp  v.  Camp,  18  Hun,  217. 

Where  the  intent  is  clear  a  gift  by  a  father  to  one  of 
his  children  will  not  be  construed  as  an  advancement. 
Matter  of  Accounting  of  Morgan,  104  N.  Y.  74, 

Expenditures  for  support   and  education  will  not  be 
deemed  advancements  as  it  is  the  legal  duty  of  a  father 
to  support  and  educate  his  children. 
Vail  v.  Vail,  10  Barb.  69. 


PABT  II  —  THE  TRANSFER  61 

It  is  not  necessary  to  show  that  the  advancement  is 
made  in  full  of  the  heir's  share  in  both  real  and  personal 
estate;  it  is  sufficient  to  show  that  the  advancement  was 
in  full  of  his  share  in  the  land  of  his  father,  leaving  him 
to  share  with  the  other  children  in  the  personal  estate. 
Palmer  v.  Culbertson,  143  N.  Y.  213. 

It  is  necessary  to  prove  not  only  the  making  by  the 
intestate  of  the  conveyance  by  way  of  advancement,  but 
also  that  such  advancement  was  equal  or  superior  to  the 
amount  of  the  share  which  each  child  would  be  entitled 
to  receive;  and  the  burden  of  such  proof  is  upon  those 
disputing  the  claim  of  such  child. 
Bell  v.  Champlain,  64  Barb.  396. 

4.  Resume  of  the  Intestate  Laws  of  the  Several  States. 

The  intestate  law  of  the  state  of  domicile  controls  the 
devolution  of  personal  property;  and  even  though  the 
personal  property  of  a  non-resident  is  taxed  because  it 
is  physically  present  within  the  jurisdiction  the  tax  must 
be  imposed  in  accordance  with  the  devolution  as  fixed  by 
the  foreign  law. 

Blackstone  V.  Miller,  188  TJ.  S.  189;  23  S.  Ct.  Rep.  277. 
People  v.  Griffith,  245  111.  532;  92  N.  E.  313. 

The  decedents  estate  laws  of  the  several  states  vary 
considerably  in  detail  and  an  extended  review  of  their 
provisions  is  not  within  the  scope  of  this  work.  The  fol- 
lowing brief  summary  of  the  statutes  of  descent  of  the 
several  states  may  be  found  of  some  assistance;  though 
they  are  so  frequently  amended  the  information  should 
always  be  verified. 

a.    BIGHTS  OF  A  SURVIVING  HUSBAND. 

If  the  widow  survives  her  husband  her  rights  are  the 
same  as  his  except  as  follows : 


62  INHERITANCE  TAXATION 

The  surviving  husband  takes  the  entire  personal  estate 
whether  there  is  issue  of  the  marriage  or  not  in  Delaware, 
District  of  Columbia,  North  Carolina,  Rhode  Island  and 
Virginia. 

In  New  York  he  takes  the  entire  personalty  if  there 
is  no  issue. 

The  surviving  husband  takes  the  entire  estate  if  there 
is  no  issue  and  the  same  share  as  each  child  in  Florida, 
Georgia  and  Pennsylvania.  In  Ohio  he  takes  the  entire 
estate  if  there  is  no  issue,  if  there  be  issue  they  take  it. 

In  all  other  cases  the  rights  of  the  surviving  spouse  are 
the  same. 

b.  WHEN  THERE  is  NO  HUSBAND,  WIDOW,  CHILDREN  OR 
DESCENDANTS. 

The  parents  take  the  entire  estate  in  equal  shares  in 
Alabama,  Arizona,  California,  Colorado,  Connecticut, 
Idaho,  Iowa,  Kansas,  Kentucky,  Maine,  Massachusetts, 
Michigan,  Montana,  Minnesota,  Nebraska,  Nevada,  New 
Hampshire,  North  Carolina,  Oklahoma,  Pennsylvania, 
Texas,  Utah,  Vermont,  Washington,  Wisconsin  and 
Wyoming. 

If  one  parent  is  dead  the  other  takes  the  whole  in  these 
states  except  Alabama,  Arizona,  Maine,  and  Texas,  where 
the  brothers  and  sisters  or  their  descendants  take  half 
and  the  surviving  parent  the  other  half. 

In  these  states  the  father  takes  all,  if  dead,  the  mother, 
brothers  and  sisters  or  their  descendants  equally :  Florida 
New  York,  Oregon,  Rhode  Island,  South  Dakota,  Ten- 
nessee, Virginia  and  West  Virginia. 

In  these  states,  the  parents,  if  living,  share  equally  with 
the  descendants:  Georgia,  Illinois,  Mississippi,  Missouri, 
New  Jersey  and  South  Carolina. 

In  these  states  the  father  takes  all,  if  dead  the  mother 
takes  all,  if  both  are  dead  then  to  the  brothers  and  sisters 


PART  II  — THE  TEANSFEB  63 

equally:  Arkansas,  District  of  Columbia  and  North 
Dakota. 

In  these  states  the  brothers  and  sisters  and  their  des- 
cendants take  all  and  the  parents  only  inherit  in  case 
there  are  none:  Delaware,  Ohio,  Maryland. 

c.  WHERE  BOTH  THE  PARENTS  ARE  DEAD  LEAVING  ISSUE. 
The   children   take   all   to   the    exclusion   of   all   other 

relatives  equally,  if  all  are  living,  if  one  or  more  are  dead 
leaving  issue  the  issue  take  parent's  share  per  stirpes. 
And  the  rule  per  stirpes  follows  unless  all  surviving  issue 
are  of  equal  degree.  This  is  the  rule  in  all  the  states. 

d.  WHERE  A  WIDOW  AND  ISSUE  OR  DESCENDANTS  SURVIVE. 

When  the  deceased  leaves  a  widow  and  children,  or 
descendants,  the  widow  takes  one-third  and  the  children 
share  equally  in  the  residue  in  the  following  states: 
Arizona,  Arkansas,  Connecticut,  Delaware,  District  of 
Columbia,  Illinois,  Iowa,  Maine,  Maryland,  Massachusetts, 
Minnesota,  New  Hampshire,  New  Jersey,  New  York,  Ohio, 
(one-half  if  less  than  $400)  Pennsylvania,  Rhode  Island, 
South  Carolina,  Texas,  Vermont,  Virginia  and  West 
Virginia. 

In  the  following  states,  if  there  be  but  one  child  the 
widow  takes  one-half  and  the  child  one-half ;  if  two  or  more 
children  or  their  descendants,  the  widow  takes  one-third, 
as  above,  and  the  children  or  their  descendants  the  resi- 
due: California,  Florida,  Idaho,  Michigan,  Montana, 
Nevada,  North  Dakota,  Oklahoma,  South  Dakota,  and 
Utah. 

In  the  following  states  the  widow  takes  one-half  and  the 
children,  or  descendants,  the  residue:  Colorado,  Kansas, 
Kentucky,  Oregon,  Washington,  and  Wyoming. 

In  the  following  states  the  widow  takes  the  same  share 
as  each  of  the  children :  Mississippi,  Missouri,  Tennessee 
and  Wisconsin. 


64  INHERITANCE  TAXATION 

In  North  Carolina,  if  there  are  less  than  three  chil- 
dren, the  widow  takes  one-third  and  the  children  the  resi- 
due; if  there  are  three  or  more  children,  the  widow  takes 
the  same  share  as  each  of  the  children. 

In  Alabama,  if  there  is  but  one  child,  the  widow  takes 
one-half  and  the  child  one-half;  if  there  are  more  than 
one  child  and  less  than  five  children,  the  widow  takes  the 
same  share  as  each  of  the  children;  if  there  are  five  or 
more  children,  the  widow  takes  one-fifth  and  the  children 
or  their  descendants  share  equally  in  the  residue. 

In  Georgia,  if  there  are  less  than  five  children,  the 
widow  takes  the  same  share  as  each  of  the  children;  if 
there  are  five  or  more  children,  the  widow  takes  one-fifth 
and  the  children  or  their  descendants  share  equally  in 
the  residue. 

In  Nebraska,  if  widow  is  not  the  parent  of  all  the  chil- 
dren of  the  deceased  and  there  be  more  than  one  child, 
widow  takes  one-fourth  and  the  children  the  residue.  If 
widow  is  parent  of  all  children  of  the  deceased,  she  takes 
one-half  if  there  be  but  one  child  and  the  child  the  residue ; 
if  there  be  more  than  one  child  the  widow  takes  one-third 
and  the  children  the  residue. 

In  New  Mexico,  the  widow  takes  one-half  of  the  estate 
acquired  during  marriage,  otherwise  than  by  gift  and  the 
children  or  their  descendants  share  equally  in  the  residue; 
the  widow  also  takes  one-fourth  of  the  estate  acquired 
before  marriage,  or  by  gift  or  legacy  during  marriage, 
the  children  or  their  descendants  taking  the  residue. 

e.     IF  THERE  is  A  WIDOW  on  HUSBAND  BUT  No  CHILDREN 
OR  DESCENDANTS. 

The  rights  are  the  same,  except  as  before  stated  as  to 
the  husband. 

The  surviving  spouse  takes  all  in  Alabama,  Arizona, 
Colorado,  Florida,  Georgia,  Illinois,  Kansas,  Minnesota, 


PABT  II  —  THE  TRANSFER  65 

Mississippi,  New  Jersey,  New  Mexico,  Ohio,  Oregon,  Ten- 
nessee, Texas,  Washington,  West  Virginia  and  Wisconsin. 

In  the  following  states  the  surviving  spouse  takes  one- 
half,  the  residue  being  taken  by  the  other  relatives  in 
the  manner  and  proportion  in  which  they  take  the  whole 
estate  when  the  deceased  leaves  neither  widow  nor  de- 
scendants: Arkansas,  California,  Delaware,  District  of 
Columbia,  Idaho,  Iowa,  Kentucky,  Maine,  Maryland, 
Missouri,  Montana,  Nebraska,  Nevada,  North  Carolina, 
Oklahoma,  Ehode  Island,  Texas,  Washington,  West  Vir- 
ginia and  Wisconsin. 

In  Massachusetts,  North  Dakota,  Pennsylvania  and 
Utah  the  husband  or  widow  takes  the  entire  estate  up  to 
$5,000  and  one-half  of  the  residue. 

In  Connecticut  the  husband  or  widow  takes  the  entire 
estate  up  to  $2,000  and  one  half  of  the  residue. 

In  New  York,  if  there  be  a  father  or  mother  of  deceased 
surviving,  the  widow  takes  one  half;  if  there  be  no  father 
or  mother,  but  a  brother  or  sister,  nephew  or  niece  sur- 
viving, the  widow  takes  $2,000  and  one-half  residue;  if 
there  be  no  parent,  brother,  sister,  nephew  or  niece,  the 
widow  takes  all.  The  residue  after  the  widow's  share 
passes  in  each  case  in  accordance  with  the  provisions 
applying  where  no  widow  or  issue  survive.  The  husband 
takes  all  by  common  law  right. 

In  New  Hampshire  the  widow  takes  $1,500  and,  if  the 
estate  exceeds  $3,000  one-half  of  the  residue. 

In  Wyoming  the  widow  takes  the  entire  estate  up  to 
$20,000  and  three-fourths  of  the  residue  (if  brother, 
sister  or  parent  survive,  otherwise  all  to  widow). 

In  Michigan  the  widow  takes  the  entire  estate  up  to 
$3,000  and  one-half  of  the  residue  (if  brother,  sister  or 
parent  survive,  otherwise  all  to  widow). 

In  Vermont  the  widow  takes  entire  estate  if  not 
3 


66  INHERITANCE  TAXATION 

exceeding  $2,500  if  more  than  $2,500  widow  takes  that  sum 
and  one-half  residue. 

For  authorities  interpreting  the  New  York  statute  of 
distribution  see: 

Matter  of  Page,  39  Misc.  220;  79  Supp.  382. 
Matter  of  Ebbetts,  43  Misc.  575;  89  Supp.  544. 
Matter  of  Hadley,  43  Misc.  579;  89  Supp.  545. 
Matter  of  Nichols,  60  Misc.  299 ;  113  Supp.  277. 
Matter  of  Barry,  62  Misc.  456 ;  116  Supp.  798. 
Matter  of  Davenport,  172  N.  Y.  454;  65  N.  E.  275. 
Matter  of  Clowes,  163  App.  Div.  961;  148  Supp.  386. 
See  New  York  Decedents'  Estate  Law,  Appendix. 

C.—  GIFTS. 

Gifts,  in  inheritance  tax  law,  are  divided  into  four 
classes:  1.  Gifts  inter  vivos;  2.  Gifts  causa  mortis; 
3.  Gifts  in  contemplation  of  death;  4.  Gifts  to  take  effect 
in  possession  or  enjoyment  at  or  after  death.  Gifts  inter 
vivos  are  not  taxable  transfers,  the  rest  are. 

1.  Gifts  Inter  Vivos. 

Completed  gifts  inter  vivos  are  not  subject  to  transfer 
tax.  To  establish  that  the  alleged  gift  is  not  a  part  of 
decedent's  estate  the  evidence  must  show  donor's  intent 
to  give,  delivery  of  the  thing  given  and  acceptance  by  on 
behalf  of  the  donee. 

Beaver  v.  Beaver,  117  N.  Y.  421;  22  N.  E.  940. 
Matter  of  Bolin,  136  N.  Y.  177;  32  N.  E.  626. 

a.     BURDEN  OF  PROOF  is  ON  THE  DONEE. 

The  court  said  in  Matter  of  O'Connell,  33  App.  Div., 
483 :  '  *  He  who  attempts  to  establish  title  to  property 
through  a  gift  inter  vivos  as  against  an  estate  of  a 
decedent  takes  upon  himself  a  heavy  burden  which  he 
must  support  by  evidence  of  great  probative  force,  which 
clearly  establishes  every  element  of  a  valid  gift,  viz.,  that 
the  decedent  intended  to  divest  himself  of  the  title  in 


PAST  II  —  THE  TRANSFER  67 

favor   of  the   donee   and   accompanied  his   intent  by  a 
delivery  of  the  subject  matter  of  the  gift." 
To  the  same  effect  are: 

Matter  of  Perry,  129  App.  Div.  587;  114  Supp.  246. 

Doty  v.  Wilson,  47  N.  Y.  580. 

Beaver  v.  Beaver,  117  N.  Y.  421;  22  N.  E.  940. 

LeJir  v.  Jones,  74  App.  Div.  54;  77  Supp.  213. 

Hemmerich  v.  Union  Dime  8.  I.,  205  N.  Y.  366;  98  N.  E.  499. 

b.     THERE  MUST  BE  A  PRESENT  INTENT  TO  GIVE. 

It  is  axiomatic  that  the  gift  must  be  in  praesenti  and 
not  in  futuro.  A  mere  promise  of  a  gift  in  the  future 
does  not  constitute  a  good  gift  inter  vivos. 

1 1  If  the  gift  regards  the  future  it  is  but  a  promise  with- 
out consideration  and  has  no  validity." 

Parsons  on  Contracts,  5th  ed.  15,  Sec.  1. 

This  principle  is  well  illustrated  in  the  case  of  Holmes 
v.  Roper,  141  N.  Y.  64;  36  N.  E.  180.  In  this  case  a  note 
was  given  without  consideration.  This  note  was  handed 
and  delivered  by  the  deceased  to  his  brother  and  after  his 
death  the  brother  sued  the  executor  but  was  unsuccess- 
ful, for  the  court  held  that  the  note  was  a  mere  executory 
promise  in  the  future  and  therefore  was  not  good  as  a 
gift  either  causa  mortis  or  inter  vivos. 

This  principle  was  applied  to  a  subscription  to  the 
building  fund  of  a  church:  Twenty-third  Street  Baptist 
Church  v.  Cornell,  117  N.  Y.  601,  where  the  court  said: 
"  The  promise  died  when  she  died,  and  was  merely  a 
good  intention  which  did  not  survive  her. ' ' 

Words  which  necessarily  refer  to  the  future  cannot  be 
construed  to  effectuate  a  present  gift. 

Matter  of  Brown,  86  Misc.  187;  149  Supp.  138;  aff.   167  App.  Div. 

912. 
Matter  of  Somerville's  Estate,  20  Supp.  76. 


68  INHERITANCE  TAXATION 

c.     THESE  MUST  BE  DELIVERY  or  THE  THING  GIVEN. 

"  The   necessity  of   delivery   has   been  maintained  in 
every  period  of  the  English  Law." 
Kent's  Commentaries,  vol.  2,  p.  348. 

The  principle  was  applied  in  Harris  v.  Clark,  3  N.  Y. 
93.  The  decedent  gave  a  draft  for  $30,000  to  Ms  sister 
upon  E.  Clark  &  Co.,  who  had  more  than  sufficient  funds 
to  meet  it.  The  deceased  had  formerly  been  a  partner 
of  the  concern,  and  it  was  amply  solvent.  But  he  died 
before  his  sister  could  present  this  draft  to  them  for  their 
acceptance.  The  court  held  that  as  there  was  no  accept- 
ance of  the  draft  it  was  a  mere  promise  to  pay  in  case 
they  did  not  pay,  made  without  consideration  and  revoked 
by  his  death;  also,  as  an  order  on  E.  Clark  &  Co.  that  it 
was  revoked  by  his  death. 

The  rule  has  been  followed  in  these  cases: 

Matter  of  King,  51  Misc.  375,  381 ;  101  Supp.  279. 
Gegan  v.  Union  Trust  Co.,  198  N.  Y.  541;  92  N.  E.  1085. 
Matter  of  Crawford,  113  N.  Y.  366;  21  N.  E.  142. 

In  a  box  kept  by  decedent  at  his  bank  marked  with  his 
name  and  that  of  his  sister-in-law  there  were  unrecorded 
deeds  from  him  to  the  sister-in-law,  and  also  executed 
assignments  of  certain  stock  and  a  mortgage,  and  certifi- 
cates of  deposit  endorsed  on  the  back  by  him  to  the  order 
of  another  sister-in-law.  The  several  documents  were  in 
envelopes  on  which  the  decedent  had  written  "  the  prop- 
erty of  "  with  the  name  of  the  person:  Held,  no  delivery 
and  taxable  as  part  of  decedent's  estate. 
Matter  of  Sharer,  36  Misc.  502;  73  Supp.  1057. 

d.     DELIVERY  TO  AN  AGENT. 

The  rule  seems  to  be:  That  a  delivery  to  an  agent  or 
trustee  of  a  donee  is  good;  but  that  a  delivery  to  an 
agent  or  servant  of  the  donor  is  not  and  cannot  be  good 
delivery  to  the  donee  for  the  reason  that  the  donor  may 


PART  II --THE  TRANSFER  69 

countermand  the  gift  at  any  time  prior  to  the  delivery 
by  his  agent  to  the  beneficiary. 

1.  To  Agent  of  Donor. 

A  delivery  to  the  agent  of  the  donor  to  be  delivered  to 
a  third  person  is  not  a  good  delivery.  This  rule  is  as  old 
as  the  common  law.  In  Lyte  et  Ux  v.  Peny,  Easter  Term, 
33  Hen.,  VIII,  a  man  gave  money  to  third  person  to  be 
delivered  to  a  woman  on  the  day  of  her  marriage.  The 
question  was  whether  before  her  marriage  he  could 
countermand  and  revoke  the  gift.  It  was  held  that  he 
could  do  so,  the  court  reasoning :  '  *  For  if  a  man  delivers 
to  his  servant  on  New  Year's  Day  a  golden  cup  to  give  as 
a  New  Year's  gift  to  a  stranger,  clearly  he  may  counter- 
mand this,  notwithstanding  the  gift,  for  it  was  not  a  gift 
perfectly  executed." 

So  where  a  decedent  had  given  an  order  on  a  bank  to 
transfer  her  account  to  the  joint  names  of  herself  and  her 
husband  and  died  before  the  order  was  executed;  held, 
no  gift. 

Augslury  v.  Shurtliff,  18a  N.  Y.  138;  72  N.  E.  927. 

The  same  rule  is  laid  down  in  Sessions  v.  Moseley,  4 
Gush.  (Mass.),  87,  at  page  92:  "  If,  therefore,  it  be 
delivered  to  a  third  person  with  authority  to  deliver  it 
to  the  donee,  this  depository,  until  the  authority  is 
executed  by  actual  delivery  to  and  acceptance  by  the 
donee,  is  the  agent  of  the  donor,  who  may  revoke  the 
authority  and  take  back  the  gift,  and  therefore  if  the 
delivery  does  not  take  place  in  the  donor's  lifetime,  the 
authority  is  revoked  by  his  death;  the  property  does  not 
pass  but  remains  in  the  donor  and  goes  to  his  executor 
or  administrator." 

This  rule  was  followed  in: 

Clapper  v.  Frederick,  199  Pa.  St.  609 ;  49  A.  218. 
Wadd  v.  Hazleton,  137  N.  Y.  215;  33  N.  E.  143. 
Matter  of  Loewi,  75  Misc.  57 ;  134  Supp.  679. 


70  INHERITANCE  TAXATION 

The  delivery  to  the  agent  must  be  accompanied  by  the 
intent  to  give.  If  he  holds  as  bailee  his  possession  is 
not  such  as  to  complete  delivery. 

Matter  of  Palmer,  117  App.  Div.  360 ;  102  Supp.  236. 
Matter  of  Bolin,  136  N.  Y.  177;  32  N.  E.  626. 

In  the  Bolin  case,  Julia  Cody,  the  decedent,  deposited 
money  in  the  savings  bank,  "  Julia  Cody  or  daughter, 
Bridget  Bolin."  Before  Mrs.  Cody  died  and  during  her 
last  illness  all  of  her  property,  including  the  savings  bank 
pass  book,  came  into  the  possession  of  her  daughter. 
The  court  says  at  page  179 :  * '  Nor  was  the  custody  of 
the  passbook  by  the  daughter  such  a  possession  as  evinced 
an  intention  to  transfer  the  ownership  of  the  moneys 
deposited  to  the  daughter."  In  other  words,  the 
daughter's  possession  was  as  bailee  for  her  mother,  and 
could  not  inure  to  her  benefit  as  the  recipient  of  a  gift. 

2.  To  Agent  of  the  Donee. 

When,  however,  the  third  person  is  held  to  be  the  agent 
of  the  donee,  the  delivery  is  complete. 

In  Matter  of  Mills,  172  App.  Div.  530;  158  Supp.  1100; 
afr*.  219  N.  Y.  100,  the  decedent,  Darius  0.  Mills  was  HI 
in  California.  All  his  securities  were  in  possession  of 
his  son,  Ogden  Mills,  in  a  safe  deposit  box  in  New  York. 
The  decedent  wrote  to  his  son  that  he  wished  to  give 
$1,000,000  each  to  him  and  to  his  sister  Mrs.  Whitelaw 
Eeid  as  a  Christmas  present  in  Atchison  stock,  and 
directed  his  book-keeper  to  make  entries  in  his  books  to 
that  effect.  It  was  held  that,  as  the  son  was  already  in 
possession,  delivery  would  be  ''an  idle  ceremony,"  and 
that  the  son  was  the  agent  of  his  sister  and  therefore  the 
delivery  to  her  was  also  complete. 


PART  II  —  THE  TRANSFER  71 

e.  SYMBOLICAL  DELIVERY. 

Symbolical  delivery  has  been  held  sufficient  in  these 
cases : 

By  a  key  to  a  safe  deposit  box: 

Gilkinson  v.  Third  Ave.  Railroad  Co.,  47  App.  Div.  472;  63  Supp. 
792. 

By  a  savings  bank  book : 
McGuire  v.  Murphy,  107  App.  Div.  104;  94  Supp.  1005. 

By  written  memorandum: 
Champney  V.  Blanchard,  39  N.  Y.  11. 

f.  RE-DELIVERY  BY  DONEE  TO  DONOR. 

The  gift  may  be  redelivered  by  the  donee  to  the  donor  to 
hold  as  agent. 

Gannon  v.  McGuire,  160  N.  Y.  476;  55  N.  E.  7. 

But  if  the  delivery  and  re-delivery  are  so  connected  as 
to  amount  to  one  transaction  and  the  donor  thereafter 
retains  full  power  of  control  and  the  income  for  his  own 
benefit  there  has  been  no  transfer  of  title  and  hence  no 
gift. 

Matter  of  Brandreth,  169  N.  Y.  437;  62  N.  E.  563. 

If  on  the  other,  hand,  the  title  has  passed  and  the  donor 
holds  the  property  as  agent  for  and  acts  in  good  faith  on 
behalf  of  the  donee  and  not  for  himself  the  fact  that  he 
does  so  is  not  evidence  that  no  gift  was  intended  or  took 
place. 

Matter  of  Hendericks,  163  App.  Div.  413;  148  Supp.  511;  aff.,  214 
N.  Y.  663. 

In  the  Hendricks  case  the  court  said:  "  The  learned 
surrogate,  as  appears  from  his  opinion,  reached  the  con- 
clusion which  he  did  by  reason  of  the  fact  that  the  con- 
trol which  this  deceased  could  exercise  over  the  stocks 
was  greater  than  that  reserved  to  the  donor  in  Matter 


72  INHERITANCE  TAXATION 

of  Branded  (169  N.  Y.  437)  and  Matter  of  Cornell  (170 
id.  423).  But  it  is  the  source  and  not  the  extent  of  the 
control  which  is  important.  In  each  of  these  cases  the 
donor,  at  the  time  of  making  the  gifts,  reserved  to  him- 
self the  income  of  the  property  during  his  life.  To  that 
extent  the  gifts  were  conditional.  Here  the  transfers  of 
the  certificates  did  not  have  attached  to  them  any  condi- 
tion or  reservation  whatever.  The  source  of  the  donor's 
control  was  an  agreement  subsequent  to*  the  gifts  and  not 
a  condition  attached  to  them.  The  stocks  in  question  did 
not  belong  to  the  deceased  at  the  time  of  his  death,  they 
are  not  a  part  of  his  estate,  and,  therefore,  not  subject  to 
a  tax.  A  conclusion  to  the  contrary  would  be  without 
evidence  to  support  it." 

So,  where  a  husband  endorsed  over  to  his  wife  five  notes 
and  thereafter,  by  a  separate  instrument  she  gave  him 
the  proceeds  thereof  during  life  Surrogate  Cohalan  held 
that,  under  the  decision  in  the  Matter  of  Eendricks  the 
title  passed  and  that  no  transfer  took  place  at  death. 
This  would  seem  to  afford  an  opening  for  avoiding  the 
rule  that  a  gift  reserving  a  life  use  is  taxable  as  a  trans- 
fer to  take  place  at  death. 

Matter  of  Cohen,  N.  Y.  L.  J.  Aug.  6,  1915. 

g.     POWER  or  REVOCATION. 

It  must  not  be  an  "  Indian  Gift. ' '  The  donor  must  part 
with  all  control  or  power  or  revocation. 

Re  Douglas  County,  84  Neb.  506;  121  N.  W.  593. 
Matter  of  Green,  153  N.  Y.  223;  47  N.  E.  292. 
Matter  of  Brandreth,  169  N.  Y.  437;  62  N.  E.  563. 
Matter  of  Cornell,  170  N.  Y.  423;  63  N.  E.  445. 
State  V.  Bullen,  143  Wis.  512;  128  N.  W.  109. 

The  courts  have  made  an  apparent  exception  in  the 
matter  of  bank  accounts  taken  in  trust  for  another. 

A  deposit  by  one  person  of  his  own  money,  in  his  own 
name  as  trustee  for  another,  standing  alone,  does  not 


PART  II  — THE  TKANSFEB  73 

establish  an  irrevocable  trust,  during  the  lifetime  of  the 
depositor.  It  is  a  tentative  trust,  merely  revocable  at 
will,  until  the  depositor  dies  or  completes  the  gift  in  his 
lifetime  by  some  unequivocal  act  or  declaration,  such  as 
delivery  of  the  pass-book  or  notice  to  the  beneficiary. 
In  case  the  depositor  dies  before  the  beneficiary  without 
revocation  or  some  decisive  act  or  declaration  of  dis- 
affirmance,  the  presumption  arises  that  an  absolute  trust 
was  created  as  to  the  balance  on  hand  at  the  death  of  the 
depositor. 

Matter  of  Totten,  179  N.  Y.  112;  71  N.  E.  748. 

Matthews  v.  Brooklyn  Sav.  Bk.,  208  N.  Y.  508;  102  N.  E.  520. 

But  where  the  beneficiary  dies  before  the  depositor  the 
trust  is  terminated  and  no  title  passes. 

Matter  of  U.  S.  Trust  Co.,  117  App.  Div.  178;  102   Supp.  271; 

aff.,  189  N.  Y.  500;  81  N.  E.  1177. 
Matter  of  Duffy,  127  App.  Div.  74;  111  Supp.  77. 

Where  one  deposits  money  in  a  bank  in  his  own  name 
in  trust  for  his  sister,  who  had  no  knowledge  that  such 
an  account  was  opened  and  who  died  before  the  depos- 
itor, he  exercising  sole  dominion  over  the  account  and 
drawing  the  interest  thereon  before  and  after  her  death, 
there  is  no  presumption  that  a  trust  was  created  in  favor 
of  the  sister  or  her  estate,  although  the  depositor  died 
without  changing  the  account.  On  the  contrary  the  pre- 
sumption arises  that  the  account  was  so  kept  for  ulterior 
motives. 

Garvey  v.  Clifford,  114  App.  Div.  193 ;  99  Supp.  555. 

and  such  a  deposit  is  subject  to  the  right  of  creditors 
after  death  of  depositor. 

Beakes  Dairy  Co.  v.  Berns,  128  App.  Div.  137;  112  Supp.  529. 

But  it  is  held  that  such  deposits  constitute  a  gift  to  take 
effect  at  death  and  are,  therefore,  taxable. 

Matter  of  Palm,  148  Supp.  1044. 

Matter  of  Halligan,  82  Misc.  30,  143  Supp.  676. 

Matter  of  Crusius,  N.  Y.  L.  J.,  Feb.  26,  1914. 


74  INHERITANCE  TAXATION 

Where,  however,  the  beneficiary  of  the  trust  has  notice 
of  the  gift  before  the  death  of  the  donor,  the  transfer  of 
title  is  held  complete  and  an  irrevocable  trust  established, 
so  that  no  tax  is  imposed. 

Matter  of  Brennan,  92  Misc.  423 ;  157  Supp.  141. 
Matter  of  Rudolph,  92  Misc.  347,  156  Supp,  825. 

As  a  general  rule  where  there  is  a  power  to  revoke 
no  gift  is  consummated  and  the  property  remains  that  of 
the  donor,  passing  at  his  death  and  subject  to  tax. 

In  Matter  of  Dana,  215  N.  Y.  461;  109  N.  E.  557,  the 
court  said:  "  The  trust  instrument  was  essentially  testa- 
mentary in  character.  It  reserved  to  the  donor  the  income 
from  the  stock  during  his  lifetime;  the  right  to  direct 
how  the  trustee  should  vote  thereon;  the  power  to  cause 
the  trustee  to  sell  the  stock  in  such  manner  and  at  such 
price  as  the  donor  might  direct;  the  right  to  substitute 
a  different  trustee  at  will;  and  the  absolute  right  of  revo- 
cation at  any  time  during  the  lifetime  of  the  donor.  In 
fact,  after  the  execution  of  the  deed  of  trust  Mr.  Dana 
still  retained  just  as  much  power  over  the  stock  as  he 
would  have  had  if  he  had  disposed  of  it  by  will  instead 
of  executing  the  instrument  which  he  delivered  to  Mr. 
Seibert.  There  was  no  element  of  finality  about  the 
instrument  during  the  donor's  lifetime,  for  it  was  just  as 
capable  of  revocation  as  a  will  would  have  been." 
See  post,  p.  87. 

h.     STOCK  TRANSFER  STAMPS. 

Under  the  New  York  tax  on  transfers  of  stock  the 
statute  requires  the  stamps  to  be  affixed  at  the  time  of 
the  transfer.  In  case  of  failure  to  do  so  no  evidence  of 
the  gift  can  be  received  in  any  court,  under  the  statute. 
If  no  stock  transfer  stamps  wTere  affixed  by  donor  of  stock 
at  the  time  of  the  gift  and  objection  to  evidence  of  an 


PART  II  —  THE  TRANSFER  75 

alleged  gift  is  made  on  that  ground  before  the  appraiser 
it  must  be  stricken  out. 

Matter  of  Ball,  161  App.  Div.  79;  146  Supp.  499. 

Matter  of  Church,  N.  Y.  L.  J.,  June  5,  1916 ;  aff.,  176  App.  Div.  910. 

But  it  is  too  late  to  take  the  objection  on  appeal  to  the 
surrogate  or  to  move  to  strike  out  the  evidence  admitted 
by  the  appraiser  when  the  point  was  not  raised  before 
him. 

Matter  of  Cleveland,  171  App.  Div.  908;  155  Supp.  1098. 
Matter   of  Mills,  172  App.   Div.   530;    158   Supp.   1100;    aff.,   219 
N.  Y.  100. 

1.  CONSIDERATION. 

If  the  donee  gives  consideration  of  course  it  is  not  a 
gift  but  a  contract,  and  if  the  title  passes  and  the  trans- 
action is  completed  inter  vivos  no  tax  is  imposed. 

Matter  of  Thome,  44  App.  Div.  8 ;  60  Supp.  419. 

Matter  of  Hess,  110  App.  Div.  476;  96  Supp.  990;  aff.,  187  N.  Y. 

554;  80  N.  E.  1111. 
Matter  of  Edgerton,  35  App.  Div.  125;  54  Supp.  700;  aff.,  158 

N.  Y.  671;  52  N.  E.  1124. 
See  post  p.  92. 

2.  Gifts  Causa  Mortis. 

A  gift  causa  mortis  is  revocable  at  any  time  by  the 
donor  and  becomes  void  if  the  donee  dies  first.  It  is 
therefore  not  only  in  contemplation  of  death  but  title  to 
the  property  is  subject  to  be  defeated  by  donor's  revo- 
cation. 

Ridden  v.  Thrall,  125  N.  Y.  572;  26  N.  E.  627. 

In  the  early  cases  in  New  York  it  was  substantially  held 
that  there  was  no  distinction  between  gifts  causa  mortis 
and  gifts  in  "  contemplation  of  death." 

Matter  of  Spaulding,  49  App.  Div.  541;  63  Supp.  694;  aff.,  163 
N.  Y.  607;  57  N.  E.  1124. 


76  INHERITANCE  TAXATION 

But  this  view  is  held  too  narrow  by  the  courts  of  other 
states. 

Estate  of  Reynolds,  169  Cal.  600;  147  Pae.  268. 

See  however  as  to  rule  in  California. 
Spreckles*  Estate,  30  Cal.  App.  363;  158  Pac.  549. 

See  also  California  Statute  of  1917,  Appendix. 

It  is  no  longer  entertained  by  the  courts  of  New  York. 

Matter  of  Dee,  148  Supp.  423;  aff.,  161  App.  Div.  881;  145  Supp. 
1120;  aff.,  210  N.  Y.  625. 

It  is  now  universally  held  that  though  such  gifts  are 
not  causa  mortis  and  are  complete  inter  vivos  yet  they 
are  taxable  if  clearly  made  "  in  contemplation  of  death." 

Merrifield  v.  People,  '212  111.  400;  72  N.  E.  446. 
State  v.  Pabst,  139  Wis.  561;  121  N.  W.  351. 

3.  Gifts  in  Contemplation  of  Death, 
a.     NATURE  OF  THE  "  CONTEMPLATION.*' 

It  is  not  the  general  knowledge  of  all  men  that  they 
must  "  die  sometime;"  or,  as  Lord  Mansfield  put  it,  that 
' '  we  all  have  in  us  the  seeds  of  mortality. ' ' 

Facts  or  circumstances  must  be  adduced  to  show  some 
existing  condition  of  mind  or  body  from  which  an  appre- 
hension of  death  might  arise. 

Matter  of  Spaulding,  49  App.  Div.  541;  63  Supp.  694;  aff.,  163 
N.  Y.  607;  57  N.  E.  1124. 

It  is  therefore  a  question  of  fact  and  must  depend  upon 
the  circumstances  of  each  particular  case. 

People  v.  Kelly,  218  111.  509;  75  N.  E.  1038. 

Matter  of  Mahlstedt,  67  App.  Div.  176;  73  Supp.  818. 

and  the  burden  of  proof  is  on  the  state. 
State  v.  Thompson,  154  Wis.  320;  142  N.  W.  647. 

But  "  To  prove  that  property  is  transferred  in  con- 
templation of  death  is  exceedingly  difficult,  as  the  only 


PABT  II  —  THE  TRANSFER  77 

parties  whose  intimacy  with  a  decedent  would  afford  them 
an  opportunity  of  being  cognizant  of  his  intentions  are 
usually  those  whose  interests  would  be  served  by  testi- 
mony to  the  effect  that  the  gift  was  not  made  in  contempla- 
tion of  death  and  the  State  is,  therefore,  compelled  to  rely 
upon  conclusions  derived  from  the  testimony  of  witnesses 
who  are  interested  in  disproving  its  contention.  It  is  also 
in  large  measure  the  attempted  proof  of  the  operations  of 
a  man's  mind." 

Matter  of  Price,  62  Misc.  149-152;  116  Supp.  283. 

So  when  it  appears  that  the  deceased  had  had  two 
paralytic  strokes  the  court  is  bound  to  presume  that  a 
gift  has  been  made  in  view  to  death. 

Williams  v.  Guile,  117  N.  Y.  343,  349;  22  N.  E.  1071. 

And  the  fact  that  the  donor,  a  physician,  was  seen 
making  a  stethoscopic  examination  of  his  own  chest  at 
about  the  time  of  the  gift  and  the  next  day  died  suddenly 
was  held  sufficient,  with  the  surrounding  circumstances 
to  show  the  "  contemplation  "  required  by  the  law. 

Matter   of   Dee,   161   App.   Div.    881;    145    Supp.    1120;    aff.,    210 

N.  Y.  625. 
See  also  Matter  of  Eundell,  decided  by  the  Appellate  Division,  Fourth 

Department,  July,  1917,  and  not  yet  reported. 

A  gift  of  property  made  by  the  donor  for  the  purpose 
of  so  reducing  his  estate  that  a  step-son  would  not  get 
it  from  his  mother,  when  the  donor  was  suffering  with 
Bright 's  disease,  was  held  a  gift  in  contemplation  of 
death. 

Ee  Estate  of  Benton,  234  111.  366;  84  N.  E.  1026. 

The  legal  contemplation  required  has  been  thus  denned 
in  a  well  considered  case  in  Wisconsin: 

"  It  is  manifest  the  words  wrere  intended  to  cover 
transfers  by  parties  who  were  prompted  to  make  them 
by  reason  of  the  expectation  of  death,  and  which,  in  view 


78  INHERITANCE  TAXATION 

of  that  event,  accomplish  transfers  of  the  property  of 
decedents  in  the  nature  of  a  testamentary  disposition. 
It  is  therefore  obvious  that  they  are  not  used  as  refer- 
ring to  that  expectation  of  death  generally  entertained 
by  every  person.  The  words  are  evidently  intended  to 
refer  to  an  expectation  which  arises  from  such  a  bodily 
or  mental  condition  as  prompts  persons  to  dispose  of 
their  property  and  bestow  it  upon  those  whom  they 
regard  as  entitled  to  their  bounty.  This  accords  with  the 
general  objects  and  purposes  of  the  law,  namely,  the 
imposition  of  a  tax  upon  the  devolution  of  property 
involved  in  the  demise  of  the  owner. 

State  v.  Pabst,  139  Wis.  561,  590;  121  N.  W.  351. 

The  adequacy  of  the  consideration  must  be  considered 
as  a  fact  bearing  on  the  "contemplation." 

Abstract  and  Title  Guarantee  Co.  v.  State  (Cal.),  141  Pac.  264. 

The  Illinois  court  took  a  similar  view: 

"A  gift  is  made  in  contemplation  of  an  event  when  it 
is  made  in  expectation  of  that  event  and  having  it  in 
view;  and  a  gift  made  when  the  donor  is  looking  forward 
to  his  death  as  impending,  and  in  view  of  the  event  is 
within  the  language  of  the  statute.  The  prep- 

aration of  the  will,  under  the  circumstances  and  in  view 
of  the  rapid  progress  of  the  disease,  is  strong  evidence 
that  death  was  expected  and  no  other  moving  cause  than 
the  expectation  of  death  is  apparent.  While  the  widow 
and  the  physician  testified  that  the  deceased  did  not 
expect  to  die  they  also  said  that  it  was  not  the  subject 
of  conversation  at  all,  and  in  view  of  his  condition  it 
is  a  fair  inference  that  he  was  not  so  dull  of  comprehen- 
sion as  to  suppose  he  would  get  well." 

Rosenthal  v.  People,  211  111.  306;  71  N.  E.  1121. 

In  a  California  case  when  the  decedent  was  suffering 
from  a  mortal  disease  at  the  time  of  the  gift  the  court 


PART  II  —  THE  TRANSFER  79 

said:  "  Coming  then  to  the  testimony  in  the  case,  we 
have  already  spoken  of  the  physical  condition  of  the 
deceased  and  of  his  knowledge  of  the  character  of  his  ail- 
ment. The  transfers  to  his  wife  were  admittedly  gifts, 
pure  and  simple.  They  were  made  prior  to  and  following 
an  operation  *  considered  absolutely  necessary  to  save  his 
life.'  Mrs.  Reynolds  speaks  of  the  transfers  to  her  as 
gifts  and  says  that  they  were  made  under  Mr.  Reynolds' 
promise  to  make  provision  for  her.  After  his  death  she 
filed  her  election  to  take  these  gifts  instead  of  the  benefits 
under  the  will.  All  this  was  done  under  the  agreement 
that  she  had  had  with  Mr.  Reynolds,  that  the  property 
given  to  her  was  in  lieu  of  all  righs  and  claims  which  she 
might  have  against  his  estate.  It  would  seem  to  be  clear 
beyond  peradventure  that  as  to  these  transfers,  they  were 
made  in  that  contemplation  of  death  which  the  law  desig- 
nates, and  that  they  were  gifts  in  life  substituted  for  gifts 
by  will." 

Estate  of  Reynolds,  169  Cal.  600;  147  Pac.  268. 

-  •— ^ 

All  the  cases  agree  that  contemplation  of  death  must  be 
the  impelling  motive  without  which  the  transfer  would 
not  have  been  made. 

People  v.  Burkhalter,  247  111.  600;  93  N.  E.  379. 

b.    ADVANCED  AGE  ALONE  INSUFFICIENT. 

\ 

Merely  that  the  deceased  had  reached  an  advanced  age 
is  not  sufficient  evidence  that  the  gift  was  made  in  contem- 
plation of  death.  So  it  was  held  when  there  were  several 
large  gifts  to  a  child  by  an  aged  parent,  sound  in  body  and 
mind,  they  could  not  be  subjected  to  the  tax  merely  because 
the  donor  had  reached  an  unusually  advanced  age.  The 
court  said:  "  The  gifts  were  a  perfectly  natural  dis- 
position of  his  estate  and  were  equally  as  consistent  with 
a  desire  to  see  his  daughter  and  family  enjoy  the  fruits 
of  his  accumulation  and  to  observe  the  use  they  made 
thereof  during  his  lifetime." 


80  INHERITANCE  TAXATION 

The  burden  is  on  the  public  officials  to  show  that  gifts 
were  made  in  contemplation  of  death.  A  gift  by  a  father 
eighty-six  years  old  in  good  health  was  not  made  in  con- 
templation of  death  in  In  re  Dessert's  Estate  (Wis.),  142 
N.  W.  647. 

State  v.  Thompson,  154  Wis.  320 ;  142  N.  W.  647. 

The  California  Court  has  recently  gone  a  step  further 
in  the  Matter  of  Spreckles,  30  Cal.  App.  363;  158  Pac. 
549,  where  Mrs.  Spreckles,  the  widow  of  the  "  Sugar 
King  "  put  her  millions  into  a  trust  and  gave  the  stock 
to  her  children  when  at  the  age  of  79  and  suffering  from 
a  dangerous  heart  disease.  She  died  within  a  month  after 
the  gifts.  The  court  acknowledged  that  it  was  a  close  case 
but  sustained  the  decision  of  the  trial  court  whereby  the 
estate  escaped  taxation  on  the  theory  that  though  the 
decision  might  be  against  the  weight  of  evidence  there 
was  some  testimony  to  support  it  and  therefore  it  could 
not  be  disturbed.  But  the  reasoning  of  the  court  practi- 
cally confines  such  gifts  to  gifts  causa  mortis  though 
former  cases  in  that  state,  as  we  have  seen,  have  repudi- 
ated that  rule.  In  reviewing  the  testimony  the  court  said  : 

"  In  support  of  appellant's  position  it  is  pointed  out 
that  Mrs.  Spreckles,  at  the  time  of  the  execution  of  the 
transfer  was  a  woman  of  venerable  years,  at  best  not  far 
removed  from  the  natural  end  of  her  life;  that  for  many 
years  prior  to  and  up  to  the  time  of  the  transfer  she  had 
been  a  chronic  sufferer  from  a  serious  and  dangerous 
heart  trouble  which  was  of  a  nature  that  from  it  her 
death  might  suddenly  occur  at  any  moment,  a  condition 
of  which  she  undoubtedly  possessed  a  keen  realization; 
that,  as  a  matter  of  fact,  her  death  occurred  within  a  few 
weeks  after  she  made  the  transfer." 

Conceding  that  this  testimony  would  bring  the  case 
within  the  statute  the  court  recapitulates  the  testimony 
produced  by  the  estate  as  follows: 


PART  II  —  THE  TRANSFER  81 

"  Shortly  after  her  husband's  death  in  1908,  Mrs.  Sprec- 
kles  expressed  her  intention  of  forming  a  corporation  for 
the  avowed  object  of  transferring  her  property  thereto. . 
She  had  often  declared  her  intention  of  giving  her  prop- 
erty to  the  plaintiffs,  and  to  Mr.  Rudolph  Spreckles, 
stated  her  wish  that  her  children,  the  plaintiffs,  should 
own  and  enjoy  the  property  in  her  lifetime.  These  ideas 
seemed  at  all  times  and  prior  to  the  date  of  the  transfers 
to  have  constituted  the  central  thoughts  of  her  mind  until 
their  crystalization  by  the  organization  of  the  investment 
company,  the  immediate  transfer  of  the  greater  part  of 
her  estate  thereto,  and  thereupon  the  transfer  of  the  stock 
therein  to  the  plaintiffs.  Under  the  circumstances  it  was, 
without  any  thought  of  her  own  death  or  without  any 
view  to  preparation  therefor,  a  most  natural  thing  to  do. 
At  her  then  advanced  age,  having  other  means  far  more 
than  necessary  for  her  own  maintenance  for  the  remain- 
der of  her  life,  she  doubtless  believed  that  she  would  in 
her  declining  days  be  happiest  if  relieved  of  the  heavy 
burden  and  serious  responsibilities  which  necessarily  go 
with  the  control  and  management  of  vast  and  varied  prop- 
erty interests  such  as  she  was  the  owner  and  possessor 
of  and  that  in  obtaining  release  from  their  burdens  her 
happiness  would  be  the  more  certainly  assured  by  trans- 
ferring her  property  to  her  children  so  that  they  might 
own  and  enjoy  it  during  her  lifetime.  While  she  was 
afflicted  with  a  serious  heart  affection  and  had  suffered 
intermittent  spells  of  illness  that  temporarily  confined 
her  to  her  bed,  it  is  evident  that  she  did  not,  at  any  time 
prior  to  the  date  of  the  transfers,  harbor  the  thought 
that  her  life  was  in  immediate  peril  from  her  malady,  or 
that  she  would  not  live  for  many  years  to  come." 

In  support  of  this  last  assertion  the  court  cites  the  fact 
that  the  deceased  was  repairing  her  residence  at  much 
expense  and  talked  of  going  to  Europe.  Under  the  court's 


82  INHERITANCE  TAXATION 

theory  nothing  short  of  proving  that  the  deceased  made 
the  transfers  on  her  death  bed  would  have  made  the  gift 
of  all  her  property  one  in  contemplation  of  death. 
[See  California  Statute  of  1917 — Appendix.] 

In  the  Matter  of  Mills,  172  App.  Div.  530;  158  Supp. 
1100;  aff.  219  N.  Y.  100,  the  donor  was  84  years  old  and 
in  failing  health,  unable  to  write,  and  barely  able  to  sign 
his  name,  but  gifts  of  $2,000,000  to  his  children  were  sus- 
tained as  not  taxable  though  he  died  ten  days  later. 

This  rule  has  proved  so  unsatisfactory  that  Surrogate 
Cohalan  of  New  York  County  has  promulgated  another 
doctrine  which  would  go  far  to  solving  a  problem  that 
has  provoked  drastic  legislation  of  doubtful  constitution- 
ality. In  Matter  of  Dunne,  N.  Y.  Law  Journal,  May  25, 
1914,  he  stated  the  doctrine  as  follows: 

11  When  a  person  reaches  the  age  of  80  years  and  makes 
a  gift  of  a  substantial  part  of  his  property,  the  presump- 
tion is  that  the  gift  is  made  because  the  donor  realizes 
that  in  the  ordinary  course  of  nature  he  cannot  survive 
much  longer  and  wishes  to  anticipate  the  effect  of  a  will 
or  the  intestate  laws  by  giving  his  property  to  those 
persons  who  would  be  legatees  under  a  will  or  beneficiaries 
under  the  intestate  laws.  If  such  gifts  were  not  taxable, 
the  provisions  of  the  Transfer  Tax  Law  could  be  nullified 
and  rendered  ineffective.  To  prevent  such  an  evasion 
of  the  law  the  statute  provides  that  such  gifts  shall  be 
taxable  in  the  same  manner  as  if  the  property  constitut- 
ing the  gift  were  transferred  by  will  or  under  the  intes- 
tate laws.  I  think  the  evidence  before  the  appraiser  was 
sufficient  to  warrant  his  finding  that  the  conveyance  of 
the  premises  by  the  decedent  to  her  son  Charles  Dunne 
constituted  a  gift  in  contemplation  of  death  and  that  it 
was  therefore  subject  to  a  transfer  tax." 


PART  II  — THE  TRANSFER  83 

c.  STATUTORY  TIME  LIMIT. 

It  was  to  cover  cases  like  those  of  Mills  and  Spreckles 
that  Judge  McElroy  in  his  able  work  on  "  Inheritance 
Taxation  "  made  this  suggestion,  at  page  109. 

"A  provision  in  the  statute  fixing  a  definite  time  prior 
to  death,  within  which  gifts  would  be  deemed  "  made  in 
contemplation  of  death,"  would  settle  all  contention  in 
respect  to  gifts  of  this  kind,  but  as  yet  the  wisdom,  or 
even  the  necessity,  of  such  a  provision  has  not  received 
the  consideration  of  the  Legislature." 

This  suggestion  has  been  adopted  by  Colorado,  Wis- 
consin and-  several  other  states  as  well  as  by  the  Federal 
Statute;  but  has  not  yet  been  construed  by  the  courts. 
There  may  be  some  question  as  to  its  constitutionality. 
If  a  young  man  in  good  health  deeds  his  home  to  his  wife, 
and  the  next  day  is  struck  by  lightning,  or  is  killed  in  an 
accident,  the  gift  would  be  taxable  under  such  a  statute. 
As  to  whether  the  courts  would  sustain  such  a  tax,  quaere? 

d.  TAX  ACCRUES  AT  DATE  OF  GIFT. 

Theoretically  the  tax  accrues  at  the  date  of  a  gift  in 
contemplation  of  death,  though  proceedings  are  in  prac- 
tice never  brought  to  collect  it  until  death  reveals  the 
facts.  It  would  seem  unjust  to  impose  interest  for  six 
years  when  the  gift  was  made  that  length  of  time  prior 
to  the  statute ;  but  such  is  the  logic  of  the  case. 
Matter  of  Hodges,  215  N.  Y.  447;  109  N.  E.  559. 

The  court  said: 

' '  Here,  however,  under  the  express  provisions  of  the  Tax 
Law  (§  222)  the  gift  of  bonds  and  securities  to  the  wife 
was  taxable  as  soon  as  it  was  made.  As  such  gifts  sel- 
dom become  known  to  the  taxing  authorities  until  after 
the  death  of  the  person  making  them  there  is  usually  no 
effort  to  tax  them  earlier;  but  this  fact  does  not  affect 
their  liability  to  earlier  taxation  if  ascertained." 


84  INHERITANCE  TAXATION 

4.  Gifts  to  Take  Effect  in  Possession  or  Enjoyment  at  or 
After  Death. 

a.     TRUST  DEED  RESERVING  INCOME  TO  DONOR. 

Where  the  grantor  reserves  to  himself  a  life  interest 
and  the  income  is  paid  to  him  the  gift  of  the  remainder 
interest  under  the  deed  is  a  taxable  transfer. 

Matter  of  Green,  153  N.  Y.  223;  47  N.  E.  292. 

Matter  of  Keeney,  194  N.  Y.  281;  "87  N.  E.  428;  aff.,  222  U.  S.  525. 

In  the  Keeney  case  Judge  Cullen,  writing  for  the  court, 
says  at  page  286: 

"  A  not  wholly  unnatural  desire  exists  among  owners 
of  property  to  avoid  the  imposition  of  inheritance  taxes 
upon  the  estates  they  may  leave  so  that  such  estates  may 
pass  to  the  objects  of  their  bounty  unimpaired.  It  is  a 
matter  of  common  knowledge  that  for  this  purpose  trusts 
or  other  conveyances  are  made  whereby  the  grantor  re- 
serves to  himself  the  beneficial  enjoyment  of  his  estate 
during  life.  Were  it  not  for  the  provision  of  the  statute 
which  is  challenged,  it  is  clear  that  in  many  cases  the  es- 
tate, on  the  death  of  the  grantor,  would  pass  free  from 
tax  to  the  same  persons  who  would  take  it  had  the  grantor 
made  a  will  or  died  intestate.  It  is  true  that  an  ingenious 
mind  may  devise  other  means  of  avoiding  an  inheritance 
tax,  but  the  one  commonly  used  is  a  transfer  with  reser- 
vation of  a  life  estate.  We  think  this  fact  justified  the 
legislature  in  singling  out  this  class  of  transfers  as  sub- 
ject to  a  special  tax." 

In  the  same  case  the  U.  S.  Supreme  Court  said,  Judge 
Lamar  writing  the  opinion: 

* '  There  is  no  natural  right  to  create  artificial  and  tech- 
nicial  estates  with  limitations  over,  nor  have  the  remainder 
men  any  more  right  to  succeed  to  possession  of  property 
under  such  deeds  than  legatees  or  devisees  under  a  will. 
The  privilege  of  acquiring  property  by  such  an  instru- 
ment is  as  much  dependent  upon  the  law  as  that  of  acquir- 


PABT  II— THE  TRANSFER  85 

ing  property  by  inheritance;  and  transfers  to  take  effect 
at  death  have  frequently  been  classed  with  death  duties, 
legacy  and  inheritance  taxes." 

Keeney  v.  New  York,  222  U.  S.  525,  533;  32  S.  Ct.  Rep.  105. 

To  the  same  effect  are; 

Matter  of  Bostwick,  160  N.  Y.  489;  55  N.  E.  208. 

Matter  of  Dana,  215  N.  Y.  461;  109  N.  E.  557. 

Matter  of  Seal,  167  App.  Div.  916;  151  Supp.  1103;  aff.,  215  N.  Y. 

620. 
Matter  of  Patterson,  146  App.  Div.  286;  130  Supp.  970;  aff.,  204 

N.  Y.  677. 

Mattel*  of  Ogsbury,  7  App.  Div.  71;  39  Supp.  987. 
Matter  of  Cowan,  N.  Y.  L.  J.,  July  24,  1913. 
New  England  Trust  Co.  v.  Abbott,  205  Mass.  279 ;  91  N.  E.  379. 
Re  Douglas  County,  84  Neb.  506;  121  N.  W.  593. 
Lines'  Estate,  155  Pa.  St.  378;  26  A.  728. 
Reisch  v.  Commonwealth,  106  Pa.  St.  521. 
Appeal  of  Seibert,  110  Pa.  St.  324;  1  A.  346. 
Lamb  v.  Morrow,  140  la.  89;  117  N.  W.  1118. 
State  v.  Bullen,  143  Wis.  512;  128  N.  W.  109;  aff.,  240  U.  S.  625. 

In  the  recent  case  of  Bullen  v.  Wisconsin,  240  U.  S.  625, 
(sustaining  State  v.  Bullen,  143  Wis.  512  supra)  the  whole 
subject  of  trust  deeds  reserving  life  use  and  power  of 
revocation  was  again  discussed.  In  this  case  the  decedent 
gave  a  fund  of  $1,000,000  to  a  Trust  Company  in  Illinois, 
reserving  a  part  of  the  income,  the  rest  to  his  wife  and 
four  sons  and  on  his  death  the  principal  to  them.  He 
also  reserved  a  right  to  revoke  and  a  right  to  control  the 
investment  of  the  fund.  He  then  incautiously  moved  to 
Wisconsin  and  changed  his  domicile  to  that  state  leaving 
the  corpus  of  the  trust  fund  in  Illinois.  Result;  the  fund 
was  taxed  in  both  states  and  the  heirs  appealed  to  the 
United  States  Supreme  Court  which  said,  in  sustaining 
both  taxes,  Mr.  Justice  Holmes  speaking  for  the  court 
at  page  630 : 

"  We  do  not  speak  of  evasion  because  when  the  law 
draws  a  line  a  case  is  on  one  side  of  it  or  the  other  and 


86  INHERITANCE  TAXATION 

if  on  the  safe  side  is  none  the  worse  legally  that  a  party 
has  availed  himself  to  the  full  extent  of  what  the  law 
permits.  When  an  act  is  condemned  as  an  evasion  what 
is  meant  is  that  it  is  on  the  wrong  side  of  the  line  indi- 
cated by  the  policy  if  not  by  the  mere  letter  of  the  law. 
What  we  do  say  is  that  the  Supreme  Court  of  Wisconsin 
was  fully  justified  in  treating  Bullen's  general  power  of 
disposition  as  equivalent  to  a  fee  for  the  purposes  of  the 
taxing  statute,  that  there  is  no  constitutional  objection 
to  its  doing  so,  and  that  although  Illinois  has  also  taxed 
the  fund,  as  it  might,,  we  are  not  aware  that  it  has 
attempted  to  qualify  the  effect  that  Wisconsin  has  given 
to  the  power  and  do  not  intimate  that  it  could  have  done 
so  if  it  had  tried. ' ' 

b.     WHEN  PART  OF  THE  INCOME  is  RESERVED. 

And  so  it  is  held  that  when  a  part  of  the  income  is 
reserved  the  remainder  created  is  taxable  pro  tanto,  where 
severdble. 

When  a  trust  deed,  not  made  in  contemplation  of  death, 
takes  effect  on  delivery  for  the  sole  benefit  of  the  cestui 
que  trustent  except  that  the  grantors  reserve  the  right  to 
themselves  or  the  survivor  to  an  annual  income  of  $2,400 
per  year  for  life,  the  court  may  separate  the  portion  to  take 
effect  in  presenti  and  in  futuro,  and  hold  that  so  much  of 
the  estate  conveyed  as  was  necessary  to  produce  an  annual 
income  of  $2,400  is  subject  to  an  inheritance  tax. 
People  v.  Kelly,  218  111.  509;  75  N.  E.  1038. 

So  where  a  trust  deed  was  made  before  the  statute, 
reserving  life  estate  with  remainders  subject  to  another 
life  estate  and  donor  died  after  statute,  remainder  vested 
and  so  not  taxable  —  intervening  life  estate  which 
accrued  at  death  of  donor,  taxable. 

People  v.  Carpenter,  264  111.  400;  106  N.  E.  302. 


PART  II  — THE  TRANSFER  87 

A  trust  deed  reserving  life  estate  made  by  a  non-resi- 
dent of  property  out  of  the  state  does  not  become  a  tax- 
able transfer  because  the  property  is  subsequently  in- 
vested in  New  York. 

Hatter  of  Dwight,  N.  Y.  L.  J.,  Oct.  8,  1911,  aff.  149  App.  Div.  912; 
133  Supp.  1119. 

c.  WHERE  LIFE  USE  is  WAIVED. 

It  has  been  held  in  Iowa  that  the  remainderman  may 
show  by  parol  evidence  that  the  donor,  subsequent  to  the 
delivery  of  the  deed,  waived  the  life  use,  and  that  an  abso- 
lute title  vested. 

Lamb  v.  Morrow,  140  La.  89;  117  N.  W.  1118. 

This  would  seem  to  open  a  wide  door  to  evasion  of  the 
tax  and  may  be  considered  of  doubtful  authority,  on  the 
question  of  varying  a  written  instrument  of  parol. 

d.  RESERVATION  OF  POWER  TO  EEVOKE. 

The  authorities  draw  a  sharp  distinction  between  deeds 
of  trust  reserving  a  life  use  where  there  was  reserved 
also  a  power  to  revoke  and  such  deeds  where  the  transfer 
was  absolute.  If  such  a  deed  contains  no  such  power  of 
revocation  it  took  effect  at  the  date  of  the  deed  and  if 
that  date  was  prior  to  the  statute  or  the  deceased  was  at 
the  time  a  non-resident  the  remainder  is  not  taxable  on 
the  death  of  the  life  tenant.  Or  where  the  statute  taxing 
intangibles  has  been  repealed  the  reverse  may  be  the 
result.  . 

Matter  of  Dwight,  N.  Y.  L.  J.,  Oct.  8,  911;  aff.,  149  App.  Div.  912; 

133  Supp.  1119. 

Matter  of  Meserole,  98  Misc.  105;  162  Supp.  414. 
Matter  of  Webber,  151  App.  Div.  539;  136  Supp.  83. 
Matter  of  Atterbury,  N.  Y.  L.  J.,  March  25,  1913. 
Matter  of  Agnew,  N.  Y.  L.  J.,  Dec.  13,  1913. 
Matter  of  Gibson,  N.  Y.  L.  J.,  March  3,  1914. 
Matter  of  Russell,  N.  Y.  L.  J.,  June  1,  1914. 
Matter  of  Curry,  N.  Y.  L.  J.,  May  27,  1914. 


88  INHERITANCE  TAXATION 

On  the  other  hand,  where  there  is  reserved  a  power  of 
revocation  the  gift  does  not  become  complete  until  the 
date  of  the  donor's  death  and  the  law  as  of  that  date 
applies : 

Matter  of  Bostwick,  160  N.  Y.  488;  55  N.  E.  208. 

Matter  of  Dana,  164  App.  Div.  45;  149  Supp.  417;  aff.  ?14  N.  Y.  710. 

Matter  of  Dana,  215  N.  Y.  461;  109  N.  E.  557. 

Matter  of  Hoyt,  86  Misc.  696 ;  149  Snpp.  91. 

Matter  of  Schermerhorn,  William  C.,  N.  Y.  L.  J.,  June  26,  1913. 

Matter  of  Caswell,  N.  Y.  L.  J.,  April  24,  1914. 

Matter  of  Ely,  149  Supp.  90. 

A  rather  pretty  problem  was  presented  for  solution 
in  Matter  of  Halves,  where  a  resident  of  Massachusetts 
made  a  trust  deed  in  1864  reserving  to  himself  the  income 
for  life  and  a  power  of  appointment  on  his  demise.  The 
deed  further  provided  that  if  he  failed  to  exercise  the 
power  of  appointment  the  property  should  be  distributed 
under  the  intestate  laws  of  Massachusetts.  Part  of  the 
trust  fund  was  subsequently  invested  in  New  York  securi- 
ties and  the  donor  died  prior  to  the  New  York  amend- 
ment of  1911  which  repealed  the  tax  on  such  securities,  with- 
out exercising  the  power  of  appointment  he  had  reserved. 

The  heirs  claimed  that  they  took  under  the  deed  and 
that  the  Massachusetts  statutes  of  distribution  should  be 
read  into  that  deed,  and  that  as  it  was  executed  in  1864, 
long  prior  to  any  inheritance  tax  statutes  in  either  New 
York  or  Massachusetts  that  their  succession  was  exempt 
from  tax.  The  New  York  County  surrogate  so  held;  but 
he  was  reversed  by  the  Appellate  Division  and  this  deci- 
sion was  affirmed  without  opinion  by  the  Court  of  Appeals 
July  12,  1917. 

Matter  of  Hawes,  162  App.  Div.  173;  147  Supp.  329;  aff.,  221  N.  Y. 


mem. 


It  was  held  in  Matter  of  Masury,  28  App.  Div.  580;  51 
Supp.  331,  aff.  159  N.  Y.  532;  53  N.  E.  1127,  that  the 
reservation  of  a  bare  power  to  revoke  where  the  income 


PART  II  —  THE  TRANSFER  89 

was  paid  to  the  donee  was  insufficient  to  prevent  the  vest- 
ing of  title  without  some  evidence  that  the  donor  intended 
to  exercise  it. 

The  Masury  case  was  distinguished  and  confined  to  its 
particular  facts  in  Matter  of  Bostwick,  160  N.  Y.  489;  55 
N.  E.  208.  The  court  said: 

"I  think  that  we  may  have  gone  too  far  in  generally 
affirming  the  Masury  decision ;  certainly  the  limit  was  then 
reached,  beyond  which  the  courts  could  not  go  without 
emasculating  the  provisions  of  the  statute.  We  thought 
there  were  some  reason  in  the  facts  of  the  Masury  case 
for  finding  an  intention  in  the  donor  to  make  an  absolute 
transfer  of  property  during  his  life,  which  the  mere  reser- 
vation of  a  power  to  revoke  was  of  itself,  insufficient  to 
negative.  But,  if  the  trust  transfers  now  in  question 
were  held  to  be  without  the  operation  of  the  act,  too 
dangerous  a  latitude  of  action  would  be  permitted  to  per- 
sons who  desired  to  evade  its  provisions  by  some  technical 
transfer,  which  would  still  leave  the  substantial  rights 
of  ownership  in  the  donor." 

The  later  cases  in  New  York  follow  the  Bostwick  case. 
Matter  of  Dana,  164  App.  Div.  45;  149  Supp.  417;  aff.  214  N.  Y.  710. 

In  Welch  v.  Treasurer,  217  Mass.  348;  104  N.  E.  726, 
the  donor  died  ten  years  prior  to  the  statute.  The  deed 
was  to  trustees  and  was  subject  to  a  possible  defeasance 
by  the  joint  action  of  the  trustees  and  Mr.  and  Mrs.  Lor- 
ing.  The  court  held  this  possibility  was  insufficient  to 
prevent  the  vesting  of  title.  It  said : 

"  The  plain  meaning  of  this  language  is  that  property 
whose  title  passed  before  the  date  when  the  statute  took 
effect,  is  not  affected  by  it.  For  determining  whether  this 
or  the  earlier  laws  should  apply,  a  definite  and  practical 
date  was  provided, —  that  of  death  where  the  property 
passes  by  will  or  under  the  intestate  succession  laws,  and 
that  of  the  deed  when 'the  title  so  passes.  This  section 


90  INHERITANCE  TAXATION 

applies  to  the  case  at  bar.  Almost  ten  years  before  the 
statute  became  operative  Mr.  Loring  irrevocably  and  com- 
pletely conveyed  away  all  his  right  and  title  in  this  prop- 
erty; and  at  that  time,  and  by  the  same  instrument,  the 
life  interest  of  the  petitioners  was  vested  in  them,  even 
though  it  was  subject  to  possible  defeasance  by  the  joint 
act  of  the  trustees,  Mr.  Loring,  and,  during  her  life,  Mrs. 
Loring.  As  between  the  grantor  and  the  trustees  the  con- 
veyance was  absolute,  as  he  had  no  more  power  to  revoke 
or  alter  the  deed  than  he  would  have  had  if  the  so  called 
power  of  revocation  had  not  been  inserted  therein." 

On  the  other  hand,  where  there  was  a  deed  to  trustees 
with  life  use  reserved  and  power  to  appoint  by  will,  the 
deed  being  made  before  the  statute,  and  the  deceased  died 
exercising  the  power  of  appointment  reserved  in  the  deed, 
held  taxable.  The  court  said: 

11  We  see  no  difference  in  principle  between  property 
passing  by  a  deed  intended  to  take  effect  in  possession  or 
enjoyment  on  the  death  of  the  grantor  and  property  passing 
by  will.  In  either  case  it  is  the  privilege  of  disposing  of 
property  after  the  death  of  the  grantor  or  testator  and 
of  succeeding  to  it  which  is  taxed,  though  the  amount  of 
the  tax  is  determined  by  the  value  of  the  property.  The 
constitutionality  of  the  law  in  regard  to  taxing  property 
passing  by  will  was  fully  considered  in  Minot  v.  Winthrop, 
162  Mass.  113;  38  N.  E.  512,  and  that  case,  we  think,  is 
decisive  of  this. 

1 '  It  is  immaterial,  it  seems  to  us,  in  this  case,  as  it  would 
be  in  the  case  of  a  will,  that  the  indentures  were  dated 
and  executed  before  St.  1891,  c.  425,  took  effect.  It  is 
the  vesting  of  the  property  in  possession  and  enjoyment 
on  the  death  of  the  grantor  and  after  the  statute  took 
effect,  that  renders  it  liable  to  the  tax,  and  both  of  those 
things  happened  in  this  case.  In  re  Green  and  In  re 
Seaman,  ubi  supra. 


PAET  II— THE  TRAXSFEB  91 

"  The  appellant  has  pointed  out  some  difficulties  that 
might  arise  in  a  supposable  case,  but  it  is  enough  to  say 
that  they  do  not  exist  in  this  case.  No  interest  vested 
in  this  case  either  in  possession  or  enjoyment  in  any  of 
the  legatees  till  after  the  death  of  the  grantor;  and  that 
did  not  happen  till  after  the  passage  of  St.  1891,  c.  425. 
It  was  held  in  Gushing  v.  Aylwin,  12  Mete.  169,  that  Rev. 
Sts.  c.  62,  §  3,  applied  to  a  will  made  before  that  law 
took  effect,  '  when  the  will  had  not  taken  effect,  before 
that  time,  by  the  death  of  the  testator.'  We  think  that 
that  case  applies  to  this,  and,  if  authority  is  needed, 
is  sufficient  to  justify  the  conclusion  to  which  we  have 
come.  It  is  true  that  in  New  York  there  is  an  express 
provision  by  which  the  statute  is  applicable  whether  the 
transfer  was  made  before  or  after  the  passage  of  the  act. 
But  we  think  that  the  conclusion  arrived  at  in  the  cases 
in  that  state  to  which  we  have  referred  would  have  been 
the  same  without  that  provision." 

Crocker  v.  Shaw,  174  Mass.  266;  54  N.  E.  549. 

And  this  is  the  universal  rule  in  other  states. 

State  v.  Bullen,  143  Wis.  512;  128  N.  W.  109;  aff.  240  U.  S.  625. 

Ee  Line's  Estate,  155  Pa.  St.  378;  26  A.  728. 

N.  E.  Trust  Co.  v.  Abbott,  205  Mass.  279;  91  N.  E.  379. 

In  the  Abbott  case  the  court  said: 

"  The  only  part  of  the  property  which  was  finally  dis- 
posed of  in  a  known  and  definitely  stated  way  was  the  in- 
come for  the  period  of  five  years.  The  disposition  of  the 
principal  was  left  subject  to  contingencies,  any  one  of 
three  of  which  might  terminate  the  trust  and  give  direc- 
tion to  the  payment  of  the  principal.  The  creator  of  the 
trust,  six  months  before  the  expiration  of  the  five  years, 
could  give  notice  of  his  intention  to  withdraw  the  princi- 
pal, or  the  Trust  Company  could  give  notice  of  its  inten- 
tion to  pay  it  off,  in  either  of  which  cases  the  money  would 


92  INHEKITAXCE  TAXATION 

be  returned  to  Marshall;  or,  if  Marshall  survived  and  no 
notice  was  given,  another  period  of  five  years  would  begin 
under  the  same  arrangement;  or  if  Marshall  died  before 
the  expiration  of  the  first  period  and  no  notice  had  been 
given,  the  trust  would  be  terminated  and  the  principal 
paid  off  to  Miss  Abbott  at  the  end  of  sixty  days  from  the 
expiration  of  the  period. 

"  She  had  a  vested  interest  in  the  income  until  the  ter- 
mination of  the  trust.  The  arrangement  in  regard  to  the 
principal  was  very  different.  Her  only  interest  in  that 
was  contingent,  and  she  was  not  to  enter  into  the  posses- 
sion and  enjoyment  of  it,  in  any  event,  until  after  the 
death  of  Marshall,  and  then  only  if  the  trust  had  not 
been  terminated  by  either  party  by  giving  notice  in  his 
lifetime. 

*  *  The  question  under  the  statute  is  whether  this  gift  of 
the  property  was  '  made  or  intended  to  take  effect  in 
possession  or  enjoyment  after  the  death  of  the  grantor.' 
We  think  it  plain  that  it  was.  Miss  Abbott  could  have 
no  possession  or  enjoyment  of  the  principal  until  after 
his  death.  The  fact  that  she  had  the  possession  and  en- 
joyment of  the  income  in  his  lifetime  makes  no  difference. 
In  that  respect  the  case  is  the  same  as  if  this  income  had 
been  given  to  another  person,  with  the  disposition  of  the 
principal  that  appears  in  the  agreement. ' ' 

So  where  a  right  was  reserved  "  to  alter,  change, 
modify  or  revoke  all  disposition  and  direction  as  to  trans- 
fer and  dispositions  made  and  to  be  made  of  said  prop- 
erty." Held  taxable. 

Line's  Estate,  155  Pa.  St.  378;  26  A.  728. 

D.— CONSIDERATION  AS  AFFECTING  TESTAMENT- 
ARY TRANSFERS. 

"  Transfers  by  deed,  grant,  bargain,  sale  or  gift,  made 
in  contemplation  of  death,  or  intended  to  take  effect  in 
possession  or  enjoyment  at  or  after  death."  Such  is  the 


PABT  II— THE  TRANSFER  93 

language  of  substantially  all  the  statutes  and  of  the  Fed- 
eral act.  Some  of  the  statutes  except  transfers  made  on 
"  adequate  "  consideration  or  "  bona  fide  consideration 
in  money  or  money's  worth." 

Are  such  transfers  taxable  when  made  on  consideration, 
without  reference  to  its  adequacy? 

The  problem  is  common  to  all  jurisdictions  where  in- 
heritance taxes  are  levied. 

In  the  early  cases  the  courts  were  inclined  to  the  doc- 
trine that  the  words  "  deed,  grant,  bargain  sale  "  meant 
nothing  or  meant  transfers  in  those  forms  which  w^ere 
in  fact  gifts. 

11  The    word    *  sale  '    includes    only    such    transactions 
which  though  in  for  *  sales  '  are  in  fact  gifts." 
Hagerty  v.  State,  55  Ohio  St.  613;  45  N.  E.  1046. 

"  The  words  refer  to  transfers  without  consideration 
which  become  operative  only  by  way  of  gift." 
Blair  v.  Herold,  150  Fed.  199;  aff.  158  Fed.  804. 

"It  is  very  evident  that  the  wrord  '  deed  '  as  used  in 
this  act  has  no  reference  to  a  conveyance  of  property  by 
such  an  instrument  made  in  the  ordinary  course  of  busi- 
ness for  a  valid  consideration,  but  is  confined,  to  convey- 
ances of  real  property,  intended  as  gifts." 

Matter  of  Birdsall,  22  Misc.  180;  49  Supp.  450;  aff.  43  App.  Div. 
624;  60  Supp.  1133. 

"  I  do  not  consider  that  the  Statute  has  reference  to 
transfers  made  upon  a  valuable  consideration,  for  the  tax 
is  not  one  upon  payment ;  but  upon  the  right  of  succession. 
The  payment  of  an  obligation  dependent  upon  valuable 
consideration  is  not  a  succession  in  any  sense." 
Matter  of  Miller,  77  App.  Div.  473;  78  Supp.  930. 

"  If  a  person,  fully  realizing  that  his  death  is  to  occur 
within  a  few  hours,  should  convey  by  deed  real  estate  and 


94  INHERITANCE  TAXATION 

receive  the  full  consideration  therefor,  it  would  not  be 
claimed  that  the  real  estate  so  conveyed  would  be  subject 
to  the  tax  in  question,  notwithstanding  the  conveyance 
was  clearly  made  in  contemplation  of  death." 

Matter  of  Spaulding,  49  App.  Div.  541;  63  Supp.  694;  aff.  163  N.  Y. 
607;  57  N.  E.  1124. 

11  The    transfer    related    to    in    this    subdivision   is    a 
gratuitous  transfer,  in  other  words  a  gift." 
Matter  of  Escoriaza,  N.  Y.  L.  J.,  Nov.  15,  1914, 

The  trend  of  the  authorities  however  has  been  to  a 
broader  construction  of  the  statute.  They  now  divide  such 
transfers  into  three  classes: 

1.  When  the  transaction  is  completed  inter  vivos  though 
payment  is  postponed  until  death; 

2.  Where  the  contract  is  executory; 

3.  When  the  consideration  is  inadequate. 

The  first  class  of  transfers  are  not  taxable;  the  second 
and  third  are. 

1.  Where  the  Transaction  is  Completed  Inter  Vivos. 

In  the  Matter  of  Thome,  44  App.  Div.,  p.  8;  60  Supp. 
419,  appeal  dismissed  162  N.  Y.  238,  there  was  a  completed 
transfer  of  $100,000  of  stock  in  the  American  Press  Asso- 
ciation upon  the  consideration  that  the  donee  would  sup- 
port the  donor  during  life.  ' '  It  amounted  to  the  purchase 
of  an  annuity,"  said  the  Court. 

In  the  Matter  of  Edgerton,  35  App.  Div.  125 ;  54  Supp. 
700,  aff.  158  N.  Y.  671 ;  52  N.  E.  1124,  there  was  a  com- 
pleted transfer  of  a  large  property  to  nieces  and  nephews 
upon  a  consideration  of  bonds  binding  them  to  support 
the  donor  during  life.  This  was  held  a  completed  transfer 
inter  vivos  and  also  amounted  to  an  annuity. 

In  the  Matter  of  Hess,  110  App.  Div.  476;  96  Supp.  990, 
aff.  187  N.  Y.  554  80  N.  E.  1111,  there  was  a  deed  of  land 


PAET  II  — THE  TRANSFER  95 

reserving  the  right  to  dwell  thereon  during  life  upon  con- 
sideration of  an  agreement  to  support  the  grantee.  Here 
again  appears  the  theory  of  an  annuity. 

To  the  same  effect  are: 

Matter  of  DanieU,  4  Misc.  29. 
Matter  of  Ilulse,  15  Supp.  770. 

In  an  ante-nuptial  contract  the  grantor,  in  consideration 
of  marriage,  deeded  the  property  in  trust,  reserving  a  life 
income  and  remainder  to  his  widow  or  his  son,  if  any.  The 
contract  was  made  prior  to  the  statute.  The  remainders 
being  thus  vested  the  transaction  was  held  completed  inter 
vivos  and  not  taxable. 

Matter  of  Craig,  181  N.  Y.  551;  74  N.  E.  1116. 

As  we  have  seen,  the  later  authorities  hold  a  trust  deed 
reserving  a  life  estate,  where  made  after  the  statute, 
taxable. 

Matter  of  Keeney,  194  N.  Y.  281;  87  N.  E.  428;  aff.  222  U.  S.  525. 

The  principle  is  well  illustrated  lay  a  recent  case  in 
Illinois : 

On  the  death  of  William  J.  Orendorff  intestate  his 
widow  and  his  three  sons  agreed  to  divide  his  property 
not  according  to  the  statutes  of  distribution  but  by  giving 
the  widow  a  life  estate  in  the  whole  property  and  on  her 
death  the  remainder  to  the  three  sons.  This  was  held  not 
a  contract  to  take  effect  at  death  but  an  agreement  com- 
plete inter  vivos  on  valid  consideration.  On  the  death 
of  the  widow  the  remainder  interest  in  the  three  sons  was 
held  not  subject  to  an  inheritance  tax.  The  court  said,  at 
page  254: 

"  In  view  of  the  interest  the  law  gave  her  in  her  hus- 
band's estate  there  was  ample  consideration  for  William 
J.  Orendorff 's  widow,  Mary  Orendorff,  to  sell  all  the 
interest  in  the  remainder  of  said  shares  of  stock  for  the 


96  INHERITANCE  TAXATION 

life  interest  that  was  given  her  by  said  agreement.  With- 
out question  Mary  Orendorff  and  her  sons,  after  her 
husband's  death,  could  by  agreement  acting  together,  dis- 
pose of  all  his  property  in  any  way  they  saw  fit.  An  abso- 
lute transfer  or  gift  of  property  left  by  William  J.  Oren- 
dorff, made  in  good  faith,  for  a  valuable  consideration,  at 
the  time  this  agreement  was  made,  or  at  any  time  before 
her  death,  would  not  be  subject  to  an  inheritance  tax  at 
the  death  of  Mary  Orendorff  as  part  of  her  estate." 
People  v.  Orendorff,  262  111.  246;  104  N.  E.  656. 

A  similar  case  arose  in  New  York  with  a  similar  result. 
Matter  of  Polhemus,  84  Misc.  332;  145  Supp.  1107. 

The  leading  case  in  New  York  presents  some  difficulties 
and  is  apt  to  mislead  if  not  carefully  analyzed,  and  it  has 
frequently  been  distinguished.  In  the  Matter  of  Baker, 
83  App.  Div.  530;  82  Supp.  390,  aff.  178  N.  Y.  575,  one 
Henry  B.  Baker  being  about  to  marry  entered  into  an 
ante-nuptial  contract  with  his  prospective  wife  whereby 
he  agreed  in  consideration  of  the  contemplated  marriage, 
to  presently  give  her  the  sum  of  $1,000,  and  if  the  mar- 
riage were  consummated  and  his  wife  outlived  him,  that 
he  would  provide  by  will  for  the  payment  of  $20,000  to  her 
out  of  his  estate.  The  wife  on  her  part  agreed  to  accept 
this  provision  in  lieu  of  her  dower  rights  in  her  husband's 
property.  Baker  died  intestate,  leaving  his  widow  and  a 
sister  who  was  his  next  of  kin  and  only  heir  at  law,  and 
by  agreement  between  them  the  $20,000  was  paid  to  the 
widow  out  of  the  estate.  The  question  was  whether  this 
sum  was  taxable,  and  it  was  held  that  it  was  not  because 
the  agreement  that  the  wife  should  be  paid  out  of  the 
estate  created  a  debt  payable  out  of  the  husband's  estate 
after  his  death. 

In  Logan  v.  WUtley,  129  App.  Div.  666;  114  Supp.  255, 
there  was  an  ante-nuptial  contract  precisely  similar  to 


PAST  II  — THE  TBANSFER  97 

that  in  the  Baker  case.  The  amount  to  be  paid  was  $10,000. 
The  husband  shot  and  killed  his  wife  and  then  committed 
suicide.  A  complaint  in  a  suit  by  the  wife's  next  of  kin 
was  sustained  by  the  Appellate  Division  on  the  theory 
that  it  was  in  the  nature  of  a  debt  against  the  estate  which 
was  good  and  valid,  although  the  wife  did  not  survive  her 
husband  by  reason  of  his  own  wrongful  act.  In  other 
words,  the  Court  held  that  it  was  not  a  claim  which  took 
effect  in  possession  and  enjoyment  after  the  husband's 
death  because  the  wife  never  in  fact  became  his  widow. 

The  principle  is  applied  in  the  matter  of  life  insurance. 
Where  the  policy  is  payable  to  the  estate  it  becomes  part 
of  the  estate  and  is  taxable. 

Matter  of  Knoedler,  140  N.  Y.  377;  35  N.  E.  601. 

But  where  the  proceeds  are  payable  to  a  beneficiary 
they  never  become  part  of  the  estate  and  the  contract  is 
not  one  covered  by  the  provisions  of  the  statute. 

Matter  of  Parsons,  117  App.  Div.  321;  102  Supp.  16& 
Tyler  v.  Treasurer  (Mass.),  115  N.  E.  300. 

The  distinction  between  two  classes  of  policies  —  those 
payable  to  the  insured  or  his  personal  representatives, 
and  those  payable  to  a  specific  beneficiary  —  is  clearly 
recognized  by  the  decisions.  In  the  first  class  the  contract 
is  made  for  the  benefit  of  the  insured  and  the  proceeds 
pass  to  his  personal  representatives  as  part  of  his  estate 
and  are  liable  for  the  payment  of  his  debts  and  legacies; 
while  in  the  latter  case  the  contract  is  made  for  the  benefit 
of  others,  and  the  proceeds  are  transferred  to  them  by 
the  terms  of  the  contract,  and  not  by  virtue  of  the  Statute 
of  Distributions  or  the  provisions  of  the  will  of  the 
insured. 

Heaton  on  Surrogate's  Courts,  p.  1100,  citing  Matter  of  Fay,  25 
Misc.  468;  55  Supp.  749. 


98  INHERITANCE  TAXATION 

2.  Where  the  Contract  is  Executory. 

A  distinction,  however,  arises,  where  the  contract  is 
executory  even  though  full  and  valid  consideration  be  paid. 
Matter  of  Kidd,  188  N.  Y.  274;  80  N.  E.  924. 

George  W.  Kidd,  being  about  to  marry  a  widow,  entered 
into  an  ante-nuptial  contract  with  her  whereby,  in  con- 
sideration of  the  marriage,  and  the  promise  of  his  expect- 
ant wife  to  turn  over  to  him  the  sum  of  $40,000,  he  agreed 
that  he  would  adopt  Grace  C.  Slocum,  her  daughter,  give 
her  his  name  and  make  her  his  heir,  and  if  there  should 
be  no  issue  of  the  marriage  (as  there  was  not)  that  he 
would  devise  and  bequeath  all  of  his  property  to  said 
Grace  C.  Slocum.  The  mother  fulfilled  her  part  of  the 
agreement,  but  Kidd  failed  to  fulfill  his  part,  leaving  at 
his  death  a  will  whereby  he  disposed  of  his  property 
otherwise  than  as  he  had  agreed.  Grace  C.  Slocum  (then 
named  Dickinson)  sued  to  establish  Kidd's  contract  for 
her  benefit,  and  succeeded  in  obtaining  a  judgment  that 
she  was  entitled  to  his  whole  estate.  The  question  was 
whether  the  property  thus  recovered  was  subject  to  a 
transfer  tax.  It  was  held  that  it  was.  It  was  pointed  out 
in  the  opinion  that  no  present  interest  in  the  estate  vested 
in  Miss  Slocum  by  virtue  of  Kidd's  agreement  with  her 
mother.  All  that  Kidd  agreed  to  do  was  to  leave  her 
whatever  he  might  have  when  he  died,  but  in  the  mean- 
time, while  he  could  not  have  conveyed  away  his  property 
in  fraud  of  her  rights,  he  might  have  entirely  consumed 
it  in  living  expenses  or  have  lost  it  in  speculation. 

This  case  overrules  Matter  of  Demers,  41  Misc.  470;  84 
Supp.  1109. 

These  principles  were  applied  and  the  distinction 
between  the  Baker  and  Kidd  cases  emphasized  in 

Matter  of  Cory,  177  App.  Div.  871;  164  Supp.  956;  aff.  121  N.  Y. 


PART  II  — THE  TKANSFEB  99 

Here  two  brothers,  long  associated  in  business  as 
copartners,  incorporated  their  business  and  issued  stock 
worth  $200  a  share,  each  brother  having  500  shares,  or, 3yn 
interest  worth  $100,000.  They  agreed  that  tijeWrvivor 
might  buy  of  the  estate  of  the  decedent  tji^  $160,000  inter- 
est for  $60  per  share  or  $30,000.  Tbe;<?eceased  brother, 

.»  «    J 

Charles,  ratified  the  agreement  by,, Will.  The  survi^ng 
brother,  John,  claimed  that  he  shdiiM'be  taye4'on^a /trans- 
fer of  $30,000  and  not  of  $100,000'  artd  tfesurrogate  so 
held.  In  the  course  of  its  opinion  reversing  this  decision 
the  Appellate  Division  said: 

* i  The  statute  imposed  a  tax  upon  the  *  transfer  by  deed, 
grant,  bargain,  sale  or  gift  *  *  *  intended  to  take  effect 
in  possession  or  enjoyment  at  or  after  death.'  The  trans- 
fer of  the  stock  of  John  M.  Cory  falls  exactly  within  the 
terms  of  the  act.  There  was  not  a  present  sale  of  the  stock 
from  Charles  Cory  to  his  brother,  but  merely  a  contract 
that  after  Charles  Cory's  death  John  M.  Cory  might  pur- 
chase the  stock  at  an  agreed  price.  We  are  of  the  opinion 
that  the  mutuality  of  obligation  assumed  by  the  brothers 
furnished  a  sufficient  consideration  for  their  mutual  agree- 
ment; but,  even  so,  the  agreement  constituted  merely  a 
mutual  bargain  for  the  sale  of  the  stock  after  the  death 
of  whichever  brother  should  first  die,  and  under  which  the 
transfer  of  ownership  could  not  take  effect  either  in  pos- 
session or  enjoyment  until  after  death.  In  fact,  so  long 
as  Charles  Cory  lived  he  could  at  any  time  have  sold  or 
otherwise  parted  with  the  stock  as  he  chose,  without 
violating  his  agreement  with  his  brother,  which  in  terms 
applied  only  to  the  stock  owned  by  the  brother  first  dying 
1  at  the  time  of  his  decease. '  Until  one  of  the  brothers  died 
the  contract  remained  wholly  executory,  and  after  death 
the  only  right  given  to  the  survivor  was  that  he  might  buy 
the  stock  from  the  estate  of  the  decedent,  paying  therefor 
sixty  dollars  per  share." 


100  INHERITANCE  TAXATION 

Two  days  after  the  Cory  case  had  been  affirmed  without 
opinion  by  the  Court  of  Appeals,  July  14,  1917,  the  Appel- 
late Division,  First  Department  handed  down  a  decision 
in  Matter  o/.Orvis  reversing  the  New  York  county  sur- 
rogate who  had  held  that  where  two  partners  entered  into 
an  agreement  *ti*at*  the  survivor  should  take  two  funds 
'aggregating  $1,000,000.  there  wras  no  tax  as  the  agreement 
wars' \ipoH  consideration- and  did  not  come  within  the  terms 
of  the  statute*  <fE;his  went  a  step  beyond  the  Cory  case.  Two 
justices  wrote  dissenting  opinions  (Shearn  and  Page)  and 
Justices  Smith  and  Dowling  concurred  with  Scott,  P.  J. 

As  this  is  a  pioneer  case  on  the  subject  the  majority 
opinion  is  given  in  full.  It  states  the  facts  sufficiently.  . 

SUPREME  COURT— APPELLATE  DIVISION. 

FIRST  DEPARTMENT,  JULY  14$  1917. 

FRANCIS  M.  SCOTT, 
VICTOR  J.  DOWLJNG, 
WALTER  LLOYD  SMITH, 
ALFRED  R.  PAGE, 
CLARENCE  J.  SHEARN,  JJ. 


In  the  Matter  of  the  Transfer  Tax  upon 
the  -Estate  of  CHARLES  E.  ORVIS, 
Deceased.  

COMPTROLLER  OF  THE  STATE  OF  NEW  YORK, 

Appellant. 

EDWIN  W.  ORVIS,  F.  HOWARD  SMITH  and 
WARNER  D.  ORVIS,  Executors, 

Respondents. 


APPEAL  by  State  Comptroller  from  an  order  fixing  a  trans- 
fer tax. 

Alexander  Otis,  for  appellant. 
Jabish  Holmes,  for  respondents. 


PART  II  —  THE  TRANSFER  101 

SCOTT,  J.  The  sole  question  involved  in  this  appeal  is 
as  to  the  taxability  of  two  certain  funds  established  by 
the  deceased,  Charles  E.  Orvis,  and  his  brother  and 
partner  in  business  Edwin  W.  Orvis. 

These  two  brothers  had  been  members  of  the  copartner- 
ship of  Orvis  Bros,  and  Co.,  and  on  January  2,  1911,  made 
a  mutual  agreement  in  the  following  form : 

"  Whereas,  it  is  the  desire  of  Charles  E.  Orvis  and 
Edwin  W.  Orvis,  founders  of  the  firm  of  Orvis  Brothers 
and  Co.,  to  provide  for  the  continuation  of  the  said  firm, 
by  the  survivor,  in  event  oi  the  death  of  either  of  them. 

"  Now  therefore  it  is  hereby  mutually  agreed  by  and 
between  said  Charles  E.  Orvis  and  Edwin  W.  Orvis,  ihat 
the  sum  of  five  hundred  thousand  dollars  shall  be  drawn 
from  the  profits  and  accumulations  of  the  said  firm,  here- 
tofore accrued,  and  shall  be  placed  to  the  credit  of  Founda- 
tion Account,  and  that  such  account  shall  be  owned  equally 
(half  and  half)  by  said  Charles  E.  Orvis  and  Edwin  W. 
Orvis,  and  it  is  hereby  expressly  and  distinctly  agreed  by 
and  between  the  parties  hereto,  that  in  the  event  of  the 
decease  of  either  of  them,  the  survivor  of  them  shall  be 
the  sole  owner  of  the  Foundation  Account,  and  the  heirs 
of  the  one  deceased  shall  have  no  right,  title,  interest  or 
claim  thereto.  And  it  is  hereby  further  agreed  that  to 
provide  against  any  impairment  of  the  said  Foundation 
Account,  an  equal  amount  of  five  hundred  thousand  dol- 
lars shall  be  placed  to  the  credit  of  Contingent  Account, 
and  it  is  expressly  and  distinctly  agreed  by  the  parties 
hereto  that  the  terms  of  this  agreement,  in  relation  to  the 
said  Contingent  Account  shall  in  every  respect  be  exactly 
the  same  as  the  terms  in  regard  to  the  Foundation 
Account,  as  hereinbefore  stated. 

"  In  witness  whereof  we  have  signed,  sealed  and 
delivered  this  agreement  on  the  second  day  of  January, 
1911." 


102  INHERITANCE  TAXATION 

The  two  funds  provided  for  by  this  agreement  were  set 
up  and  were  continued  until  the  death  of  Charles  E.  Orvis, 
by  which  time  the  so-called  Foundation  Account  had  been 
impaired  to  the  extent  of  $134,000,  the  Contingent  Account 
remaining  intact. 

As  will  be  seen  from  a  reading  of  the  agreement,  one- 
half  of  each  fund  was  owned  by  Charles  E.  Orvis  until  at 
his  death  it  passed  by  virtue  of  the  agreement  to  his 
brother  Edwin.  The  question  is  whether  or  not  a  tax 
should  be  levied  upon  this  transfer  or  devolution  of 
ownership.  The  learned  surrogate  held  that  it  should  not, 
because  the  agreement  under  which  the  devolution  or 
transfer  was  to  take  place,  rested  on  what  he  termed  a 
valuable  consideration,  such  consideration  being  found  in 
the  mutuality  of  the  agreement  whereby  the  brothers 
reciprocally  agreed  that  the  survivor  of  them  should  take 
the  interest  in  the  business  belonging  to  him  who  died 
first. 

That  this  does  furnish  a  sufficient  consideration  to  sup- 
port the  agreement  as  between  themselves  I  do  not  ques- 
tion, but  I  do  not  consider  that  that  fact  alone  establishes 
the  non-taxability  of  the  transfer.  Mutual  promises  may 
furnish  a  sufficient  consideration  for  a  promise  to  convey 
in  the  future,  but  if  there  be  no  other  consideration  the 
conveyance  when  it  takes  place  is,  in  effect,  a  voluntary 
one. 

Section  220  of  the  Tax  Law  imposes  a  tax  upon  a  trans- 
fer by  * '  grant,  sale  or  gift  —  intended  to  take  effect  in 
possession  or  enjoyment  at  or  after  such  death  ",  i.  e., 
that  of  the  grantor,  vendor  or  donor. 

This  language  seems  to  fit  exactly  the  present  case. 
Whether  the  transaction  be  considered  a  sale  or  a  gift,  it 
was  clearly  intended  to  take  effect  only  on  the  death  of 
the  vendor  or  donor,  and  not  then  unless  the  vendee  or 
donee  should  outlive  the  vendor  or  donor. 


PART  II  —  THE  TRANSFER  103 

Each  copartner  retained  the  sole  ownership  of  one-half 
of  the  moneys  going  to  make  up  the  two  funds,  just  as  he 
had  before  the  funds  were  set  up,  for  it  is  specifically 
provided  that  "  such  amount  shall  be  owned  equally 
(half  and  half)  by  said  Charles  E.  Orvis  and  Edwin  W. 
Orvis." 

The  effect  of  the  transaction  is  precisely  as  it  would 
have  been  if  each  brother  had  made  a  will  leaving  to  the 
other  his  interest  in  the  accumulated  and  funded  profits, 
providing  such  brother  survived.  In  such  case  no  one 
would  doubt  that  the  transfer  was  taxable. 

Under  the  terms  of  the  agreement  each  brother  retained 
the  sole  ownership  of  his  share  of  the  two  funds  and  was 
entitled  to  the  profits  arising  from  the  use  thereof.  The 
only  limitation  upon  his  ownership  was  that  he  could  not 
freely  dispose  of  the  funds  after  death,  if  he  happened  to 
pre-decease  his  brother.  All  the  elements  were  present 
that  have  led  to  the  taxation  of  property  conveyed  by 
trust  deeds  under  which  the  creator  of  the  trust  has 
retained  the  beneficial  title  of  the  property  during  life, 
and  has  disposed  of  the  remainder  after  death.  (Matter 
of  Green,  153  N.  Y.  223,  47  N.  E.  292;  Matter  of  Brandreth, 
169  N.  Y.  473,  62  N.  E.  563;  Matter  of  Cornell,  170  N.  Y. 
423;  63  N.  E.  445;  Matter  of  Keeney,  194  N.  Y.  581,  87 
N.  E.  428).  In  fact  the  agreement  was  essentially  testa- 
mentary in  character,  and  is  therefore  subject  to  the  trans- 
fer tax  law  (Matter  of  Dana,  164  App.  Div.  45 ;  149  Supp. 
417,  afFd.  214  N.  Y.  710). 

I  am  unable  to  distinguish  the  present  case  in  principle 
from  Matter  of  Kidd,  178  N.  Y.  274.  In  that  case  the 
testator  had  made  a  valid  ante  mortem  agreement  to  leave 
his  property  by  will  to  his  wife's  daughter.  He  attempted 
to  leave  it  otherwise,  but  the  agreement  was  upheld  and 
the  daughter's  right  to  receive  his  property,  at  his  death 
was  sustained,  but  it  was  held  that  the  transfer  was 


taxable.  That  case  and  this  are  clearly  distinguishable 
from  those  in  which  the  transfer  at  death  is  to  be  made  in 
payment  of  an  antecedent  debt,  as  in  Matter  of  Baker  (83 
App.  Div.  530;  77  Supp.  170,  aff'd.  178  N.  Y.  575),  or  in 
those  in  which  there  had  been  an  actual  completed  sale 
during  life  by  title  passed,  although  possession  was  to 
be  postponed  until  death  of  grantor  or  vendor.  Nothing 
of  the  sort  appears  in  the  present  case.  Charles  E.  Orvis 
distinctly  did  not  confer  title  upon  his  brother  during  his 
own  life,  for  it  is  expressly  agreed  that  he  should  continue 
to  own  half  of  the  two  funds,  and  whatever  consideration 
there  was  for  his  promise  that  the  brother  should  take 
the  whole  fund  at  death,  was  but  a  reciprocal  promise  in 
futuro  by  the  brothers  and  in  no  sense  a  -present,  valuable 
consideration  which  created  a  debt. 

In  my  opinion  the  order  should  be  reversed  with  costs 
and  disbursements  to  the  appellant,  and  the  matter 
remitted  to  the  Surrogates '  Court  for  entry  of  an  .order 
imposing  the  proper  tax  upon  the  transfer  in  question. 

Dowling  &  Smith,  JJ.,   concur. 

In  Matter  of  Keeney,  154  1ST.  Y.  281;  87  N.  E.  428;  aff. 
222  U.  S.  525,  the  transaction  was  by  a  deed  of  trust 
executed  four  years  before  decedent's  death;  she  con- 
veyed certain  bonds  and  stock  in  trust,  the  income  to  be 
paid,  one-fourth  to  her  during  her  life  and  three-fourths 
to  her  children ;  and  after  her  death  to  continue  to  pay  the 
income  or  pay  the  principal  to  the  children  or  their  issue. 
A  tax  upon  the  one-fourth  interest  of  which  ihe  decedent 
had  the  income  for  life  wTas  sustained  as  a  transfer  to  take 
effect  at  death.  The  opinion  does  not  show  what  the  con- 
sideration was  for  the  agreement,  but  being  under  seal 
consideration  is  presumed.  Judge  Cullen  used  this 
language  in  speaking  of  the  Statute:  "  It  may  also  be 
observed  that  if  the  statute  is  to  be  considered  as 
applicable  only  to  voluntary  gifts,  as  to  which  we  express 
no  opinion,  etc." 


PART  II  —  THE  TRANSFER  105 

In  Matter  of  Dana,  164  App.  Div.  45;  149  Snpp.  417; 
aff.  214  N.  Y.  710,  it  appeared  that  the  decedent  was  a 
stockholder  and  the  President  of  William  B.  Dana  Com- 
pany, and  five  years  before  his  death  he  surrendered  the 
certificate  for  his  shares  and  had  a  new  certificate  issued 
to  him  for  620  shares,  which  certificate  read  "  William  B. 
Dana  and  Jacob  Seibert,  Jr.,  and  the  survivor."  This  cer- 
tificate he  delivered  to  Seibert,  at  the  same  time  executing 
and  delivering  to  him  also  an  instrument  in  writing 
whereby  he  appointed  Seibert  trustee  of  such  shares  of 
stock,  reserving  to  himself  the  income  derived  from  the 
stock  and  the  right  to  revoke  the  trust  and  retake  the 
stock  at  any  time;  he  also  reserved  the  right  to  appoint 
a  new  trustee  and  to  dictate  how  the  stock  should  be  voted. 
The  court  imposed  a  tax  upon  the  transfer  as  a  transfer 
to  take  effect  at  death.  Some  evidence  was  given  showing 
that  the  inducing  cause  of  the  gift  was  services  which 
Seibert  had  rendered  to  the  William  B.  Dana  Company  in 
the  past  and  might  be  induced  to  render  in  the  future. 
But  the  fact  of  consideration  did  not  alter  the  result. 

The  cases  tending  to  support  the  view  here  presented 
are: 

Matter  of  Green,  158  N.  Y.  223;  47  N.  E.  292. 

Matter  of  Bostwick,  160  N.  Y.  489;  55  N.  E.  208. 

Matter  of  Brandreth,  169  N.  Y.  437;  62  N.  ,E.  563. 

Matter  of  Cornell,  170  N.  Y.  423;  63  N.  E.  445. 

Matter  of  Keeney,  194  N.  Y.  281;  87  N.  E.  428. 

Matter  of  Skinner,  45  M'isc.  559. 

Matter  of  Dobson,  73  Misc.  470;  132  Supp.  472. 

Matter  of  Burgheimer,  91  Misc.  468;  154  Supp.  943. 

Matter  of  Cruger,  54  App.  Div.  405;  66  Supp.  636;  aff.  166  N.  Y. 

602;  59  N.  E.  1121. 

Matter  of  Dana,  164  App.  Div.  45;  149  Supp.  417;  aff.  214  N.  Y.  710. 
Appeal  of  Waugh,  78  Pa.  St.  436. 

While  some  of  these  agreements  were  voluntary  several 
were  upon  consideration  and  nearly  all  the  others  were 
tinder  seal  importing  consideration. 


106  INHERITANCE  TAXATION 

They  were  all  bargains  to  take  effect  in  possession  or 
enjoyment  at  or  after  death  and  were  held  taxable  under 
the  Statute. 

In  addition  to  the  authorities  already  reviewed  there 
are  several  instances  where  a  tax  has  been  imposed  upon 
transfers  by  agreement  very  similar  to  the  one  in  the 
Cory  case  (supra). 

In  Matter  of  Burgheimer,  91  Misc.  468;  154  Supp.  943, 
the  decedent  agreed  with  his  brother  and  copartner  that 
on  the  death  of  either  the  survivor  should  take  the  good 
will  of  the  firm.  Neither  brother  had  any  interest  in  the 
other 's  share  of  the  good  will  until  after  death.  There 
\vere  also  mutual  wills  carrying  the  agreement  into  effect. 
Surrogate  Fowler  held  the  interest  in  the  good  will  owned 
by  the  deceased  brother  taxable. 

In  Matter  of  Skinner,  45  Misc.  559;  92  Supp.  972,  Sur- 
rogate Silkman  in  Westchester  County,  held  that  where  the 
decedent  five  months  before  his  death  transferred  by  deed 
all  of  his  real  and  personal  property  amounting  to  more 
than  $100,000  to  his  secretary  "  in  consideration  of 
services  heretofore  rendered  me  and  to  be  rendered  as  my 
private  secretary  and  business  manager,"  such  transfer 
was  taxable.  The  opinion  does  not  show  whether  there 
was  any  proof  taken  as  to  the  services  which  the  secretary 
had  or  did  render  under  this  contract ;  nor  was  such  proof 
necessary,  for  the  transfer  was  by  a  deed  under  seal,  so 
that  there  was  a  presumption  of  consideration  which 
could  only  be  rebutted  on  the  ground  of  fraud. 

In  Matter  of  Dobson,  73  Misc.  170 ;  132  Supp.  472,  Sur- 
rogate Sexton  of  Oneida  County  held  that  a  transfer  was 
taxable  where  the  decedent  deeded  to  her  cousin  with 
whom  she  was  living  $80,000  of  real  property,  in  con- 
sideration that  the  cousin  should  execute  a  lease  to  the 
grantor  for  her  lifetime,  and  which  lease  was  executed 
the  same  day.  A  tax  was  imposed,  the  surrogate  saying 


PART  II  — THE  TRANSFER  107 

that  it  was  not  a  bona  fide  sale  for  a  valuable  considera- 
tion, but  a  gift  by  deed  of  $80,000  worth  of  real  property 
for  such  companionship  and  care  as  she  might  feel 
equal  to. 

3.  The  Consideration  Must  be  Adequate. 

The  statutes  of  California,  Colorado,  Delaware,  Georgia, 
Kansas,  Maine,  Massachusetts,  Nevada,  Rhode  Island, 
Vermont,  Wisconsin  and  the  Federal  Act  now  provide 
that  a  transfer  taking  effect  at  death  must  be  upon 
adequate  consideration  and  most  of  them  add  in  "  money 
or  money's  worth." 

These  provisions  have  all  been  inserted  by  amendment 
within  the  last  two  or  three  years  and  there  are  but  few 
cases  construing  them. 

In  the  Estate  of  Reynolds,  169  Cal.  600;  147  Pac.  268, 
the  court  held  that  the  amendment  served  to  clarify  but 
not  to  change  the  pre-existing  law  and  applied  it  to  a  case 
arising  prior  to  the  amendment.  A  father  suffering  from  a 
mortal  disease  transferred  his  department  store  valued 
at  $100,000,  upon  consideration  that  his  son  should  assume 
the  debts  amounting  to  $30,000  and  pay  the  father  $600  a 
month  during  life.  The  court  said: 

'  *  If  it  can  be  said  that  there  was  any  element  of  valuable 
consideration  received  back  by  the  father  for  his  transfer 
to  the  son,  it  was  certainly  not  adequate  from  any  com- 
mercial point  of  view.  He  was  in  failing  health  at  the 
time  the  gift  was  made.  It  was  known  and  he  knew,  that 
his  tumor  had  returned  and  that  the  days  of  his  life  were 
numbered,  and  the  agreement  to  assume  an  indebtedness 
of  $30,000  in  consideration  of  a  gift  in  value  exceeding 
$100,000,  and  the  further  agreement  to  pay  $600  a  month 
during  the  donor's  life  (which  agreement  itself  does  not 
seem  to  have  been  observed)  certainly  do  not  measure  up 
to  the  requirements  of  the  law  of  a  valuable  and  adequate 


108  INHERITANCE  TAXATION 

consideration.  Indeed,  it  seems  to  be  quite  plain  that,  as 
in  the  case  of  the  widow,  so  in  the  case  of  the  son,  the 
father  in  contemplation  of  death  was  transferring  by  gift 
instead  of  devise  the  valuable  business  which  he  owned 
and  had  theretofore  conducted." 

A  similar  amendment  to  the  Massachusetts  Statute  has 
received  a  similar  construction: 

A  widow  advanced  in  years  and  in  feeble  health  desired 
to  secure  during  life  the  services  and  companionship  of  a 
certain  man,  fifty-four  years  of  age,  who  was  employed  as 
a  traveling  salesman  at  a  salary  of  $2,200  a  year  in  addition 
to  his  traveling  expenses.  In  consideration  of  his  resign- 
ing this  position  and  removing  with  his  wife  to  the 
widow's  residence,  where  they  continued  to  live  and  to 
care  for  her  until  her  death,  the  widow  deposited  with  a 
trustee  $100,000,  face  value,  of  three  and  one-half  per  cent, 
bonds  of  the  Commonwealth  of  Massachusetts,  with  a 
declaration  of  trust  directing  the  trustee  to  pay  the  income 
during  her  life  in  equal  shares  to  the  man  and  his  wife, 
and  upon  her  death  to  transfer  the  bonds  to  them  in  equal 
shares  absolutely  if  they  both  survived  her,  or,  in  case, 
at  the  time  of  the  settlor's  death  either  of  the  beneficiaries 
should  be  dead,  to  transfer  the  whole  of  the  bonds  to  the 
survivor,  or,  in  case  the  settlor  should  survive  both  the 
beneficiaries,  then  at  her  death  to  transfer  one-half  of  the 
bonds  as  one  of  the  beneficiaries  should  have  appointed  by 
his  will  and  the  other  half  as  the  other  beneficiary  should 
have  appointed  by  her  will,  or  in  default  of  appointment 
by  either  of  them,  to  his  or  her  next  of  kin.  A.t  the  time 
of  the  settlor's  death,  the  bonds  had  an  actual  market 
value  of  not  less  than  $90,000.  Upon  a  bill  in  equity  by 
the  trustee  for  instructions,  it  was  held  that  the  transfer 
of  the  bonds  under  the  deed  of  trust  did  not  constitute  '  *  a 
bona  fide  purchase  for  full  consideration  in  money  or 
money's  worth  "  within  the  exception  contained  in  St. 


PAST  II  —  THE  TRANSFER  109 

1909,  c.  490,  Part  IV  1,  and  consequently  that  the  transfer 
was  subject  to  a  succession  tax  under  that  statute. 

State  Street  Trust  Co.  v.  Treasurer,  209  Mass.  373;  95  N".  E.  851. 

4.  Burden  of  Proof. 

A  recent  case  in  California  holds  that  the  burden  of 
proof  is  on  the  comptroller  to  show  want  of  consideration. 

' '  The  act  in  question  does  not  impose  a  tax  generally 
upon  transfers  made  in  contemplation  of  death  or 
intended  to  take  effect  in  enjoyment  after  death.  It 
imposes  a  tax  only  upon  such  transfers  when  made  '  with- 
out valuable  and  adequate  consideration.'  The  absence 
of  the  consideration  is  just  as  essential  to  the  obligation 
to  pay  the  tax  as  the  contemplation  of  death  or  the  inten- 
tion of  the  transferrer  that  the  possession  or  enjoyment 
shall  be  postponed  until  death." 

McDongald  v.  Boyd,  172  Cal.  753,  757;  159  Pao.  168. 

The  language  of  the  California  statute  may  have  been 
unfortunate  but  it  certainly  is  not  the  intention  generally 
of  the  amendments  to  cast  a  fresh  burden  of  proof  upon 
the  state  in  the  collection  of  its  tax,  but  rather,  as  was 
said  in  the  Reynolds  case  "  to  explain  and  clarify  "  the 
law  as  it  already  existed.  Under  the  construction  in  the 
McDongald  case  the  amendment  would  seem  rather  to 
have  befogged  it ;  but  the  new  act  of  1917  is  worded  with 
view  to  this  decision.  (See  Appendix). 

E.—  POWER  OF  APPOINTMENT. 
1.  The  Common  Law  Rule. 

Transfers  under  powers  of  appointment  have  been  the 
subject  of  much  litigation.  It  was  the  original  theory 
of  the  law  as  to  such  transfers  that  the  exercise  of  a 
power  of  appointment  was  in  legal  effect  merely  the 
writing  into  the  blank  left  by  the  will  of  the  ancestor  the 


110  INHERITANCE  TAXATION 

names  of  the  appointees.  As  many  life  tenants  held 
powers  of  appointment  under  wills  probated  before  any 
inheritance  tax  statutes  had  been  enacted  many  courts 
applied  the  principle  that  the  tax  was  on  the  transfer  and 
could  not  affect  transfers  consummated  prior  to  its  enact- 
ment. 

Emmons  v.  Shaw,  171  Mass.  410;  50  N.  E.  1033. 
Matter  of  Karbeck,  161  N.  Y.  211;  55  N.  E.  850. 
Hoyt  v.  Hancock,  65  N.  J.  Eq.  688;  55  A.  1004. 

So  in  Kentucky  it  wras  held  that  a  contract  related  back 
to  the  original  will.  The  testator  devised  all  his  property 
to  his  mother  and  entered  into  a  written  contract  with 
her  that  in  consideration  of  the  devise  she  would  leave 
by  will  one-half  of  the  property  she  received  to  A.  B. 
The  testator  died  leaving  his  mother  surviving  and  on 
her  death  she  devised  the  property  in  accordance  with 
her  contract.  The  inheritance  tax  wras  passed  after  the 
making  of  the  contract  by  the  mother  and  before  her 
death,  and  the  court  holds  that  the  property  passing  to 
A.  B.  is  not  subject  to  the  tax.  The  court  says  that  read- 
ing the  will  and  contract  together  as  they  must  be  read, 
the  mother  took  a  life  estate  only  with  an  obligation  to 
leave  by  will  to  A.  B.  and  that  therefore  A.  B.  really  took 
under  the  will  of  the  testator  and  not  under  that  of  the 
mother. 

Winn  v.  Schenck,  33  Ky.  L.  Rep.  615,  110  S.  W.  827. 

In  Maryland  it  is  held  that  the  tax  is  on  the  right  to 
receive  and,  therefore,  the  appointees  must  pay  the  tax 
under  the  exercise  of  the  power  on  the  value  of  the  prop- 
erty when  so  received. 

Fisher  v.  State,  106  Md.  104;  66  A.  661. 

The  majority  of  the  states  however  follow  the  rule  in 
Matter  of  Harbeck,  supra,  where  no  statute  has  inter- 
vened. 


PAKT  II  —  THE  TKANSFER  111 

2.  The  Statutory  Rule. 

In  order  to  reach  the  transfer  of  property  under  such 
powers  New  York  in  1897  amended  the  statute  and 
declared  that  the  tax  should  be  imposed  upon  the  exercise 
of  the  power  in  the  same  way  as  though  the  property 
belonged  absolutely  to  the  donee  of  the  power.  (Chapter 
284,  L.  1897). 

This  was  sustained  in 

Matter  of  Potter,  51  App.  Div.  512;  64  Supp.  1013. 

Matter  of  Vcmderbilt,  50  App.  Div.  246;  63  Supp.  1079;  aff.  163 

N.  Y.  597;  57  N.  E.  1127. 
Matter  of  Dows,  167  N.  Y.  227;  60  N.  E.  439;  sus.  sub.  nora.  Orr  v. 

Oilman,  183  U.  S.  278. 
Matter  of  Brooks,  32  Supp.  176. 

And  also  as  to  the  exercise  of  a  power  under  a  deed 
made  prior  to  the  statute  taxing  inheritances. 

Matter  of  Delano,  176  N.  Y.  486;  68  N.  E.  871;  sus.  sub.  nom.  Chan- 
ler  v.  Kelsey,  205  U.  S.  466. 

Under  the  common  law  rule  relationship  to  the  donor 
and  not  the  donee  determined  the  rate  of  tax. 
Gallard  v.  Winans,  111  Md.  434-472;  74  A.  26. 

But  under  the  statute  the  rule  is  reversed. 

Matter  of  Walworth,  66  App.  Div.  171;  72  Supp.  984. 
Matter  of  Rogers,  172  N.  Y.  617;  64  N.  E.  1125. 
Matter  of  Seaver,  63  App.  Div.  283;  71  Supp.  544. 

The  statute  also  provided  that  even  if  the  donee  of  the 
power  failed  to  exercise  it  the  transfer  should  be  taxed 
in  the  same  manner  as  if  the  donee  had  owned  the  prop- 
erty. 

This  provision  has  been  the  subject  of  much  litigation 
and  divergent  rules. 

3.  The  New  York  Rule. 

The  provision  first  came  up  for  construction  in  Matter 
of  Lansing,  182  N.  Y.  238;  74  N.  E.  882.  The  donee  of 


112  INHERITANCE   TAXATION 

the  power  exercised  it  but  she  appointed  the  same  person 
who  would  have  received  the  property  in  default  of  its 
exercise.  The  court  held:  first,  that  the  exercise  of  the 
power  was  a  nullity  as  it  made  no  change  in  the  devolu- 
tion of  the  property  and  the  appointee  might  elect  to 
take  under  the  will  of  the  ancestor;  secondly,  Judge 
Vann,  writing  for  the  court,  said:  "  We  pass  without 
serious  discussion  that  part  of  the  Statute  which  pro- 
vides, in  substance,  that  the  failure  or  omission  to  exer- 
cise a  power  of  appointment  subjects  the  property  to  a 
transfer  tax  in  the  same  manner  as  if  the  donee  of  the 
power  had  owned  the  property  and  had  devised  it  by 
will  (L.  1897,  ch.  284,  Sec.  220,  Subd.  5).  Where  there  is 
no  transfer  there  is  no  tax  and  a  transfer  made  before 
the  act  relating  to  taxable  transfers  is  not  affected  by 
it  because,  as  we  held  in  the  Pell  case,  such  an  act  imposes 
a  direct  tax  and  is  unconstitutional  since  it  diminishes  the 
value  of  vested  estates,  impairs  the  obligation  of  con- 
tracts and  takes  private  property  for  public  use  without 
compensation.,' ' 

Judges  Cullen,  O'Brien  and  Bartlett  concurred,  Judges 
Werner  and  Haight  dissented  and  Judge  Gray  was  absent. 

4.  The  Massachusetts  Rule. 

Meanwhile  the  section  of  the  New  York  Statute  thus 
declared  unconstitutional  had  been  copied  and  is  still 
retained  in  the  statutes  of  Colorado,  Connecticut,  Idaho, 
Illinois,  Massachusetts,  Minnesota,  Ehode  Island,  South 
Dakota,  and  Wisconsin. 

The  Supreme  Court  of  Massachusetts  refused  to  follow 
the  rule  laid  down  by  the  New  York  Court  of  Appeals 
and  sustained  the  provision  which  was  declared  uncon- 
stitutional in  the  Lansing  case,  and  which  had  been 
adopted  in  Massachusetts  by  Chapter  527,  Sec.  8,  Laws  of 
1909. 


PAET  II  — THE  TRANSFER  113 

The  question  first  arose  in  Minot  v.  Treasurer,  207  Mass. 
588;  93  N.  E.  973.  The  court  reasoned  thus: 

' '  It  is  but  a  short  step  further  to  apply  the  second  part 
of  the  statute,  which  refers  to  coming  into  succession 
through  the  conduct  of  the  donee  in  refusing  or  omitting 
to  make  an  appointment  that  might  carry  the  succession 
elsewhere.  While  he  has  the  power  of  appointment,  he 
is  in  control  of  the  succession.  He  may  allow  it  to  go  to 
the  persons  named  in  the  will  or  deed,  or  he  may  trans- 
mit it  elsewhere.  By  exercising  the  power  he  may  give 
his  own  creditors  the  benefit  of  it  after  his  death.  When 
property  is  held  subject  to  such  possibilities  of  disposi- 
tion, is  it  usurpation  or  an  unlawful  interference  with 
vested  rights  for  the  Legislature  to  say  that  the  succession 
in  possession  and  enjoyment  is  not  yet  determined,  that 
it  belongs  to  no  one  until  it  is  determined  that  the  deter- 
mination of  it  depends  upon  the  will  and  conduct  of  the 
donee  of  the  power,  and  that  when  it  is  determined  by  his 
conduct,  either  by  action  or  by  refraining  from  action,  it 
shall  be  subject  to  a  tax?  We  think  it  is  in  the  power  of 
the  Legislature  to  say  in  reference  to  succession  in  pos- 
session after  the  death  of  the  persons  whose  decease  is 
awaited,  that  property  so  held  is  not  vested  in  anybody, 
and  that  when  it  vests  in  possession,  through  a  proper 
disposition  of  it  which  is  dependent  upon  the  will  and 
conduct  of  the  donee,  a  succession  tax  shall  be  imposed. 
We  think  that  Chanler  v.  Kelsey,  ubi  supra,  looks  in 
this  direction,  although  it  does  not  discuss  this  particular 
subject.  The  decision  in  M offit  v.  Kelly,  218  U.  S.  400,  pub- 
lished since  the  argument  in  the  present  case,  is  almost 
if  not  quite,  decisive  of  the  question. 

"  The  decision  to  the  contrary  in  re  Lansing,  182  N.  Y. 
238;  74  N.  E.  882,  was  by  four  of  the  judges,  two  others 
dissenting  in  a  well  reasoned  opinion.  So  the  decision 
in  the  Matter  of  Chapman,  133  App.  Div.  (N.  Y.)  337;  117 


114  INHERITANCE  TAXATION 

Supp.  679,  which  was  afterwards  affirmed  by  the  Court 
of  Appeals  in  196  N.  Y.  561,  without  an  opinion,  was  by 
three  judges,  while  two  others  joined  in  a  dissenting 
opinion. ' ' 

The  above  has  been  followed  in  the  later  case  of  Burn- 
ham  v.  Treasurer,  212  Mass.  165;  98  N.  E.  603,  and  in 
the  very  recent  case  of  Montague  v.  State,  163  Wis.  58; 
157  N.  W.  508.  It  may  be  safely  assumed  that  the  courts 
of  the  states  which  follow  the  language  of  the  original 
New  York  Statute  will  sustain  it  and  follow  the  Massa- 
chusetts doctrine. 

On  the  other  hand,  the  portion  of  the  section  declared 
unconstitutional  in  the  Lansing  case  was  omitted  from 
the  statute  in  1911  and  the  section  as  thus  amended  has 
been  copied  by  Arkansas,  Indiana,  Oklahoma  and  West 
Virginia,  all  very  recent  statutes  yet  to  be  construed. 
It  is  to  be  assumed  they  will  sustain  it  and  follow  the 
New  York  rule. 

5.  Development  of  the  New  York  Rule. 

,  The  rule  that  wThen  the  exercise  of  the  power  makes 
no  material  change  from  the  devolution  under  the 
ancestor's  will,  in  default  of  its  exercise,  the  appointee 
may  elect  to  take  under  the  will  of  the  ancestor  who  died 
prior  to  the  statute  and  thus  avoid  the  tax  has  led  to 
much  litigation  in  which  the  Lansing  case  has  been  sus- 
tained and  applied. 

Matter  of  Backhouse,  110  App.Div.  737;  96  Supp.  466;  aff.  185  N.  Y. 

544;  77  N.  E.  1181. 

Matter  of  Spencer,  190  N.  Y.  517;  83  N.  E.  1132. 
Matter  of  Haggerty,  128  App.  Div.  479;  112  Supp.  1017;  aff.  194 

N.  Y.  550;  87  N.  E.  1120. 
Matter  of  Chapman,  61  Misc.  593;  115  Supp.  981;  aff.  199  N.  Y.  562; 

93  N.  E.  1118. 

Matter  of  Haight,  152  App.  Div.  228;  136  Supp.  557. 
Matter  of  Hoffman,  161  App.  Div.  836;  146  Supp.  808;  aff.  212  N.  Y. 

604. 
Matter  of  Lewis,  194  N.  Y.  550;  88  N.  E.  1124. 


PART  II  — THE  TRANSFER  115 

Where  the  donee  of  the  power  makes  material  changes 
in  the  devolution  the  rule  in  the  Lansing  case  does  not 
apply. 

Matter  of  Cooksey,  182  N.  Y.  92;  74  N.  E.  880. 

But  where  the  exercise  of  the  power  disposed  of  one- 
fifth  of  the  property  otherwise  than  it  would  have  gone 
under  the  ancestor's  will  in  default  of  its  exercise;  the 
tax  attaches  only  to  that  one-fifth;  the  rest  passes  under 
the  ancestor's  will. 

Matter  of  Eipley,  122  App.  Div.  419;  106  Supp.  844;  aff.  192  N.  Y. 
536;  84  N.  E.  1120. 

And  where  the  donee  exercised  the  power  to  pay  her 
own  debts  out  of  the  fund  and  left  the  balance  to  the 
same  persons  who  would  have  received  it  in  default  of 
the  power  the  tax  is  payable  on  the  appointment  to  the 
creditors  but  the  beneficiaries  may  elect  to  take  the  bal- 
ance under  the  ancestor's  will. 

Matter  of  Slosson,  216  N.  Y.  79;  110  N.  E.  166. 

In  default  of  the  power  the  remainder  passed  to  the 
"  children  >!  of  the  donor  of  the  power.  The  donee 
appointed  her  sister's  children  who  were  grandchildren 
of  the  donor.  The  word  "  children  "  in  the  donor's  will 
could  not  be  held  to  include  "  grandchildren  "  and  the 
latter  did  not  take  under,  the  ancestor's  will  but  under 
the  exercise  of  the  power  and  their  shares  were  taxed. 
Matter  of  King,  217  N.  Y.  358;  111  N.  E.  1060. 

Election  to  take  under  the  will  of  the  ancestor  will  be 
presumed  where  it  avoids  the  tax. 

Matter  of  Mitchell,  N.  Y.  L.  J.,  Nov.  22,  1913. 

But  a  beneficiary  under  a  power  of  appointment  can- 
not accept  its  benefits  in  part  and  as  to  the  rest  elect  to 
take  under  the  will  of  an  ancestor. 

Matter  of  Isabel  Brush,  N.  Y.  L.  J.,  April  26,  1917. 


116  INHERITANCE  TAXATION 

Nor  can  they  actually  receive  the  property  under  the 
exercise  of  the  power  and  yet  claim  to  take  it  under  the 
will  of  the  donor  for  purposes  of  the  transfer  tax. 
Matter  of  Warren,  62  Misc.  444;  116  Supp.  1034. 

6.  Construction  of  Wills. 

It  frequently  becomes  a  serious  question  whether  a 
power  has  been  conferred  or  whether  the  provisions  of 
the  will  do  not,  in  fact,  confer  a  fee  with  remainders  over 
that  are  void. 

In  recent  case  of  Appeal  of  Luques,  114  Me.  235;  95 
A.  1021,  the  ancestor,  who  died  before  the  statute,  gave 
property  to  his  wife  absolutely  but  provided  that  if  she 
should  not  dispose  of  it  during  life  or  by  will  then  his 
sons  should  take.  The  widow  devised  to  the  sons  but  the 
court  held  they  could  not  elect  to  take  under  the  ancestor's 
will  as  the  bequest  to  their  mother  was  absolute  and  the 
remainder  over  void. 

On  the  other  hand  in  a  recent  Arkansas  case  a  husband 
devised  a  life  estate  to  his  wife  with  power  to  appoint 
"  during  life."  She  appointed  by  will.  It  was  held  that 
the  exercise  of  the  power  was  void  and  that  the  property 
passed  under  her  husband's  will  who  died  before  the 
statute  and  hence  was  exempt  from  tax. 

State  ex  rel.  McDaniel  v.  Gaugan,  124  Ark.  548;  187  S.  W.  918. 

So,  in  a  recent  Kentucky  case  a  life  estate  was  devised 
with  power  to  appoint  but  in  such  language  that  it  was 
held  the  life  estate  was  enlarged  to  a  fee  and,  therefore, 
the  appointees  could  not  take  under  the  ancestor's  will. 

Commonwealth  v.  Stoll's  Estate,  132  Ky.  234;  114  S.  W.  279;  116 
S.  W.  687. 

7.  Questions  of  Residence. 

If  the  donor  died  in  a  state  where  the  transfer  is  taxed 
only  upon  exercise  of  a  power,  obviously  no  tax  can 
accrue.  If  the  donee  has  moved  to  a  state  where  the  tax 


PART  II  — THE  TRANSFER  117 

is  against  the  estate  of  the  donor  —  also  no  tax  can  accrue. 
This  and  other  possible  complexities  have  produced  some 
puzzling  questions. 

Where  the  donor  of  the  power  resided  in  another  state 
and  the  property  subject  to  the  power  was  in  the  hands 
of  a  trustee  in  another  state  the  exercise  of  the  power 
by  a  resident  is  not  subject  to  the  tax. 

Walker  v.  Treasurer,  etc.,  221  Mass.  600;  109  N.  E.  647. 

The  test  to  be  applied  is  * '  Would  the  property  have  been 
taxable  if  it  had  belonged  to  the  donee  of  the  power?  ' 
So  where  a  non-resident  donee  exercised  the  power  over 
a  trust  fund  in  the  possession  of  Massachusetts  trustees 
shares  of  stock  in  a  foreign  corporation  in  possession  of 
those  trustees  held  not  taxable. 

Clark  v.  Treasurer,  etc.,  218  Mass.  292;  105  N.  E.  1055. 

Exercise  of  power  by  non-resident  donee  taxed  only  as 
to  taxable  assets  within  the  state  though  the  donor  of 
the  power  was  a  resident. 

Matter  of  Fearing,  138  App.  Div.  881;  123  Snpp.  396;  aff.  200  N.  Y. 
340;  93  N.  E.  956. 

The  donor  of  the  power  died  a  resident.  His  wife,  the 
donee,  moved  to  New  Jersey  and  there  died  exercising  the 
power.  Taxed  only  as  against  taxable  property  of  a  non- 
resident within  the  state. 

Matter  of  Kissel,  65  Misc.  443;  121  Supp.  1088;  aff.  142  App.  Div. 
134;  127  Supp.  1217. 

Where  a  resident  donee  exercised  the  power  over  per- 
sonal property  without  the  state,  held:  taxable. 

Matter  of  Hull,  111  App.  Div.  322;  97  Supp.  701;  aff.  186  N.  Y.  586; 
79  N.  E.  1107. 

Acting  under  a  power  of  appointment  in  a  will  executed 
by  his  mother  in  Kentucky  a  testator  residing  in  Minne- 
sota exercised  the  power  by  will  in  favor  of  nephews 
residing  in  Tennessee.  The  property  was  in  the  custody 


118  INHERITANCE  TAXATION 

of  a  resident  of  Kentucky.  Held:  that  the  tax  was  on 
the  transfer  as  though  the  property  belonged  to  the  donee 
and  the  transfer  was,  therefore,  taxable  in  Minnesota, 
citing  Matter  of  Hull,  supra. 

State  v.  Probate  Court,  124  Minn.  508;  145  N.  W.  390. 

Where  the  power  was  created  by  will  of  a  non-resident 
and  exercised  by  will  of  a  resident,  held:  taxable. 
Matter  of  Frazier,  N.  Y.  L.  J.,  March  28,  1912. 

Bonds  and  mortgages  on  New  York  real  estate  trans- 
ferred by  a  non-resident  under  the  exercise  of  a  power 
where  there  had  been  an  intervening  life  estate,  held: 
taxable  under  statute  in  force  at  date  of  creating  of  the 
power. 

Matter  of  Warden,  94  Misc.  563 ;  157  Supp.  1111. 

For  questions  arising  under  the  taxation  of  transfers 
by  power  of  appointment,  see  post  Part  III  D  Life  Estates 
and  Remainders. 

F.—  COMMON  LAW  TRANSFERS. 

Transfers  pursuant  to  the  provisions  of  the  common 
law  are  generally  held  not  taxable  under  the  usual  lan- 
guage of  the  statutes  taxing  inheritances  and  must  be 
specified  in  the  act  if  they  are  not  to  escape  taxation. 

1.  Dower. 

A  widow  does  not  take  dower  as  heir  of  her  husband 
and  it  does  not  pass  by  intestate  law. 

Matter  of  Weiler,  122  Supp.  608;  aff.  139  App.  Div.  905;  124  Supp. 

1133. 

Matter  of  Church,  80  Misc.  447;  142  Supp.  284. 
McDaniel  v.  Byrkett,  120  Ark.  295 ;  179  S.  W.  491. 
Estate  of  Sanford,  91  Neb.  752;  137  N.  W.  864. 
Matter  of  Bullen  (Utah),  151  Pac.  533. 
Sandford  v.  Jackson,  10  Paige  266. 
Konvalinka  v.  Schlegel,  104  N.  Y.  125;  9  N.  E.  868. 
Gray  V.  Gray,  5  App.  Div.  132;  39  Supp.  57. 
Kimbel  v.  Kimbel,  14  App.  Div.  570;  43  Supp.  900. 


PABT  II  — THE  TRANSFER  119 

The  dower  interest  is  allowed  as  a  deduction  unless  a 
bequest  is  accepted  in  lieu  of  dower  in  which  case  no 
dower  is  set  off  and  the  bequest  in  lieu  of  dower  is  tax- 
able. 

Matter  of  Gordon,  172  N.  Y.  25;  64  N.  E.  753. 
Matter  of  Riemann,  42  Misc.  648 ;  87  Supp.  731. 
Matter  of  De  Graaf,  24  Misc.  147 ;  53  Supp.  591. 
Matter  of  Barbey,  114  Supp.  725. 

Nice  questions  often  arise  as  to  whether  the  bequest 
is  intended  to  be  in  lieu  of  dower  or  in  addition  to  dower. 
The  intent  of  the  testator  governs  and  usually  when  the 
entire  life  use  is  given  it  is  held  that  dower  cannot  also 
have  been  intended. 

Matter  of  Vimanti,  63  Misc.  618;  118  Supp.  680;  aff.  206  N.  Y.  656. 

So  where  the  decedent  gave  his  widow  the  life  use  of 
all  his  realty,  after  the  payment  of  all  taxes,  insurance 
and  repairs  out  of  the  personal  estate  it  was  held  that  he 
could  not  have  intended  also  to  give  one-third  of  the  life 
use  of  the  same  property  —  or  four  thirds  of  the  life  use. 

Matter  of  Foster,  N.  Y.  L.  J.,  Jan.  16, 1916;  aff.  174  App.  Div.  864. 
Matter  of  Martinez,  160  Supp.  1121. 

And  where  the  testator  devised  his  entire  estate  to  a 
trustee  with  part  of  the  income  to  the  widow,  upon  her 
acceptance  of  the  bequest  held  an  incompatibility  and  no 
deduction  for  dower  allowed. 

Matter  of  Keys,  N.  Y.  L.  J.,  March  15,  1912. 

On  the  other  hand,  where  the  bequest  was  of  the  entire 
estate  for  life  or  until  remarriage,  it  was  held  that  there 
was  an  intent  to  separate  the  life  use  and  the  dower  and 
a  deduction  for  dower  was  granted. 
Matter  of  Knabe,  N.  Y.  L.  J.,  Feb.  2,  1916. 

And  generally,  where  there  are  no  express  words  giving 
the  bequest  "  in  lieu  of  dower,"  the  widow  is  entitled 


120  INHERITANCE  TAXATION 

to  both  dower  and  bequest  also,  unless  there  is  an  incom- 
patibility. 

Matter  of  Stuyvesant,  72  Misc.  295;  131  Supp.  197. 

Lewis  v.  Smith,  9  N.  Y.  520. 

Adsit  v.  Adsit,  2  Johns.  Ch.  448. 

Horstman  v.  Flege,  172  N.  Y.  384 ;  65  N.  E.  202. 

The  mere  fact  that  the  widow  is  largely  provided  for 
in  the  will  is  no  evidence  of  incompatibility. 

Casey  v.  McGowan,  50  Misc.  426;  100  Supp.  538. 
Gloss  v.  Eldert,  30  App.  Div.  338;  51  Supp.  881. 
Accounting  of  Fraser,  92  N.  Y.  239. 

The  intent  of  the  testator  must  be  gathered  from  the 
will. 

Eoessle  v.  Eoessle,  81  Misc.  558;  142  Supp.  984. 

But  if  the  disposition  which  the  testator  makes  of  his 
estate  clearly  indicates  that  he  intended  the  provisions 
in  his  will  to  be  in  lieu  of  dower  she  is  put  to  her  election. 

Savage  v.  Burnham,  17  N.  Y.  561. 

Vernor  v.  Vernon,  53  N.  Y.  531. 

Asche  v.  Asche,  113  N.  Y.  232;  21  N.  E.  70. 

Where  the  husband  secures  an  interlocutory  judgment 
of  divorce  under  Section  1774  of  the  Code,  and  dies  before 
final  judgment,  the  wife  is  not  deprived  of  her  dower 
right  in  his  real  estate. 

Bryon  v.  Bryon,  134  App.  Div.  320;  119  Supp.  41 

Where  a  wife  obtains  a  divorce  in  Indiana  on  grounds 
other  than  adultery,  her  right  of  dower  under  the  laws 
of  the  State  of  New  York  are  not  affected. 

Van  Blarican  v.  Larson,  130  Supp.  925. 

In  states  where  there  are  allowances  to  the  widow  by 
statute  in  the  nature  of  dower,  such  as  "  widow's  award  >: 


PART  II  —  THE  TRANSFEK  121 

and  "  family  allowance  "  or  "  homestead  " — all  are  held 
exempt  from  inheritance  taxes. 

Kennedy's  Estate,  157  Cal.  516;  108  Pac.  280. 
Crenshaw  v.  Moore,  124  Tenn.  528;  137  S.  W.  924. 
Blackburn's  Estate,  51  Mont.  234;  152  Pac.  31. 
Smith  v.  State,  161  Wis.  588;  155  N.  W.  509. 
Strahan's  Estate,  93  Neb.  828;  142  N.  W.  678. 

In  Illinois  the  rule  is  the  contrary  and  dower  is  held 
taxable  as  a  transfer  under  the  intestate  laws. 
People  v.  Field,  248  111,  147. 

Where  a  widow  renounced  under  a  will  and  elected  to 
take  her  dower,  held:  taxable  as  a  transfer  under  the 
intestate  laws. 

Sittings  v.  People,  189  111.  472;  59  N.  E.  798. 

A  widow's  award  under  the  Illinois  statute  is  also  held 
a  taxable  transfer. 

People  v.  Forsyth,  273  111.  141;  112  N.  E.  378. 

None  of  the  statutes  specifically  tax  dower. 

2.  Tenancy  by  the  Curtesy. 

The  same  rule  was  applied  as  to  a  husband's  tenancy 
by  the  curtesy. 

Matter  of  Starbuck,  63  Misc.  156;  116  Supp.  1030;  aff.  201  N.  Y. 
531;  94  N.  E.  1098. 

As  a  result  of  this  decision  the  New  York  Statute  was 
amended  to  tax  tenancy  by  the  curtesy.  (Ch.  732,  L.  1911.) 

Curtesy  is  not  vested  right  and  is  not  alienable  dur- 
ing the  marriage;  but  may  be  modified  or  annulled  at 
any  time  before  the  death  of  the  wife. 

Matter  of  Hinrichs,  148  Supp.  912. 

Matter  of  Beckhardt,  N.  Y.  L.  J.,  June  7,  1913. 

Thurber  v.  Townsend,  22  N.  Y.  517. 

Matter  of  Clark,  40  Hun,  233. 

Albany  Co.  Sav.  Bank  v.  McCarty,  149  N.  Y.  7L 


122  INHERITANCE  TAXATION 

Where  a  wife  executes  a  will  devising  all  her  property 
to  two  children  of  a  former  marriage  and  without  provid- 
ing for  future  issue,  a  child  subsequently  born  is  entitled 
to  succeed  to  the  same  portion  of  his  mother's  real  and 
personal  property  as  would  have  descended  or  been  dis- 
tributed to  him  if  she  had  die  intestate;  he  takes  this 
interest  by  inheritance  as  an  heir  at  law,  and  his  father 
is  entitled  to  a  tenancy  by  curtesy  in  so  much  of  the  real 
estate  as  descends  to  him. 

Young  v.  Blake,  163  App.  Div.  5019 ;  148  Supp  557. 

An  estate  by  the  curtesy  does  not  attach  to  property 
conveyed  to  a  wife  subject  to  the  use  and  occupation  of 
another  during  life,  where  she  was  never  in  actual  pos- 
session of  the  property,  and  she  died  before  the  termi- 
nation of  the  life  estate. 

Collins  v.  Russell,  184  N.  Y.  74;  76  N.  E.  751. 

3.  Marital  Right. 

The  common  law  right  of  a  husband  to  succeed  to  the 
personal  property  of  his  intestate  wife  was  held  not  a 
taxable  transfer  under  the  intestate  laws  of  New  York. 
Matter  of  Green,  144  App.  Div.  232;  129  Supp.  54. 

The  New  York  Statute  was  amended  to  cover  such 
transfers  in  consequence  of  this  decision.  (Ch.  732,  L. 
1911.) 

As  to  a  husband's  marital  right  to  succeed  to  his  wife's 
personal  property  in  New  York  see  generally: 

Matter  of  Thomas,  33  Misc.  729;  68  Supp.  1116. 
Eobins  v.  McClure,  100  N.  Y.  328;  3  N.  E.  663. 
Wadheim  v.  Hancock  and  ano.,  8  Misc.  506,  28  Supp.  766. 

The  right  rests  solely  upon  the  common  law  in  the 
absence  of  statute,  and  was  not  affected  by  the  married 
woman's  acts. 

Vallance  v.  Bausch,  28  Barb.  633. 
Burke  v.  Valentine,  52  Barb.  422. 


PART  II  — THE  TRANSFER  123 

And  when  a  married  woman  dies  leaving  no  descend- 
ants and  no  will  the  husband  is  entitled  to  her  personal 
property  jure  mariti. 

Matter  of  Russell,  168  N.  Y.  169;  61  N.  E.  166. 
Barnes  v.  Underwood,  47  N.  Y.  351. 

But  if  the  wife  leaves  a  will  the  transfer  is  pursuant  to 
the  will  even  though  she  leaves  all  her  property  to  her 
husband  and  the  succession  is  taxable  pursuant  to  Chapter 
732,  L.  1911. 

Hatter  of  Andrews,  N.  Y.  L.  J.,  Feb.  21,  1912. 

4.  Tenancies  by  the  Entirety. 

a.  NOT  TAXABLE  AS  AN  INHERITANCE. 

The  succession  to  the  sole  estate  on  the  death  of  one 
tenant  by  the  entirety  is  not  taxable  as  an  inheritance  and 
is  not  covered  by  the  language  of  the  usual  inheritance 
tax  statute. 

Palmer  V.  Treasurer,  222  Mass.  263;  110  N.  E.  283. 

None  of  the  statutes  attempted  specifically  to  tax  this 
class  of  succession  until  the  amendment  to  the  New  York 
Statute  in  1916;  and  no  other  state  has  yet  followed  her 
example.  Whether  they  will  do  so  or  not  depends  some- 
thing upon  the  construction  which  the  New  York  courts 
will  give  to  the  question. 

b.  NATURE  OF  THE  ESTATE. 

Blackstone  in  his  Commentaries  (Lewis  Ed.  Bk.  II  *p. 
180)  says:  "  The  properties  of  a  joint  estate  are  derived 
from  its  unity  which  is  fourfold:  the  unity  of  interest, 
the  unity  of  title,  the  unity  of  time  and  the  unity  of  pos- 
session." 

And  this  is  the  doctrine  of  all  modern  writers  on  real 
estate : 

"Washburn  on  Real  Estate,  8th  ed.,  vol.  I,  p.  529. 
Reeves  on  Real  Property,  vol.  II,  §§  689,  670. 
Tiedeman  on  Real  Property,  2d  ed.,  §  237. 
Cyc.,  vol.  XXIII,  p.  484. 


124  INHERITANCE  TAXATION 

These  authorities  also  hold  that  it  arises,  not  out  of 
contract,  but  by  operation  of  law,  as  a  result  of  the  marital 
relation. 

These  rules  are  important  to  be  borne  in  mind  and 
strictly  applied,  because,  if  the  courts,  in  dealing  with 
common  law  estates,  do  not  measure  them  by  common  law, 
standards,  the  result  is  confusion.  They  apply  only  to 
real  estate.  There  is  no  such  thing  as  tenancy  by  the 
entirety  of  personal  property. 

Matter  of  Albrecht,  136  N.  Y.  91;  32  N.  E.  632. 

In  a  case  involving  only  the  joint  ownership  of  per- 
sonal property  the  New  York  Court  of  Appeals  recently 
observed,  obiter,  as  follows: 

11  Joint  tenants,  by  reason  of  the  combination  of 
entirety  of  interest  with  the  power  of  transferring  in 
equal  shares,  are  said  to  be  seized  per  my  et  per  tout,  or 
by  the  half  and  the  whole,  but  tenants  by  the  entirety  are 
seized  per  tout  et  non  per  my,  and  the  conveyance  by 
either  husband  or  wife  will  have  no  effect  against  the 
other  if  survivor.  (Biles  v.  Fisher,  144  N.  Y.  306 ;  39  N.  E. 
337.)  Upon  the  vesting  of  an  estate  by  the  entirety,  both 
tenants  become  seized  of  the  whole  estate  and  upon  the 
death  of  one  the  survivor  acquires  no  new  or  additional 
interest  by  survivorship.  (Matter  of  Klatzl,  supra.} 
Matter  of  McKelway,  221  N.  Y.  15;  116  N.  E.  348. 

It  has  also  been  held  in  Hiles  v.  Fisher,  144  N.  Y.  306; 
39  N.  E.  337,  that  the  statutes  have  so  far  modified  the 
common  law  rule  as  to  rents  and  profits  of  lands  held  by 
the  entirety  that  while  the  husband  and  wife  are  living 
they  are  joint  tenants  of  the  rents  and  profits;  but  the 
court  is  very  careful  to  point  out  that  the  right  of  the 
husband  to  the  entire  rents  and  profits  arose  jure  uxoris 
and  not  from  the  nature  of  the  tenancy  by  the  entirety, 
the  court  saying,  "As  long  as  the  question  of  survivor- 


PABT  II  —  THE  TRANSFER  125 

ship  is  in  abeyance  they  are  joint  tenants  of  the  use,  as  the 
right  of  the  husband  to  the  rents  and  profits  did  not  spring 
from  the  nature  of  the  estate  but  from  the  common  law 
rules  of  coverture." 

c.  CHANGE  IN  BIGHTS  AT  DEATH. 

It  might  be  inferred  from  the  remarks  of  the  learned 
court  in  the  McKelway  case  that  no  change  in  ownership 
takes  place  at  the  death  of  one  of  the  tenants  by  the 
entirety. 

Obviously  there  is  a  change  as  to  the  ownership  of  the 
use  —  from  joint  ownership  to  sole  ownership. 

And  though  the  ownership  of  the  real  estate  is  termed 
an  "  entirety  "  during  the  joint  lives  of  husband  and  wife, 
a  change  takes  place  at  death  in  the  teeth  of  legal  fiction. 

Husband  and  wife  may  be  "  one  "  in  the  eye  of  the 
law;  and  "  which  one  "  may  be  a  strenuous  domestic 
problem;  but,  when  the  wife  becomes  a  widow,  death  has 
abolished  all  fictions  and  asserted  itself  as  the  sole  ulti- 
mate reality. 

d.  How  CREATED. 

A  tenancy  by  the  entirety  at  common  law  could  only 
be  created  by  a  conveyance  from  a  third  party  to  husband 
and  wife;  and,  as  they  were  one  in  the  eye  of  the  law,  the 
estate  was  a  unit  —  inseverable. 

But  when  a  husband  conveyed  to  his  wife  and  himself 
as  "  tenants  by  the  entirety,"  the  Comptroller  contended 
that  a  tenancy  by  the  entirety  was  not  created,  merely 
because  it  was  so  described  in  the  deed,  any  more  than 
if  the  husband  had  conveyed  to  himself  a  right  of  dower 
eo  nomine! 

The  Court  of  Appeals  was  evenly  divided  on  the  ques- 
tion of  whether  such  an  estate  was  created. 
Matter  of  Klatzl,  216  N.  Y.  83;  110  N.  E.  181. 


126  INHERITANCE  TAXATION 

The  presiding  justice  concurred  in  the  result  on  another 
ground  and  one-half  the  real  estate  was  held  taxable  on 
the  husband's  death. 

In  Matter  of  Horler,  now  pending  on  appeal  to  the 
Appellate  Division,  97  Misc.  587;  161  Supp.  957,  a  wife 
deeded  to  her  husband  a  one-half  interest  in  her  real  estate 
with  the  intention  of  creating  a  joint  tenancy  in  the  whole 
with  right  of  suvivorship.  The  Comptroller  contends,  on 
appeal,  that  such  a  deed  cannot  create  a  common  law  estate 
under  the  common  law  rules  as  to  unity. 

The  learned  Surrogate,  in  discussing  the  Klatzl  case, 
in  his  opinion  in  the  Horler  case,  says: 

"The  Comptroller  contends  that  the  decision  of  the 
Court  of  Appeals  in  the  Matter  of  Klatzl  (216  N.  Y.  83; 
110  N.  E.  181)  is  controlling  on  this  point.  In  that  case 
decedent  who  was  seized  of  certain  real  estate,  conveyed 
it  to  himself  and  his  wife  as  tenants  by  the  entirety. 
Three  of  the  judges  of  the  Court  of  Appeals  held  that 
the  conveyance  did  not  constitute  a  tenancy  by  the 
entirety,  but  that  the  husband  and  wdfe  held  as  tenants 
in  common,  and  that  upon  the  death  of  the  husband  his 
wife  took  his  undivided  one-half  under  the  provisions  of 
his  will.  Three  of  the  judges  held  that  the  conveyance 
did  constitute  a  tenancy  by  the  entirety,  and  that  no  part 
of  the  property  was  subject  to  taxation  upon  the  death 
of  the  husband.  The  chief  justice  while  holding  that  the 
wife  took  the  property  by  virtue  of  the  deed  from  her 
husband,  held  that  her  undivided  one-half  passed  to  her 
husband  upon  her  death,  and  that  that  one-half  was  subject 
to  a  transfer  tax.  I  do  not  understand  the  decision  in  Matter 
of  Klatzl  to  go  so  far  as  to  subject  joint  tenancies  to  the 
succession  tax  on  the  death  of  any  joint  tenant.  In  the 
matter  under  consideration  there  is  little  room  for  differ- 
ence of  opinion  as  to  the  character  of  the  tenancy  created 
by  the  conveyance  from  the  decedent  to  her  husband,  as 


PART  II  — THE  TRANSFER  127 

it  is  expressly  stated  therein  that  the  grantor  conveys 
an  undivided  one-half  interest  in  the  premises  to  the 
grantee,  and  that  it  was  her  intention  to  create  a  joint 
tenancy  in  herself  and  her  husband,  with  an  absolute  fee 
in  the  survivor.  The  facts  in  this  matter,  therefore,  are 
different  from  those  in  the  Matter  of  Klatzl." 

The  Horler  case  will  be  opened  before  the  Appellate 
Division  this  fall  (1917). 

e.     How  TERMINATED. 

Death  terminates  the  estate  by  the  entirety  and  trans- 
forms it  to  a  sole  estate. 
So  does  divorce. 

Stelz  v.  Shreck,  128  N.  Y.  263;  28  N.  E.  510. 

In  this  case  property  had  been  deeded  to  husband  and 
wife.  Thereafter  there  wTas  a  divorce  a  vinculo  for  fault 
of  the  wife  and  the  husband  married  a  second  time.  On 
his  death  the  first  wife  claimed  the  property  as  tenant 
by  the  entirety  and  the  court  held  that  as  her  title  sprang 
not  from  contract  but  from  marital  relation  that  the 
divorce  had  destroyed  the  tenancy  by  the  entirety. 

The  parties  also  by  mutual  agreement  can  sever  the 
entirety  under  the  New  York  Statute  (Domestic  Relations 
Law). 

Sec.  56.  HUSBAND  AND  WIFE  MAY  CONVEY  TO  EACH  OTHER 
OR  MAKE  PARTITION. —  Husband  and  wife  may  convey  or 
transfer  real  or  personal  property  directly,  the  one  to  the 
other,  without  the  intervention  of  a  third  person ;  and  may 
make  partition  or  division  of  any  real  property  held  by 
them  as  tenants  in  common,  joint  tenants  or  tenants  by 
the  entireties.  If  so  expressed  in  the  instrument  of  par- 
tition or  division,  such  instrument  bars  the  wife's  right 
to  dower  in  such  property,  and  also,  if  so  expressed  the 
husband's  tenancy  by  courtesy. 


128  INHERITANCE  TAXATION 

This  statute  has  been  held  not  to  abrogate  the  common 
law  rules  as  to  tenancy  by  the  entirety. 
Bertles  v.  Noonan,  92  N.  Y.  152. 
Zortlein  v.  Bram  et  al.,  100  N.  Y.  12;  2  N.  E.  388. 

f.     EFFECT  OF  TAXING  STATUTE. 

New  York  adopted  a  statute  taxing  the  transfer  at  the 
death  of  one  tenant  by  the  entirety  in  1916,  at  the  same 
time  that  it  undertook  to  tax  the  transfer  at  the  death 
of  one  joint  tenant. 

The  Appellate  Division,  Second  Department  has  clari- 
fied the  obscurity  left  by  the  McKehvay  decision  as  to 
tenancies  by  the  entirety  and  their  taxation  upon  the  death 
of  one  of  the  tenants  under  the  amendment  to  the  New 
York  Statute  in  1916,  in  Matter  of  Moebus  decided  July, 
1917  (165  Supp.  887).  After  discussing  the  provisions  of 
the  statute  and  prior  authorities  the  court  says,  by  Judge 
Putnam : 

"  Hence  we  are  brought  to  the  final  inquiry.  Does  the 
surviving  tenant  by  the  entirety  in  the  state  of  New  York 
acquire  an  interest  that  is  taxable!  Speaking  of  such 
estates  with  the  original  incidents,  unaffected  by  the  later 
statutes,  it  has  been  accurately  said  of  such  tenants: 
'  Death  separated  them,  and  the  survivor  still  held  the 
whole  because  he  or  she  had  always  been  seized  of  the 
whole,  and  the  person  who  died  had  no  estate  which  was 
descendable  or  devisable.' 
Stele  v.  Shreck,  128  N.  Y.  263. 

"  Notwithstanding  this  original  peculiarity  of  title,  the 
use  and  enjoyment  now  does  undergo  a  decided  change  by 
the  death  of  one  spouse.  By  common  law,  the  husband 
during  coverture  had  the  sole  use  or  profits  of  this  estate. 
But  by  reason  of  the  married  woman's  property  acts  in 
New  York,  each  has  now  equal  rights  in  the  rents  and 
profits,  so  long  as  the  question  of  survivorship  is  in 
abeyance.  (Hiles  v.  Fisher,  144  N.  Y.  306 ;  Grosser  v.  City 
of  Rochester,  148  N.  Y.  235 ;  see  also  Kip  v.  Kip,  33  N.  J. 


PART  II  — THE  TRANSFER  129 

Eq.  213. )  The  old  idea  that  this  estate  is  an  unit  made  up 
of  indivisible  parts  (Stuckey  v.  Keek's  Exrs.,  26  Perm. 
St.  397,  339),  is  no  longer  true  in  New  York.  As  to  income 
its  unity  is  gone.  Indeed,  the  term  '  entirety  '  has  become 
inexact  and  perhaps  misleading. 

"  With  such  a  succession  from  the  dead  to  the  survivor 
as  to  one-half  of  the  profits, —  and  profits  represent  the 
land's  usable  value, —  it  would  seem  strange  if  that  suc- 
cession could  not  be  taxed. 

"  Where  a  joint  bank  deposit  was  in  question  in  case 
of  a  husband's  death  in  1913,  the  court  held  such  a 
joint  tenancy  not  taxable  under  the  language  of  that  earlier 
statute,  since  such  property  thus  disposed  of  is  not  *  made 
in  contemplation  of  death, '  nor  *  intended  to  take 

effect  in  possession  or  enjoyment  at  or  after  such  death.' 
Mr.  Justice  Woodward,  however,  added:  '  if  the  Legis- 
lature deems  such  dispositions  of  property  to  be  properly 
taxable  that  is  a  question  which  may  be  dealt  with  in  the 
proper  department,  but  this  court  has  no  power  to  enlarge 
upon  the  scheme  of  tax  laws.  (See  Matter  of  Starbuck, 
137  App.  Div.  866;  Matter  of  Green,  144  id.  232-234,  and 
authorities  cited/ 

Matter  of  Tilley,  166  App.  Div.  240,  243. 

"  In  Matter  of  Klatzl  (216  N.  Y.  83),  the  death  was  in 
1913.  In  1906,  Klatzl  had  deeded  a  property  in  New  York  to 
himself  and  wife  as  *  tenants  by  the  entirety,'  which  the 
surrogate  held  effective.  The  Court  of  Appeals  (reversing 
the  surrogate  and  Appellate  Division),  however,  held  the 
property  taxable  to  one-half  of  its  value,  as,  in  the  majority 
view,  the  conveyance  created  only  a  tenancy  in  common. 
Judge  Bartlett  concurred  in  the  result,  on  the  express 
ground  that,  even  as  tenants  by  the  entirety,  one  undi- 
vided half  of  the  profits  to  which  the  husband  had  been 
entitled  during  his  life,  passed  into  the  wife's  possession 
by  the  husband's  death  (p.  89). 
5 


130  INHERITANCE  TAXATION 

"  Estates  by  the  entirety,  if  wholly  escaping  the  trans- 
fer tax,  would  be  easily  resorted  to  as  a  means  to  put 
valuable  lands  beyond  taxation.  This  is  a  period  when  the 
taxing  power  is  in  full  exercise,  and  seems  to  be  required 
for  the  general  welfare.  The  legislature  has  clearly 
enlarged  the  statute,  so  as  to  include  the  succession  by 
survivorship  to  an  estate  by  the  entirety.  Hence  I  advise 
to  tax  the  lands  held  as  tenants  by  the  entirety  (both 
strictly  such,  and  the  Yonkers  land  under  contract  of  sale), 
for  one-half  their  value.  This  also  applies  to  the  joint 
personalty,  with  the  result  that  the  value  of  the  joint 
interest,  appraised  at  $64,811.89,  should  be  halved,  namely 
$32,405.95,  and  as  thus  modified,  the  order  of  the  Surro- 
gate's Court  of  Westchester  county  should  be  affirmed, 
without  costs  of  this  appeal. ' ' 

5.  Joint  Tenancy. 

A  devise  to  two  or  more  persons  will  be  construed  as 
creating  a  tenancy  in  common  unless  expressly  declared 
otherwise. 

Matter  of  Eldridge,  29  Misc.  734;  62  Supp.  1026. 

Where  so  expressly  devised  the  bequest  to  the  several 
joint  tenants  is  taxable  in  equal  proportions. 
Matter  of  Sullivan,  94  Misc.  529 ;  159  Supp.  616. 

The  taxation  of  property  held  jointly,  at  the  death  of 
the  joint  tenants,  has  proved  a  vexatious  problem.  The 
first  question  arising  is  whether  a  joint  tenancy  has,  in 
fact,  been  created;  or  whether  the  parties  held  as  tenants 
in  common  —  for  joint  ownership  is  held  to  be  "  an  object 
of  disfavor." 

Overheiser  v.  Lackey,  207  N.  Y.  229. 
a.    INTENT  OF  THE  PARTIES  GOVERNS. 

This  was  well  illustrated  in  a  rather  curious  case.  A 
marriage  was  void  by  reason  of  the  fact  that  the  husband 
had  another  wife  living  at  the  time  of  its  solemnization; 
but  they  lived  together  for  many  years  as  man  and  wife. 


PART  II --THE  TRANSFER  131 

He  deposited  money  in  their  joint  names  and  died.  In 
holding  that  he  intended  to  give  his  wife  a  right  of  sur- 
vivorship in  the  joint  account  the  court  held  that  the 
intention  which  the  law  imputes  to  husband  and  wife  who 
deposit  moneys  to  their  joint  credit,  that  the  money  shall 
belong  to  the  survivor,  is  founded  not  upon  the  legality 
of  their  marriage  relation,  but  upon  the  impulses  which 
it  has  been  found  ordinarily  affect  persons  sustaining 
such  a  relation  to  each  other. 

Matter  of  Eysel,  65  Misc.  432;  121  Supp.  1095. 

' '  The  mere  form  of  the  account  will  not  be  regarded  as 
sufficient  to  establish  an  intent  on  the  part  of  the  person 
making  the  deposit  to  give  the  individual  whose  name  is 
associated  with  that  of  the  depositor  on  the  books  of  the 
bank  or  trust  company  a  joint  interest  in  the  deposit,  with 
the  right  of  survivorship  (Matter  of  Bolin,  136  N.  Y.  177 ; 
32  N.  E.  626 ;  Farrelly  v.  Emigrant  Ind.  Sav.  Bank,  92  App. 
Div.  529;  87  Supp.  54,  aff.  179  N.  Y.  594;  72  N.  E.  1141; 
Slee  v.  Kings  Co.  Sav.  Ins.,  78  App.  Div.  534;  79  Supp. 
630). 

Hatter  of  Myers,  129  Supp.  194. 

Where  mortgages  were  assigned  to  decedent  and  another 
by  instruments  which  contained  provisions  that  the  sur- 
vivor of  the  two  assignees  should  become  the  absolute 
owner  of  the  bonds  and  mortgages  and  that  neither  should 
have  power  to  affect  the  rights  of  the  last  survivor.  It 
was  held  that  one-half  of  the  value  of  the  bonds  and 
mortgages  was  taxable  upon  the  death  of  the  decedent. 

Matter  of  Spring,  75  Misc.  586;  136  Supp.  174. 
Matter  of  Pitou,  79  Misc.  384;  140  Supp.  919. 
Matter  of  Quinn,  N.  Y.  L.  J.,  Sept.  25,  1911. 

In  the  case  of  Kelly  \.  Beers,  194  N.  Y.  49;  86  N.  E.  980, 
the  court  held  that  the  circumstances  of  the  case  created 
a  joint  account  with  right  of  survivorship. 

In  Matter  of  Reiser,  85  Misc.  271 ;  147  Supp.  557,  two 


132  INHERITANCE  TAXATION 

sisters  held  a  large  property  as  tenants  in  common  and 
by  contract  in  a  series  of  conveyances  changed  their  title 
to  a  joint  tenancy.  This  was  held  to  be  a  completed  gift 
inter  vivos. 

In  Matter  of  Wilkens,  144  App.  Div.  803 ;  129  Supp.  600, 
there  were  deposits  by  husband  and  wife  and  it  did  not 
appear  who  made  them.  The  court  held  that  the  pre- 
sumption was  that  each  had  an  equal  interest. 

In  Wetheroiv  v.  Lord,  41  App  Div.  413;  58  Supp.  778, 
the  court  holds  that  a  husband  could  not,  as  against  his 
wrife,  make  a  gift  of  more  than  one-half  of  their  joint 
account. 

In  Matter  of  West  v.  McCullough,  123  App.  Div.  846; 
108  Supp.  493,  the  court  holds  that  the  question  of  the 
right  of  survivorship  in  joint  bank  accounts  is  one  to  be 
determined  by  the  intent  of  the  parties. 

In  Matter  of  SteWms,  52  Misc.  438;  103  Supp.  563, 
where  money  was  deposited  in  joint  names  and  the  book 
read,  "  either  or  the  survivor  may  draw,"  it  was  held 
that  the  survivor  took  free  from  the  transfer  tax. 

But  where  it  appeared  that  part  of  the  money  belonged 
to  each  at  the  time  the  deposit  was  made  in  the  case  of 
a  similar  account.  The  court  held  that  such  portion  of 
the  money  deposited  as  did  not  belong  to  the  survivor 
at  the  time  the  deposit  was  made  was  taxable. 
Matter  of  Kline,  65  Misc.  445;  121  Supp.  1090. 

For  other  decisions  involving  joint  bank  accounts  see: 

Matter  of  Durfee,  79  Misc.  655 ;  140  Supp.  594. 

McElroy  v.  National  Savings  Bank,  8  App.  Div.  192;  40  Supp.  340. 

McElroy  v.  Albany  Savings  Bank,  8  App.  Div.  46;  40  Supp.  422. 

Hallenbeck  v.  Hallenbeck,  103  App.  Div.  107 ;  93  Supp.  73. 

Matter  of  King,  51  Misc.  375 ;  101  Supp.  279. 

Kelly  v.  Albany  Trust  Co.,  124  App.  Div.  99 ;  108  Supp.  214. 

Kelly  v.  Home  Savings  Bank,  103  App.  Div.  141,  appeal  withdrawn, 

182  N.  Y.  568. 

Matter  of  Meehan,  59  App.  Div.  156;  69  Supp.  9. 
Matter  of  Graves,  52  Misc.  433 ;  103  Supp.  571. 
Moore  v.  Fingar,  131  App.  Div.  399;  115  Supp.  1035. 


PART  II  —  THE  TRANSFER  133 

b.     SURVIVORSHIP  NOT  TAXABLE. 

In  this  somewhat  confused  state  of  the  authorities 
section  114  of  the  Banking  Law  was  amended  April  30, 
1907,  by  chapter  247  N.  Y.  L.  1907,  adding  thereto  the  fol- 
lowing clause: 

"  When  a  deposit  shall  be  made  by  any  person  in  the 
names  of  such  depositor  and  another  person  and  in  form 
to  be  paid  to  either  or  the  survivor  of  them,  such  deposit 
thereupon  and  any  additions  thereto  made  by  either  of 
such  persons  upon  the  making  thereof  shall  become  the 
property  of  such  persons  as  joint  tenants  and  the  same, 
together  with  all  interest  thereon,  shall  be  held  for  the 
exclusive  use  of  the  persons  so  named  and  may  be  paid 
to  either  during  the  lifetime  of  both  or  to  the  survivor  after 
the  death  of  one  of  them,  and  such  payment  and  the 
receipt  or  acquittance  of  the  one  to  whom  such  payment 
is  made  shall  be  a  valid  and  sufficient  release  and  dis- 
charge to  said  bank  for  all  payments  made  on  account  of 
such  deposit  prior  to  the  receipt  of  said  bank  of  notice  in 
writing  not  to  pay  such  deposit  in  accordance  with  the 
terms  thereof." 

This  amendment  came  up  for  construction  in  Matter 
of  Tilley,  166  App.  Div.  240;  151  Supp  79;  aff.  215  N.  Y. 
702.  The  court  held  that  under  this  amendment  the  sur- 
vivorship in  such  an  account  was  not  taxable,  reasoning 
thus: 

11  This  would  seem  to  dispose  of  the  question  here  pre- 
sented, for  whatever  may  have  been  the  intention  of  the 
decedent  he  is  presumed  to  have  known  the  law,  and  when 
he  deposited  the  moneys  in  the  accounts  now  under  con- 
sideration he  vested  the  ownership  of  such  funds  in  joint 
tenancy  in  himself  and  his  wife;  it  became  the  property 
of  such  persons  in  joint  tenancy;  and  it  is  of  the 
essence  of  a  joint  tenancy  that  there  shall  be  unity  of 
interest,  unity  Of  title,  unity  of  time,  and  unity  of  pos- 
session; that  is  to  say,  joint  tenants  have  one  and  the 


134  INHERITANCE  TAXATION 

same  interest,  accruing  by  one  and  the  same  conveyance, 
commencing  at  one  and  the  same  time,  and  held  by  one 
and  the  same  undivided  possession.  Neither  can  be  exclu- 
sively seized  of  any  particular  part  of  the  property,  and 
is  cotenant  of  the  other,  but  each  has  an  undivided  moiety 
of  the  whole,  and  not  the  whole  of  an  undivided  moiety. 
(17  Am.  &  Eng.  Ency.  of  Law  [2d  ed.],  649.)  The  great 
incident  of  joint  tenancy  is  the  right  of  survivorship,  and 
by  reason  of  this  right  the  interest  of  a  joint  tenant  is 
not  descendible,  and  cannot  be  devised  by  will.  (17  Am. 
&  Eng.  Ency.  of  Law  [2d  ed.],  650.)  No  right  passes  by 
the  death  of  one  of  the  parties,  for  where  the  deposit  is 
in  the  joint  names  of  the  parties,  and  the  intent  appears 
—  as  it  now  must  under  the  statute  —  to  create  the  joint 
tenancy,  its  effect  is  to  vest  title  in  the  entire  fund  in 
the  survivor.  (Farrelly  v.  Emigrant  Industrial  Savings 
Bank,  92  App.  Div.  529,  531;  87  Supp.  54;  affd.,  179  N.  Y. 
594;  72  N.  E.  1141.)  The  right  of  suvivorship  vests  at 
the  creation  of  the  joint  tenancy,  and  the  only  question 
determined  by  death  is  which  shall  take  the  entire  estate. 
Under  such  circumstances  it  is  clear  that  there  is  no  suc- 
cession to  be  taxed,  for  it  was  not  '  made  in  contempla- 
tion of  the  death  of  the  grantor,  vendor  or  donor,  or 
intended  to  take  effect  in  possession  or  enjoyment  at  or 
after  such  death.'  The  possession  is  given  upon  the 
creation  of  the  estate;  the  rights  are  absolutely  and  con- 
clusively fixed,  and  the  only  question  which  is  contingent 
is  which  of  two  or  more  joint  tenants  shall  eventually  own 
the  entire  estate.  But  each  is  in  full  possession,  each 
has  full  ownership  as  against  all  the  world,  with  the 
exception  of  the  equal  right  of  the  other,  and  the  transfer 
which  becomes  fully  determined  at  the  death  of  one  of 
two  joint  owners  relates  back  to  the  creation  of  the  estate. 
It  was  then  that  the  rights  vested,  and  the  death  only 
determines  which  shall  be  the  gainer  by  the  transaction." 


PART  II  —  THE  TRANSFER  135 

Prior  to  this  decision  which,  it  will  be  observed,  was 
founded  on  the  provisions  of  the  amendment  to  the  bank- 
ing law,  the  taking  of  mortgages  or  notes  in  joint  names 
had  always  been  regarded  as  a  gift  taking  effect  at  death. 

In  the  Matter  of  Sanford  v.  Sanford,  45  N.  Y.  723,  the 
court  holds  that  if  one,  in  loaning  money,  takes  a  promis- 
sory note  therefor,  payable  to  the  order  of  himself  and 
his  wife,  this  imports  a  gift  to  the  wife  in  case  she  sur- 
vives him,  and  delivery  of  the  note  to  her  by  the  husband 
is  not  necessary  to  perfect  the  gift.  During  the  husband's 
life  such  note  remains  subject  to  his  control,  and  the  wife 
has  no  legal  interest  therein  until  his  decease.  Judge 
Peckham  says :  * '  The  note  being  payable  to  husband  and 
wife  jointly  belonged  to  the  wife  as  survivor.  *  * 
Taking  this  note  in  the  name  of  himself  and  wife  shows 
that  the  husband  intended  thereby  to  give  it  to  her  in 
case  she  survived  him,  and  a  delivery  to  her  was  unneces- 
sary to  perfect  the  gift.  Assuming  this  to  be  so,  yet  dur- 
ing the  life  of  the  huband  the  note  is  subject  to  his  control 
and  disposition.  The  wife  has  no  legal  interest  in  it  until 
his  decease." 

But  following  the  Tilley  case  the  New  York  courts  went 
a  step  further  and  declared  that  all  joint  holdings  escaped 
taxation  at  the  death  of  one  of  the  joint  tenants.  Ignoring 
the  fact  that  the  statute  only  concerned  bank  accounts  the 
court  held  that  where  a  husband  loaned  his  own  money 
and  took  mortgages  in  the  joint  names  of  himself  and  his 
wife  there  was  no  distinction  in  the  rules  to  be  applied 
between  joint  mortgages  and  joint  bank  accounts. 

Matter  of  Thompson,  167  App.  Div.  356;  153  Supp.  164;  aff.  217 
N.  Y.  609. 

And  where  a  husband  put  stocks  and  bonds  valued  at 
upwards  of  $100,000  in  the  joint  names  of  himself  and  his 
wife  and  died  soon  after  the  transfer  was  held  not  taxable. 

Matter  of  Dalsimer,  167  App.  Div.  365 ;  153  Supp.  58 ;  aff.  217  N.  Y. 
608. 


136  INHERITANCE  TAXATION 

The  California  Court  followed  the  same  line  of  reason- 
ing as  these  New  York  cases : 

"  Mrs.  Boyd  did  not  take  any  interest  in  the  deposits 
as  heir  of  or  successor  to  her  deceased  husband.  She  took 
by  virtue  her  estate  originating  at  the  time  of  creation 
of  the  joint  tenancies.  The  imposition  of  the  tax  cannot, 
therefore,  be  sustained  upon  the  theory  that  the  deposits 
formed  part  of  the  estate  of  Colin  M.  Boyd  passing  upon 
his  death  to  his  wife.  Boyd  died  on  March  13,  1912.  The 
inheritance  tax  statute  then  in  force  was  the  act  approved 
April  7,  1911,  and  this  act  did  not  undertake  to  impose  a 
tax  upon  the  right  accruing  to  a  surviving  joint  tenant  on 
the  death  of  his  co-tenant." 

McDongald  v.  Boyd,  172  Cal.  753,  756;  150  Pac.  168. 

In  Massachusetts  the  doctrine  was  stated  thus: 
"  The  statute  does  not  in  express  terms  authorize  the 
taxation  of  the  interest  accruing  to  a  surviving  tenant  upon 
the  termination  of  a  joint  tenancy  by  the  death  of  his 
co-tenant.  In  England  such  interests  are  expressly  made 
taxable  by  statute.  St.  57  &  58  Viet.,  c.  30,  Sec.  2  (d)  xx. 
We  think  that  the  laws  regulating  the  intestate  succession 
mean  the  statute  laws  regulating  the  descent  and  distri- 
bution of  intestate  estates  and  do  not  include  the  succession 
of  property  which  passes  under  the  common  law.  Joint 
tenancies  arise  under  the  common  law,  and  the  doctrine 
of  survivorship  thereunder  grows  out  of  the  application 
of  common  law  principles  wholly  independent  of  statute. 
Joint  tenants  hold  under  the  conveyance  or  instrument  by 
which  the  tenancy  is  created. 

Attorney-General  v.  Clark,  222  Mass.  291,  295;  110  N.  E.  299. 

This  extreme  doctrine  had  scarcely  been  promulgated 
when  the  New  York  Court  of  Appeals  began  to  recede 
from  it.  Where  stock  was  placed  in  joint  names  by  one 
Dana  to  retain  the  services  of  one  Seibert  in  the  business 


PART  II  —  THE  TRANSFER  137 

and  a  power  of  revocation  and  to  vote  the  stock  was 
reserved  the  court  drew  the  line  and  held  the  succession 
taxable,  stating  its  reason  thus: 

"  The  suggestion  which  has  been  made  that  if  we  hold 
this  transfer  taxable  we  would  have  to  hold  the  same  as 
to  all  joint  tenancies  in  personal  property,  or  the  further 
suggestion  that  if  Seibert's  interest  in  this  stock  becomes 
taxable  upon  Dana's  death,  if  Seibert  had  died  first,  a  like 
interest  passing  to  Dana  would  have  then  been  subject  to 
taxation,  is  not  correct.  The  latter  could  not  be  so, 
because  Dana  did  not  acquire  his  interest  in  the  stock 
by  *  gift  '  from  Seibert,  whereas  Seibert  did  acquire  his 
interest  therein  by  '  gift  '  from  Dana, ' ' 

Matter  of  Dana,  164  App.  Div.  45;  149  Supp.  417;  aff.  214  N.  Y.  710. 

It  is  difficult  to  reconcile  the  Dana,  and  Thompson  and 
Dalsimer  cases.  The  fact  that  the  gifts  were  from  hus- 
band to  wife  was  not  sufficient  to  alter  the  nature  of  the 
tenancy;  and  the  fact,  in  the  two  latter  cases,  that  the 
tenancy  was  created  by  gift  was  ignored. 

No  true  common  law  joint  tenancy  can  be  created  by 
gift  because  there  is  no  unity  of  title.  If  the  courts  had 
consistently  applied  common  law  rules  in  dealing  with 
common  law  estates  the  difficulties  and  confusions  in  wrhich 
the  whole  subject  became  involved  would  have  been 
avoided. 

Nor  does  the  reservation  of  a  power  to  revoke  afford 
the  distinction  because,  by  its  very  nature,  a  joint  tenancy 
is  always  revokable  by  conveyance  at  the  option  of  either 
joint  tenant. 

c.  WHERE  SUCCESSION  is  SPECIFICALLY  TAXED. 

Estate  attorneys  have  not  been  slow  to  take  advantage 
of  the  loophole  thus  afforded  and,  on  the  other  hand,  legis- 
latures have  taken  alarm  at  the  escape  of  large  properties 
from  a  tax  that  must  reach  all  or  be  grossly  unfair.  In 


138  INHERITANCE  TAXATION 

California  an  amendment  in  1915  declared  that  where  a 
decedent  has  placed  property  in  the  joint  names  of  him- 
self and  another  without  consideration  it  shall  be  deemed 
a  transfer  to  take  effect  at  death  and  be  taxable  accord- 
ingly. The  Federal  statute  taxes  the  interest  to  which  a 
surviving  joint  tenant  succeeds. 

The  New  York  legislature  went  a  step  further.  The 
courts  had  held  that  each  joint  tenant  owned  the  ivhole, 
that  death  merely  determined  which  should  survive  but 
did  not  alter  the  nature  of  the  ownership  and  that  there- 
fore there  was  no  tax.  The  legislature  accepted  the  doc- 
trine and  taxed  the  whole  property  on  the  death  of  one 
joint  tenant. 

Chapter  664,  L.  1915,  provides  as  follows:  "  Whenever 
intangible  property  is  held  in  the  joint  names  of  two  or 
more  persons,  or  as  tenants  by  the  entirety,  or  is 
deposited  in  banks  or  other  institutions  or  depositories 
in  the  joint  names  of  two  or  more  persons  and  payable 
to  either  or  the  survivor,  upon  the  death  of  one  of  such 
persons  the  right  of  the  surviving  tenant  by  the  entirety, 
joint  tenant  or  joint  tenants,  person  or  persons,  to  the 
immediate  ownership  or  possession  and  enjoyment  of 
such  property  shall  be  deemed  a  transfer  taxable  under 
the  provisions  of  this  chapter  in  the  same  manner  as 
though  the  whole  property  to  which  such  transfer 
relates  belonged  absolutely  to  the  deceased  tenant  by  the 
entirety,  joint  tenant  or  joint  depositor  and  had  been 
bequeathed  to  the  surviving  tenant  by  the  entirety,  joint 
tenant  or  joint  tenants,  person  or  persons,  by  such 
deceased  tenant  by  the  entirety,  joint  tenant  or  joint 
depositor,  by  will. ' ' 

And  this  was  copied  by  the  California  Statute  of  1917. 

d.     CONSTRUCTION  OF  THE  STATUTE. 

Neither  the  Federal  nor  the  California  statutes  have 
as  yet  been  construed;  but  the  New  York  act  was  open  to 


PART  II  — THE  TRANSFER  139 

obvious  objections  and  was  at  once  attacked  as  uncon- 
stitutional and  was  so  held  by  the  lower  courts,  which 
were  reversed  on  appeal  in  two  recent  cases  as  to  half  the 
property  transferred,  a  decision  which  takes  a  long  step 
towards  judicial  legislation. 

In  the  Matter  of  McKelway,  decided  by  the  Court  of 
Appeals  May  8,  1917  (221  N.  Y.  15,  116  N.  E.  358),  Judge 
Pound,  writing  for  the  court,  said : 

"  But  joint  ownership  in  personal  property  may  be 
severed  by  the  act  of  one  in  disposing  of  his  interest.  If 
the  interest  of  one  joint  owner  passes  to  a  third  party 
he  and  the  other  joint  tenant  become  tenants  in  common. 
The  doctrine  of  the  survivorship  applies  only  if  the 
jointure  is  not  severed.  (Williams  on  Personal  Property, 
pp.  302-306.)  The  undivided  half  of  this  joint  property 
which  Mr.  McKelway  might  have  effectually  disposed  of 
at  any  time  during  his  life  never  passed  into  the  absolute 
ownership  of  his  wife  until  her  husband's  death.  A  trans- 
fer tax  thereon  does  not  diminish  the  value  of  a  vested 
estate  and  is  free  from  the  objections  to  a  tax  on  vested 
remainders  and  reversions  as  set  forth  in  Matter  of  Pell 
(171  N.  Y.  48;  63  N.  E.  789)  or  to  a  tax  on  contingent 
remainders  as  set  forth  in  Matter  of  Lansing  (supra). 

As  to  the  one-half  which  Mrs.  McKelway  herself  owned 
and  had  the  right  to  dispose  of,  the  rule  of  the  Pell  case 
must  govern.  She  gained  nothing  in  regard  thereto  by 
the  death  of  her  husband  except  as  the  jus  accrescendi 
eliminated  his  interest.  The  right  of  the  survivor  of  two 
joint  tenants  of  personal  property  to  the  exclusive  owner- 
ship thereof  may  be  deemed  a  taxable  transfer  of  one- 
half  of  the  joint  property  but  not  to  the  whole.  It  is 
taxable  only  to  the  extent  of  the  beneficial  interest  arising 
by  survivorship,  which  is,  as  we  have  seen,  the  accruer  by 
survivorship  of  the  whole  instead  of  the  half.  To  this 
extent  it  was  a  property  rightfully  acquired  only  on 
survivorship,  analogous  to  an  interest  created  by  a  power 


140  INHERITANCE  TAXATION 

of  appointment  tinder  a  will  executed  prior  to  the  enact- 
ment of  the  law  taxing  transfers,  and,  therefore,  one  that 
could  be  cut  down  by  the  imposition  of  an  excise  tax  after 
the  joint  ownership  began.  (Matter  of  Vanderbilt,  50 
App.  Div.  246 ;  63  Supp.  1079 ;  163  N.  Y.  597.)  The  imposi- 
tion of  such  a  tax  violates  no  contract  for  neither  joint 
tenant  agrees  not  to  terminate  the  joint  tenancy.  Mrs. 
McKelway  had  no  contract  with  her  husband  as  to  the 
joint  property  which  was  not  as  ambulatory  as  a  will  to 
the  last  moment  of  Mr.  McKelway 's  life  and,  for  the  pur- 
poses of  taxation,  she  is  deemed  to  have  acquired  his 
interest  in  the  joint  property  by  his  death." 

The  decision  in  the  McKelway  case  re-states  the  law  as 
to  joint  tenancy  and  restores  it  to  where  it  was  before  the 
Thompson  and  Dalsimer  decisions,  effecting  substantial 
justice  at  the  sacrifice  of  consistency.  As  Mr.  Emerson 
says :  ' '  With  consistency  a  great  soul  has  simply  nothing 
to  do." 

In  Matter  of  Teller,  decided  by  the  Appellate  Division, 
First  Department,  June  9,  1917,  165  Supp.  517,  the 
opinion  in  the  McKelway  case  was  held  to  apply  not  only 
to  joint  estates  created  prior  to  the  act  of  1915;  but  to 
those  created  afterwards,  as  well.  The  court  said: 

"  When  this  appeal  was  argued  it  seemed  necessary 
to  decide  whether  the  ownership  of  the  property  was  in 
the  testator  and  his  wife  as  tenants  in  common  or  jointly; 
but  a  decision  of  the  Court  of  Appeals  in  Matter  of  McKel- 
way on  May  8th,  1917, 1  think,  disposes  of  all  the  questions 
involved  on  this  appeal.  That  proceeding  involved  the 
taxability  of  personal  property  held  by  McKelway  and 
his  wife  jointly,  some  of  which  they  acquired  before  and 
some  after  the  enactment  of  this  statute,  and  his  death 
was  subsequent  to  the  time  the  statute  took  effect.  There, 
as  here,  the  tax  appraiser  ruled  that  the  property  was  tax- 
able for  its  full  value  as  though  it  passed  under  the  will, 
and  the  Surrogate's  Court  reversed  the  ruling  on  the 


PABT  II  —  THE  TRANSFER  141 

theory  that  the  only  transfer  from  McKelway  was  dur- 
ing his  lifetime  on  the  creation  of  the  joint  tenancy  and 
before  the  enactment  of  the  statute.  The  Appellate  Divi- 
sion affirmed  but  the  Court  of  Appeals  reversed,  holding 
that  the  property  was  taxable  to  the  extent  of  one-half 
of  its  value,  on  the  theory  that  a  joint  owner  of  personal 
property  may  dispose  of  his  own  interest  during  his  life- 
time, and  that  the  doctrine  of  survivorship  applies  only 
if  the  jointure  is  not  thus  severed,  and  that,  therefore, 
the  absolute  ownership  of  the  undivided  half  of  the  joint 
property  which  the  deceased  joint  owner  might  have  dis- 
posed of  passed  to  the  survivor  upon  his  death,  and  not 
until  then.  The  effect  of  that  decision  is  that  the  sur- 
viving joint  tenant  has  <\t  all  times  been  the  owner  of  an 
undivided  half  interest  subject  to  the  right  of  his  cotenant 
to  take  by  survivorship  and  that  therefore  that  undivided 
interest  was  not  taxable  but  that  the  survivor  succeeds  to 
the  absolute  ownership  of  the  other  undivided  half  interest 
only  by  and  upon  the  death  of  his  co-tenant,  and  that, 
therefore,  such  interest  is  taxable.  On  that  construction 
of  the  statute  no  constitutional  question  arises,  for  it  does 
not  become  retroactive ;  and  since  an  undivided  half  inter- 
est would  be  taxable  if  they  held  the  property  as  tenants 
in  common  the  same  result  follows." 

A  motion  for  re-argument  is  pending  before  the  Appel- 
late Division  in  the  Teller  case  on  the  ground  that  the 
McKelway  case  did  not  involve  joint  properties  created 
subsequent  to  the  statute. 

6.  Escheat. 

Logically,  if  the  state  gets  the  whole,  by  escheat,  no 
tax   would   be   imposed  —  but   it    often   happens    that    a 
county  gets  the  funds   derived  from   escheats  in  which 
case  it  must  pay  the  state  its  inheritance  tax. 
People  v.  Richardson,  269  111.  275;  109  N.  E.  1033. 


142  INHERITANCE  TAXATION 

This  is  in  line  with  the  Illinois  doctrine  that  all  common 
law  transfers  are  covered  by  a  general  inheritance  tax 
statute.  There  seems  to  be  no  other  case  on  the  subject. 

Questions  of  escheat  are  often  involved  with  those  of 
presumption  of  death. 

Where  a  public  administrator  had  obtained  letters  of 
administration  over  an  estate  consisting  of  a  savings 
bank  account  deposited  in  1819,  there  is  no  presumption 
from  the  fact  that  this  money  had  never  been  demanded 
that  decedent  died  prior  to  the  inheritance  tax  act  of 
1885.  No  proof  was  presented  or  could  be  discovered  as 
to  what  had  become  of  the  woman  but  as  there  was  no 
presumption  of  death  there  could  be  neither  escheat  nor 
inheritance  tax  although  there  were  no  known  heirs. 
Matter  of  Bernard,  89  Misc.  705;  152  Supp.  716. 

The  intestate,  a  native  of  Sweden,  died  on  November 
17, 1904,  in  the  city  of  New  York,  leaving  a  small  amount  of 
money  in  a  savings  bank,  and,  so  far  as  appears,  no  widow 
or  next  of  kin  in  this  state.  Inquiry  failed  to  disclose  any 
knowledge  of  him,  his  family  or  next  of  kin.  Letters  of 
administration  were  issued  to  the  public  administrator, 
whereupon  the  Comptroller  of  the  state  of  New  York 
applied  to  the  surrogate  to  have  an  appraisal  of  the  prop- 
erty subject  to  a  transfer  tax. 

It  was  held  that  there  was  no  escheat  but  that  the 
deceased  was  presumed  to  have  next  of  kin.  The  court 
said: 

n  *  *  *  ^  Up0n  the  death  of  the  decedent  his  personal 
property  vested  in  the  administrator,  and  his  next  of  kin 
were  entitled  to  the  property  upon  proving  their  relation- 
ship to  the  deceased.  No  such  person  has  appeared  and 
no  such  person  has  been  found  to  be  in  existence.  There 
has  been  no  transfer  *  dependent  upon  contingencies  or  con- 
ditions whereby  they  may  be  wholly  or  in  part  created, 
defeated,  extended  or  abridged.'  Matter  of  Vanderbilt 


PART  II  —  THE  TRANSFER  143 

(172  N.  Y.  69;  64  N.  E.  782)  had  relation  to  a  trust 
estate  in  which  the  ultimate  beneficiaries  were  uncertain, 
and  what  is  said  in  that  case  relates  to  such  an  estate. 
The  only  uncertainty  as  to  the  ownership  of  this  prop- 
erty depends  upon  the  fact  as  to  whether  the  deceased 
left  next  of  kin.  The  presumption  is  that  the  deceased 
left  next  of  kin,  but  there  is  no  presumption  that  he  left 
a  widow  or  descendants.  It  is  presumed  therefore  that 
the  property  vested  in  the  next  of  kin  of  the  deceased, 
and  is  therefore  taxable  under  section  220  of  the  Tax 
Law,  and  as  it  does  not  appear  that  it  is  exemp't  under 
section  221  of  the  Tax  Law,  the  tax  imposed  by  subdivi- 
sion 6  (now  subd.  7)  of  section  220  applies,  and  it  is  tax- 
able at  the  rate  of  five  per  cent." 

Matter  of  Lind,  132  App.  Div.  321;  117  Supp.  49;  aff.  196  N.  Y.  570; 
90  N.  E.  1161. 

As  we  have  seen,  a  bequest  to  the  government,  which  is 
in  the  nature  of  an  escheat,  is  taxable,  under  state  statutes. 

United  States  v.  Perkins,  163  U.  S.  625;  16  S.  Ct.  Rep.  1073. 

g.     CIVIL  LAW  TRANSFERS. 

Under  the  civil  law  the  wife  has  a  one-half  interest  in 
the  gains  or  profits  of  the  matrimonial  partnership  and 
succeeds  thereto  at  her  husband's  demise,  under  an  implied 
contract  at  marriage. 

1.  Taxable. 

In  California  it  was  held  that  the  wife  succeeds  as  heir 
to  her  husband  and  that  the  transfer  is  taxable  under  the 
California  inheritance  tax  law. 

Estate  of  Mo/fit,  153  Cal.  359;  95  Pac.  653,  sustained  sub.  nom. 
Moffit  v.  Kelly,  218  U.  S.  400. 

But  the  new  California  statute  (See  Appendix)  in  effect 
July  27,  1917,  exempts  a  widow's  community  interest  in 
her  husband's  property  in  all  cases  where  death  occurs 
subsequent  to  that  date. 


144  INHERITANCE  TAXATION 

2.  Not  Taxable. 

In  Louisiana  it  is  held  that  the  succession  is  not  as  heir 
or  under  the  intestate  law  and  although  the  husband  could 
defeat  the  wife's  interest  in  his  will  as  he  did  not  do  so 
the  succession  is  not  taxable. 

The  court  said:  "  It  is  true  that  the  right  of  usufruct 
which  is  vested  in  the  surviving  spouse  is  defeasible  at 
the  will  of  the  deceased ;  but  it  is  nevertheless  a  right  con- 
firmed by  the  law  which  enters  into  and  forms  part  of  the 
marriage  contract  and  of  which  the  survivor  can  be 
deprived  by  no  one  save  the  deceased  spouse. ' ' 

Succession  of  Marsal,  118  La.  212 ;  42  So.  778. 

In  Nevada  and  Idaho  community  interests  are  neither 
defeasible  nor  is  the  succession  taxable. 

William's  Estate,  (Nevada)  161  Pac.  741. 
Kohny  v.  Dunbar,  (Idaho)  121  Pac.  544. 

3.  Gains  Acquired  in  a  Foreign  Country  Exempt. 

Still  another  view  of  the  widow's  civil  law  right  to 
"  Gananciales  "  or  joint  gains  of  the  marriage  is  found 
under  the  laws  of  Cuba  as  applied  by  the  courts  of  New 
York. 

The  Cuban  courts  held  that  the  husband  could  not 
defeat  his  wife's  right  to  joint  gains  by  will  and  at  her 
suit  awarded  her  one-half  of  his  property.  The  husband 
had  become  a  citizen  of  the  United  States  though  neither 
he  nor  his  wife  actually  resided  here.  By  his  will,  drawn 
in  English  and  probated  in  New  York,  he  recited 
that  he  was  a  resident  of  New  York  and  attempted  to 
defeat  his  wife's  right  under  the  Cuban  law.  The  New 
York  courts  followed  the  Cuban  decision  and  allowed  a 
deduction  of  one-half  from  all  the  husband's  property 
within  the  state  apparently  on  the  ground  that  all  the 


PAET  II  —  THE  TRANSFER  145 

property  had  been  acquired  in  Cuba  during  the  marriage 
and  was  merely  sent  to  this  country  for  investment 

Matter  of  Tirso  Mesa  y  Hernandez,  172  App.  Div.  467 ;  159  Supp.  59 ; 
aff.  219  N.  Y.  24. 

4.  Gains  Acquired  in  this  Country  Taxable. 

Still  another  result  was  reached  where  a  couple,  citizens 
of  France,  emigrated  to  this  country  in  1885  and  lived 
here  until  the  husband's  death  in  1907  but  never  became 
citizens.  All  their  property  was  acquired  in  this  country. 

The  court  said:  "As  to  whether  the  community  interest 
of  a  wife  in  the  property  of  her  husband  under  the  French 
law  is  such  as  to  constitute  her  the  present  and  continuing 
owner  during  their  married  life  of  an  undivided  one-half 
interest  in  his  personal  property  acquired  during  his 
residence  in  France  we  do  not  now  deem  it  necessary  to 
determine;  for,  as  we  understand,  all  of  the  decedent's 
property,  both  real  and  personal,  of  which  he  died  seized 
or  possessed,  was  acquired  after  the  removal  of  himself 
and  wife  to  this  State.  While  it  must  be  conceded  that 
some  conflict  exists  in  the  decisions  of  courts  in  foreign 
jurisdictions,  we  have  no  hesitancy  in  reaching  the  con- 
clusion that  as  to  the  property  acquired  by  the  decedent 
here  during  his  residence  with  his  wife  in  this  State,  it 
is  controlled  by  our  laws  and  upon  his  death  it  is  trans- 
ferred within  the  meaning  of  our  tax  laws. ' ' 
Matter  of  Majot,  199  N.  Y.  29;  92  N.  E.  402. 

On  this  subject  there  is  obviously  confusion  in  the  law 
which  must  be  clarified  by  further  legislation  and  litiga- 
tion. 


PART  III  —  THE  PARTIES 


A.  The  Decedent. 

1.  Residence  and  Domicile  Synonymous. 

2.  Rules  as  to  Domicile. 

3.  Application  of  the  Rules. 

a.  Factum  Without  Animus. 

b.  Animus  Without  Factum. 

c.  Animus  With  Factum. 

d.  As  to  a  Married  Woman. 

e.  As  to  a  Widow. 

f .  As  to  an  Army  Officer. 

g.  The  Burden  of  Proof. 

h.  Construction  as  Affected  by  Statute. 

B.  The  Beneficiaries  —  Generally. 

1.  As  to  Domicile  or  Residence. 

2.  Relationship  to  Decedent. 

a.  Adopted  Children. 

b.  Other  Relationships. 

3.  Personal  Exemptions. 

4.  Exemptions  to  Charities,  etc. 

a.  Charter  Powers  the  Test. 

b.  Purposes  Must  be  Brought  Within  the  Language  of  the 

Statute. 

c.  Bequests  Held  Exempt. 

d.  Bequests  Held  Taxable. 

C.  Heirs  and  Legatees. 

1.  Heirs  of  Real  Estate. 

a.  Lien  of  the  Tax. 

b.  Partition. 

c.  Equitable  Conversion. 

d.  Sale  to  Pay  the  Tax. 

e.  When  Charged  With  a  Legacy. 

f.  As  to  Aliens. 

2.  Legatees  of  Personal  Property. 

a.  Renunciation  and  Assignment. 

b.  Legacy  Impressed  With  a  Trust. 

c.  Lapsed  Legacies. 

3.  While  the  Legacy  is  in  Custodia  Legis. 

4.  From  What  Fund  Payable. 

[146] 


PART  III  — THE  PARTIES  147 

D.  Life  Estates  and  Remainders. 

1.  Examples  and  Illustrations. 

2.  Life  Estates. 

a.  Fund  from  Which  the  Tax  is  Payable. 

b.  Charged  With  an  Annuity. 

c.  Power  to  Invade  Principal. 

(1)  Suspending  Taxation  of  Remainder. 

(2)  When  Discretion  is  in  Trustee. 

(3)  When  the  Discretion  is  in  the  Life  Tenant. 

d.  With  Power  of  Appointment. 

e.  Tax  Assessed  on  Theoretical,  Not  Actual  Value. 

3.  R-emainders. 

a.  The  Law  in  Force  at  Death  of  Testator  Governs. 

b.  Vested  Remainders  Not  Taxable  When  Testator  Died  Before 

the  Statute. 

c.  Taxation  Postponed  Until  Remainderman  Gets  Possession. 

d.  Presently  Taxable. 

e.  When  Beneficiary  is  Uncertain. 

f.  Highest  Possible  Rate. 

g.  Maximum  and  Minimum  Rate. 

h.  Where  Amount  of  Remainder  is  Uncertain. 

i.   Under  Powers  of  Appointment. 

j.   Taxation  of  Full  Undiminished  Value. 

E.  Computations. 

1.  The  Basis  of  Calculation. 

a.  Mortality  Tables  and  Interest  Rate. 

b.  Compound  Interest  Rule. 

c.  Present  Worth  Rule. 

d.  The  Law  of  Discount. 

e.  Law  of  the  Chance  of  Death. 

f.  Rule  of  the  Chance  of  Death,  as  Affecting  Present  Worth. 

g.  Rule  for  Calculating  Present  Value  of  Life  Estates. 

2.  Tables  for  Computing  the  Present  Worth  of  Annuities. 

a.  Actuaries  Combined  Table  at  4%. 

b.  Actuaries  Combined  Table  at  5%. 

c.  American  Experience  Table  at  4%. 

d.  American  Experience  Table  at  5%. 

e.  Carlisle  Table  at  5%. 

f.  Carlisle  Table  at  6%. 

g.  American  Experience  Table  of  Mortality. 

3.  How  to  Use  the  Tables. 

a.  The  Necessary  Factors. 

b.  Ascertaining  the  Value. 

4.  Application  to  the  Problems  of  Inheritance  Taxation. 


148  INHERITANCE   TAXATION 


PART  III— THE  PARTIES 

A.— THE  DECEDENT. 

As  far  as  inheritance  tax  laws  are  concerned  with  the 
decedent,  apart  from  the  property  he  left  behind  and  the 
personal  representatives  who  administer  it,  the  question 
of  his  former  residence  is  chiefly  important.  The  tax  is 
imposed  as  to  residents  upon  all  personal  property  where- 
ever  situated,  while  as  to  real  estate  only  upon  that  within 
the  state.  Real  estate  therefor  never  pays  but  one  state 
inheritance  tax.  The  theory  as  to  the  personality  is  that 
"  movables  follow  the  person  "  and  being  intangible,  have 
the  situs  of  their  owner.  This  theory  though  frequently 
repeated  in  sonorous  Latin:  "  Mobilia  Personam  Sequ- 
untur,"  in  solemn  adjudications,  involves  an  inherent  ab- 
surdity. The  person  in  question  being  dead,  his  tangible 
assets  must  have  "  sequunted  "  to  that  "  bourne  whence  no 
traveller  returns. ' '  They  may  be  stored  where  the  ' '  worm 
dieth  not  and  the  fire  is  not  quenched  "  or  they  may 
have  been  wafted  up  the  golden  stairs  and  through  the 
pearly  gates ;  but  in  either  case  they  would  be  beyond  the 
reach  of  the  tax  collector. 

The  truth  is  that  the  entire  personal  estate  is  taxed  at 
the  last  domicile  because  it  is  there  that  the  entire  per- 
sonal estate  is  administered  and  is  within  the  power  of  the 
court. 

This  view  is  not  without  authority  to  support  it.    The 
maxim,  declared  the  Illinois  Court  "  is  the  outgrowth  of 
conditions  that  have  long  ceased  to  exist." 
Davis  v.  Upson,  230  HI.  327;  82  N.  E.  824. 

"It  is  a  fiction  due  to  historic  conditions  "  declared 
Justice  Holmes. 

Blackstone  v.  Miller,  188  U.  S.  189;  23  S.  Ct.  R.  277. 


PART  III  — THE  PARTIES  149 

1.  Residence  and  Domicile  Synonymous. 

The  word  "  residence  as  used  in  the  inheritance  tax 
statutes  is  synonymous  with  domicile;"  and  although  the 
statutes  use  the  word  "  resident  "  the  residence  is  deter- 
mined by  applying  the  principles  relating  to  domicile. 

People  v.  Moir,  207  111.  180;  69  N.  E.  905. 

Matter  of  Martin,  173  App.  Div.  1;  158  Supp.  915.   Appeal  dismissed, 
219  N.  Y.  557;  114  N.  E.  1071. 

This  is  obviously  just;  for  a  man  may  have  half  a 
dozen  residences  and  the  .estate  of  a  decedent  might  be 
taxed  as  the  estate  of  a  resident  in  half  a  dozen  states. 

2.  Rules  as  to  Domicile. 

The  rules  by  which  domicile  is  determined  were  well 
established  before  the  inheritance  tax  statutes  were  gener- 
ally enacted.  They  are: 

a.  That  a  person  must  have  a  domicile  somewhere. 

b.  That  he  can  have  but  one. 

c.  That   a   married  woman's   domicile   is   that   of  her 
husband  unless  she  lives  apart  from  him  and  acquires  a 
separate  residence. 

d.  That  the  domicile  of  origin  is  presumed  to  continue 
until  a  new  one  is  acquired. 

e.  That  the  burden  of  proof  rests  upon  the  party  alleg- 
ing a  change  of  domicile. 

f.  That  to  sustain  this  burden  both  a  change  of  residence 
(factum)  and  intent  to  change  the  domicile  (animus)  must 
be  shown. 

"  The  existing  domicile,  whether  of  origin  or  selection, 
continues  until  a  new  one  is  acquired  and  the  burden  of 
proof  rests  upon  the  party  who  alleges  a  change.  The 
question  is  one  of  fact  rather  than  law  and  it  frequently 
depends  upon  a  variety  of  circumstances  which  differ  as 
widely  as  the  peculiarities  of  individuals. " 
Matter  of  Newcomb,  192  N.  Y.  238 ;  84  N.  E.  950. 


150  INHERITANCE  TAXATION 

"  To  effect  a  change  of  domicile  for  the  purpose  of 
succession  there  must  be  not  only  a  change  of  residence 
but  an  intention  to  abandon  the  former  domicile  and 
acquire  another  as  the  sole  domicile.  There  must  be  both 
residence  in  the  alleged  adoption  domicile  and  intention 
to  adopt  such  place  of  residence  as  the  sole  domicile. 
Residence  alone  has  no  effect  per  se,  though  it  may  be 
most  important  as  a  ground  from  which  to  infer  intention. 
Length  of  residence  will  not  alone  effect  the  change. 
Intention  alone  will  not  do  it,  but  the  two  taken  together 
do  constitute  a  change  of  domicile. " 

Dupuy  v.  Wurtz,  53  N.  Y.  556. 

Domicile  is  always  a  question  of  fact. 
Matter  of  Martin,  219  N.  Y.  557;  114  N.  E.  1071. 

3.  Applications  of  the  Rules, 
a.     FACTUM  WITHOUT  ANIMUS. 

Where  a  resident  of  Illinois  had  decided  to  remove  from 
the  state  to  the  home  of  his  -daughter  as  soon  as  he  had 
settled  his  business ;  but  before  he  did  so  was  taken  ill  and 
was  removed  to  his  daughter's  home  for  care  and  medical 
treatment  and  died  soon  after,  everything  being  left  undis- 
turbed at  his  old  home, —  held  a  resident  of  Illinois. 
People  v.  Moir,  207  111.  180;  69  N.  E.  905. 

"  The  mere  fact  that  a  person  who  had  resided  chiefly 
in  the  city  of  New  York  having  been  left  a  bequest  of 
household  furniture  leased  a  house  in  the  City  of  London 
for  the  purpose  of  storing  it  did  not  make  him  a  resident 
of  England  so  as  to  exempt  his  estate  from  a  transfer  tax, 
especially  when  letters  written  shortly  before  his  death 
show  that  he  considered  himself  to  be  an  American  citizen 
and  regarded  New  York  as  his  home." 

Matter  of  Martin,  173  App.  Div.  1;  158  Supp.  915.    Appeal  dismissed, 
219  N.  Y.  15;  114  N.  E.  1071. 


PART  III  — THE  PARTIES  151 

Where  deceased  had  frequently  declared  that  he 
regarded  New  York  as  his  home  though  he  lived  in  Paris 
the  court  said: 

"  The  fact  that  he  resided  in  Paris  most  of  the  time 
from  1880  while  important  to  be  considered,  certainly  is 
not  controlling,  because  domicile  may  exist  without  actual 
residence  but  never  without  intent." 

Matter  of  U.  S.  Trust  Co.  v.  Hart,  150  App.  Div.  413;  135  Supp.  81; 
aff.  208  N.  Y.  617;  102  N.  E.  1115. 

So  the  residence  of  a  "  commuter  "  is  held  to  be  his 
country  home  in  New  Jersey. 

Matter  of  McCullough,  N.  Y.  L.  J.,  Oct.  27,  1914. 

b.     ANIMUS  WITHOUT  FACTUM. 

The  deceased,  an  Episcopal  Bishop  in  charge  of  the 
branch  of  the  church  in  Mexico,  described  himself  in  his 
will  as  *  *  now  in  the  City  of  New  York  but  for  many  years 
a  resident  of  Mexico."  After  making  the  will  he  returned 
to  Mexico  and  resumed  his  labors, —  held  not  a  resident  of 
New  York. 

Matter  of  Eiley,  86  Misc.  628 ;  148  Supp.  623. 

The  deceased  several  times  prior  to  his  death  declared 
that  he  was  a  resident  of  Grand  Island,  Vermont,  and  the 
evidence  showed  that  he  intended  to  move  there  but  he 
never  actually  did  so.  His  brother  owned  a  home  there 
and  died  devising  it  to  the  decedent  who  made  all  prepara- 
tions to  go  there  and  live  but  never  went  and  died  at  his 
home  in  New  York.  Held  a  resident  of  New  York. 
Matter  of  Butherford,  88  Misc.  414;  150  Supp.  734. 

The  will  of  the  deceased  was  probated  in  Washington 
where  she  expressed  her  desire  to  reside.  The  court  said: 
1 '  There  is  no  doubt  in  my  mind  that  Mrs.  Morgan  desired 
to  have  her  legal  domicile  with  all  its  advantages  in  Wash- 
ington, D.  C.,  and  at  the  same  time  she  wished  to  resume 


152  INHERITANCE  TAXATION 

her  original  residence  in  New  York.  There  is  very  little 
contention  as  to  the  fact  that  Mrs.  Morgan  at  the  time  of 
her  death  was  actually  physically  resident  in  the  City  of 
New  York  and  that  her  sojourns  elsewhere  were  not  in  law 
tantamount  to  residence." 

Matter  of  Morgan,  95  Mise.  451;  159  Supp.  105. 

The  deceased  lived  with  his  family  in  Cuba  but  to  pro- 
tect his  property  he  fraudulently  procured  citizenship 
papers  upon  affidavits  that  he  had  lived  in  New  York  City 
for  the  necessary  length  of  time.  He  drew  his  will  in 
English  and  therein  recited  that  he  was  a  resident  of 
New  York  and  his  will  was  probated  in  that  state.  He 
did  all  that  a  man  could  do  to  establish  a  * '  legal  ' '  domicile 
in  New  York  without  living  there.  Held  a  resident  of 
Cuba.  The  adjudication  as  to  citizenship  could  not  be 
attacked  and  it  was  held  that  even  though  the  deceased 
fraudulently  established  a  domicile  in  New  York  for  that 
purpose,  his  continued  actual  residence  in  Cuba  changed 
it  back  to  that  domicile  of  origin  after  citizenship  had 
been  acquired. 

Matter  of  Hernandez,  172  App.  Div.  467 ;  159  Supp.  59 ;  aff.  219  N.  Y. 
mem. 

So  it  was  held  that  where  testator  had  a  home  in  New 
Jersey  that  he  was  a  nonresident  of  this  State,  although 
he  described  himself  in  his  will  and  codicils  as  a  resident 
of  the  city  and  county  of  New  York. 

Matter  of  Eogers,  83  App.  Div.  642;  82  Supp.  1113;  affirming  N.  Y. 
L.  J.,  Jan  24,  1903. 

c.     ANIMUS  WITH  FACTUM. 

Deceased  moved  to  France  in  1905  and  remained  there 
until  his  death.  There  was  no  evidence  of  any  intention 
to  return.  Held  a  nonresident. 

Matter  of  Rothschild,  86  Misc.  364;  148  Supp.  368. 


PART  III  — THE  PARTIES  153 

The  deceased  had  been  a  resident  of  New  York.  For 
some  years  she  was  confined  in  an  insane  asylum  in  that 
state.  In  1911  she  was  discharged  and  on  the  next  day 
made  a  trust  deed  of  her  property  reserving  a  life  interest. 
She  then  went  to  California  where  she  resided  until  her 
death,  three  years  later.  After  her  death  the  trust  deed 
was  set  aside  by  the  California  court  on  the  ground  that 
the  donor  was  insane  when  she  made  it.  The  state  comp- 
troller contended  that  if  the  deceased  was  not  competent 
to  make  a  deed  she  could  not  have  the  necessary  intent  to 
change  her  residence;  but  the  Surrogate  held  to  the  con- 
trary and  was  sustained  on  appeal. 

Matter  of  Balch,  93  Misc.  419;  156  Supp.  1006;  aff.  175  App.  Div. 
933. 

Deceased  had  lived  in  an  apartment  hotel  in  New  York 
City  where  his  business  was.  In  1910  he  bought  land  at 
Long  Branch  and  began  building  a  house.  In  April,  1911, 
he  went  to  live  with  his  son  at  Long  Branch  and  did  not 
return  to  New  York  until  his  death  the  following  Septem- 
ber. Held  that  the  intent  and  act  were  sufficient  to  change 
his  residence  to  New  Jersey. 

Matter  of  Wise,  165  App.  Div.  420;  150  Supp,  782. 

d.  As  TO  A  MARRIED  WOMAN. 

When  a  wife,  though  not  legally  separated  from  her 
husband,  had  lived  apart  from  him  in  West  Virginia  for 
26  years  and  he  never  visited  her  save  on  the  occasion  of 
their  daughter's  marriage,  and  the  husband  lived  in  New 
York.  Held  that  the  wife  had  acquired  a  separate  domicile 
and  was  a  nonresident. 

Matter  of  Crosby,  85  Misc.  679 ;  148  Supp.  1045. 

e.  As  TO  A  WIDOW. 

'  *  Marriage  is  an  international  institution  and  more  than 
a  contract.  It  is,  as  Lord  Stowell  said  in  Dalrymple  v. 


154  INHEKITANCE  TAXATION 

Dalrymple  (2  Hagg.  Con.,  63),  '  principium  urbis  et  quasi 
seminarium  reipublicce.'  Story  confirms  this  conception 
of  the  marital  relation  (sec.  108,  Conf.  Laws;  Wharton, 
Conf.  Laws,  sec.  127,  and  see  Hyde  v.  Hyde,  1  P.  &  D.,  130, 
133).  Consequently  in  all  systems  of  law  marriage  creates 
a  novel  matrimonial  domicil  for  the  wife  wherever  her 
prior  domicil  may  have  been.  At  common  law  the  matri- 
monial domicil  of  a  wife  is  that  of  the  husband  at  the  time 
of  her  marriage  (Westlake,  Priv.  Internal .  Laiv,  sees.  361, 
366 ;  Whart.  Conf.  Law,  sec.  189 ;  Dicey,  Conf.  Laws,  p.  511 ; 
Bentwich,  Domicile,  p.  33;  Merrill,  Conf.  Law,  68). 

Whatever  Mrs.  Green's  domicile  of  origin,  or  her  later 
imputed  domicile  of  her  father's  subsequent  choice,  may 
have  been,  it  was  fully  supplanted  by  her  matrimonial 
domicil  which  was  Vermont  (Story,  Conf.  Laws,  sec.  46; 
Wharton,  Conf.  Laws,  sec.  189 ;  Dicey,  Conf.  Laws,  pp.  640, 
643;  Savigny,  Priv.  Internat.  Law,  p.  56;  Dalhousie  v. 
M'Doual,  7  C.  &  F.,  817;  Telverton  v.  Yelverton,  1  Sw.  & 
Tr.,  574;  Whitcomb  v.  Whitcomb,  2  Cur.,  351;  Hunt  v. 
Hunt,  72  N.  Y.  217,  242). 

"  The  husband  of  decedent  lived  at  the  matrimonial 
domicil  prior  to  the  time  of  his  death,  and  there  he  died 
and  was  interred  in  the  last  resting  place  of  his  respected 
and  respectable  fathers.  A  widow,  in  the  absence  of  ade- 
quate proof  to  the  contrary,  retains  the  last  domicil  of  her 
husband.  The  Roman  Law  on  this  point,  '  vidua  mulier 
amissi  mariti  domicilium  retinet  y  (D.  30,  1,  22),  is  cited 
by  Story  with  express  approval,  and  it  is  adopted  in  all 
countries  without  exception.  It  is  needless  to  enlarge  on  a 
proposition  so  universally  accepted  in  all  systems  of  law. 

"  That  a  widow  being  again  sui  juris  and  no  longer  in 
law  or  in  fact  sub  potestate  viri  may  change  her  domicil 
(Gout  v.  Zimmerman,  5  N.  C.,  440;  Warrender  v.  War- 
render,  2  C.  &  F.,  488)  is  not  now  questionable." 

Matter  of  Nettie  Green,  99  Misc.  582;  aff.  —  App  Div.  — ,  without 
opinion,  June  30,  1917. 


PAET  III  —  THE  PARTIES  155 

f.     As  TO  AN  ARMY  OFFICER. 

The  late  General  Frederick  Dent  Grant  had  his  domicile 
for  many  years  in  New  York  City  where  he  held  public 
office.  He  then  returned  to  the  United  States  army.  It 
had  been  a  rule  that  one  cannot  gain  or  lose  a  residence 
while  in  the  army  or  navy.  Thereafter  the  General  had 
his  headquarters  at  the  Federal  station  on  Governor's 
Island  in  New  York  harbor,  where  he  lived  with  his  family. 
He  was  -about  to  retire,  intended  to  buy  a  house  at  Wash- 
ington, D.  C.,  and  had  shipped  some  of  his  furniture  and 
his  uniforms  thither.  While  on  his  way  to  Washington  he 
was  taken  ill  and  died  at  a  hotel  in  New  York  City.  The 
court  said: 

"  When  General  Grant  gave  up  his  home  in  New  York 
City  and  took  up  his  permanent  and  only  residence  with 
his  entire  family  at  his  headquarters  at  Governor's  Island 
he  was  thereafter  actually  living  in  Federal  territory.  In 
the  judicial  determination  of  the  last  domicile  of  a  general 
officer  in  the  regular  military  service  of  our  Federal  gov- 
ernment many  things  are  entitled  to  consideration  which 
would  not  be  pertinent  to  a  determination  of  the  domicile 
of  a  civilian.  The  private  courts  of  all  the  great  nations 
do,  I  think,  recognize  a  distinction  in  their  application  of 
the  principle  of  domicile  to  the  military  status.  I  am  quite 
aware  that  it  is  now  a  general  rule  that  a  soldier  does  not 
acquire  a  domicile  in  the  place  where  he  is  stationed,  but 
this  is  not  to  say  that  an  American  officer  may  not  acquire 
a  domicile  in  Federal  territory  of  the  United  States  if  his 
actual  residence  in  such  federal  territory  is  coupled  with 
animus  manendi  there  after  his  duty  expires.  The 
ordinary  modern  rule  —  that  a  soldier  does  not  change  his 
domicile  by  foreign  service  —  is  in  any  event  a  mere  pre- 
sumption which  may  be  rebutted  in  any  case;  it  is  not 
properly  a  rule  of  law." 

Ames  v.  Duryea,  6  Lans.  155;  aff.  61  N.  Y.  609. 

Matter  of  Grant,  83  Misc.  257;  144  Supp.  567;  aff.  166  App.  Div. 
921;  151  Supp.  1119. 


156  INHERITANCE  TAXATION 

g.     THE  BURDEN  OF  PROOF. 

The  burden  of  proof  rests  npon  the  party  asserting 
change  of  domicile. 

Heaton  on  Surrogate's  Courts,  3d  Ed.,  p.  78. 

So,  where  the  deceased  lived  part  of  the  time  in  New 
York  and  part  of  the  time  in  Bermuda  and  made  con- 
flicting statements  as  to  his  intent,  the  court  said :  "It 
appears  that  the  decedent  in  or  about  1904  acquired  a 
domicile  of  choice  in  the  state  of  New  York.  This  being  so 
the  onus  of  proving  a  change  a  domicile  is  upon  those 
asserting  it.  The  burden  has  not  been  sustained;  and, 
therefore,  the  last  established  domicile  of  choice  is  pre- 
sumed to  continue." 

Matter  of  Norton,  96  Misc.  152;  159  Supp.  619;  aff.,  no  opinion,  — 
App.  Div.  — ;  162  Supp.  1133. 

The  decedent  had  a  house  on  Fifth  Avenue  where  he 
lived  with  his  wife  until  her  death  in  1905.  After  that  he 
traveled  much.  He  swore  off  his  personal  taxes  in  New 
York  and  made  conflicting  statements  as  to  his  residence 
on  various  occasions.  He  had  a  farm  in  Kentucky  and  was 
building  a  summer  home  at  Easthampton.  He  was  seldom 
at  his  house  in  New  York  which  was  occupied  by  members 
of  his  family  occasionally  and  was  in  charge  of  a  care- 
taker. All  this  was  held  insufficient  to  sustain  the  burden 
of  proof  required  to  show  a  change  of  domicile. 
Matter  of  Harkness,  N.  Y.  L.  J.,  Feb.  17,  1917. 

h.     CONSTRUCTION  AS  AFFECTED  BY  STATUTE. 

So  many  important  estates  escaped  taxation  because  the 
decedent  while  doing  business  in  New  York  or  coming  there 
for  pleasure  maintained  a  "  domicile  "  in  another  state 
that  an  attempt  was  made  by  Chapter  551,  L.  1916,  to 
declare  that  a  person  should  be  "  deemed  "  a  resident. 
"  If  and  when  such  person  shall  have  dwelt  or  shall  have 


PABT  III  — THE  PARTIES  157 

lodged  in  this  state  during  and  for  the  greater  part  of 
any  period  of  twelve  consecutive  months  in  the  24  months 
next  preceding  his  or  her  death." 

This  section  came  before  the  New  York  Surrogate's 
Court  for  construction  in  the  Matter  of  Hettie  R.  Green 
(supra),  where  the  amount  of  tax  sought  to  be  collected  by 
the  state  comptroller  is  $5,000,000, —  an  amount  equal  to 
one-fifth  of  all  the  inheritance  taxes  collected  by  all  the 
states  in  1913. 

The  evidence  showed  that  the  twenty-four  months 
immediately  prior  to  her  death  she  spent  approximately 
as  follows:  She  left  New  York  City  for  Bellows  Falls 
early  in  July,  1914,  and  remained  there  until  about  August 
18 ;  she  returned  to  New  York  City  on  August  18, 1914,  and 
stayed  here  until  about  July,  1915 ;  from  July  20  to  Sep- 
tember 1,  1915,  she  stayed  at  Bellows  Falls  and.  vicinity; 
she  returned  to  New  York  about  September  1,  1915,  and 
stayed  here  until  about  October  1,  when  she  went  to 
Hoboken  and  remained  there  until  November  24,  1915; 
from  November  24,  1915,  until  the  date  of  her  death,  July 
3,  1916,  she  stayed  in  New  York  City. 

The  comptroller  contended  that  this  brought  the  ease 
squarely  within  the  statute,  but  the  learned  surrogate  of 
New  York  County  held  otherwise.  In  the  course  of  his 
opinion  he  said : 

"  I  cannot,  however,  agree  with  the  contention  of  the 
state  comptroller  that  the  Legislature  by  the  amendment 
above  quoted  intended  that  a  person  who  dwelt  or  lodged 
here  for  a  period  of  six  months  and  one  day  of  the  twenty- 
four  months  immediately  preceding  such  person's  death 
is  to  be  deemed  a  resident  of  this  state  for  the  purpose  of 
the  transfer  tax.  Such  an  interpretation  would  result  in 
such  manifest  injustice  that  I  should  be  unwilling  to  accept 
it,  unless  the  words  of  the  statute  were  so  clear  and 
unequivocal  as  to  admit  of  no  other  interpretation.  It 


158  INHERITANCE  TAXATION 

would,  for  instance,  make  a  person  a  resident  of  this  state 
and  his  estate  subject  to  taxation  as  such,  if  he  lived  here 
for  six  months  and  one  day  and  then  sold  his  home  here, 
bought  a  home  in  New  Jersey  and  went  immediately  to  live 
in  the  New  Jersey  home  and  lived  there  until  the  date  of 
his  death,  seventeen  months  and  twenty-nine  days  after- 
wards. I  will  not,  therefore,  assume  that  the  Legislature 
intended  the  effect  which  would  necessarily  result  from  the 
interpretation  contended  for  by  the  state  comptroller.  I 
think  that  the  use  of  the  word  "  consecutive  "  shows  that 
it  was  the  intention  of  the  Legislature  to  make  it  essential 
that  a  person  live  in  this  state  some  part  of  each  of  twelve 
consecutive  months,  and  in  the  aggregate  the  greater  part 
of  such  twelve  months  of  the  twenty-four  immediately 
prior  to  his  death  before  he  would  be  deemed  a  resident 
for  the  purpose  of  the  Transfer  Tax  Act.  As  the  statute 
was  not  intended  to  apply  to  a  case  where  the  residence 
of  the  decedent  was  not  in  dispute,  but  only  to  those  cases 
where  it  was  contended  on  behalf  of  the  estate  of  a  decedent 
that  he  was  a  nonresident,  this  interpretation  would  apply 
only  to  cases  where  the  question  of  residence  was  in  dis- 
pute, and  as  the  Legislature  makes  the  legal  effect  of  the 
facts  conclusive  upon  the  question  of  residence,  I  am 
inclined  to  that  interpretation  which  bears  less  heavily 
upon  the  taxpayer." 

Matter  of  Green,  99  Misc.  582;  aff.  without  opinion,  —  App.  Div. 
— ,  June  30,  1917. 

B.— BENEFICIARIES  GENERALLY. 

1.  As  to  Domicile  or  Residence. 

In  practice,  inheritance  taxes  have  never  yet,  in  this 
country,  been  imposed  upon  beneficiaries  of  a  nonresident 
decedent  merely  because  they  were  domiciled  within  the 
state  and  there  are  authorities  to  the  effect  that  the  state 
has  no  power  to  impose  such  a  tax. 
State  v.  Brim,  57  N.  C.  300. 


PART  III  — THE  PARTIES  159 

Where  the  testator  was  a  resident  the  court  said: 
"  The  property  was  within  this  state  and  the  transfer 
was  by  a  resident.  The  nieces  take  the  remainders  in 
possession  or  enjoyment  under  the  laws  of  this  state  and 
under  an  instrument  made  here.  It  is  not  important,  there- 
fore, whether  they  now  reside  here  or  elsewhere. " 

Matter  of  Green,  153  N.  Y.  223,  228;  47  N.  E.  292. 

Obviously,  however,  if  the  tax  is  on  the  right  to  receive, 
the  resident  legatees  of  a  nonresident  testator  might  be 
subject  to  the  tax.  This  was  pointed  out  in  Bitting er's 
Estate,  129  Pa.  St.  338,  345 ;  18  A.  132,  where  the  court  said : 

"  It  may  be  that  the  state  might  impose  a  succession  tax 
upon  every  citizen  of  the  state  who  succeeds  to  either  real 
or  personal  estate  from  whatever  source  received." 

And  the  reasoning  of  the  court  in  People  v.  Griffith,  245 
111.  532 ;  92  N.  E.  313,  would  seem  to  be  in  accord  with  the 
theory. 

In  practical  application,  however,  the  residence  of  the 
beneficiary  is  regarded  as  of  no  importance  and  the  fact 
that  a  resident  is  executor  of  a  nonresident's  estate  does 
not  make  that  estate  taxable. 

Commonwealth  v.  Peebles,  134  Ky.  121;  119  S.  W.  774. 

2.  Relationship  to  the  Decedent. 

a.    ADOPTED  CHILDREN. 

As  we  have  seen  the  tax  is  almost  universally  appor- 
tioned to  bear  more  heavily  on  distant  relatives  and 
strangers.  Much  litigation  has  arisen  over  the  adoption  or 
mutual  acknowledgment  of  a  child. 

The  adoption  need  not  be  under  the  laws  of  the  state 
but  must  be  in  conformity  with  them. 

Matter  of  Butler,  58  Hun   400;  12  Supp.  201;  aff.  136  N.  Y.  649; 
32  N.  E.  1016. 


160  INHEKITANCE  TAXATION 

Wh«re  tlie  statute  required  that  both  parents  of  the  child 
must  be  dead  before  it  could  be  adopted  by  mutual 
acknowledgment;  held,  that  adopted  nieces  whose  mother 
was  living  must  pay  at  the  5  per  cent  rate. 

Matter  of  Bolton,  210  N.  Y.  618;  104  N.  E.  1127. 

A  grandniece  proved  to  have  been  adopted  by  mutual' 
acknowledgment  is  taxable  as  a  child. 

Matter  of  Kirtland,  94  Misc.  58;  157  Supp.  378. 

The  court  holds  that  the  mutually  acknowledged  relation 
of  parent  did  not  exist  where  children  lived  with  their 
uncle  and  aunt,  and  always  referred  to  them  as  uncle  and 
aunt,  and  the  latter  referred  to  the  former  as  niece  and 
the  terms  father,  mother  or  daughter  were  never  used. 

Matter  of  Deutsch,  107  App.  Div.  192;  95  Supp.  65. 

The  mere  fact  that  the  testator  lived  with  his  sister  and 
her  children  as  one  family,  that  the  household  expenses 
were  met  out  of  a  common  fund  to  which  each  contributed, 
and  that  the  sister  died,  and  from  that  time  one  of  the 
children  had  charge  of  the  household  affairs  and  they  con- 
tinued to  live  together  as  one  family  down  to  the  death 
of  the  testator,  and  that  the  testator  was  very  affectionate 
with  his  nieces,  is  not  enough  to  show  the  mutually  acknowl- 
edged relation  of  a  parent,  as  the  testator  did  not  take 
them  into  his  family  and  support,  educate  and  maintain 
them. 

Matter  of  Moulton,  11  Misc.  694;  33  Supp.  578. 

Where  there  was  a  bequest  of  a  life  estate  to  a  nephew 
with  a  remainder  over  in  case  he  left  "  no  children  him 
surviving  "  and  the  nephew  adopted  a  child  it  was  held 


PAST  III  — THE  PAETIES  161 

that  such  child  could  not  be  deemed  the  child  of  testator's 
nephew  so  as  to  defeat  the  rights  of  the  remaindermen. 
Matter  of  Leask,  130  App.  Div.  898;  197  N.  Y.  193;  80  N.  E.  662. 

The  proceeding  of  adoption  and  the  relation  estab- 
lished AS  personal  to  the  foster  parent  and  the  child.  The 
statute  gives  to  them  all  the  rights  to  be  derived  from  the 
legal  relation  of  parent  and  child,  including  the  "  right  of 
inheritance  from  each  other."  The  right  is  not  given, 
however,  either  expressly  or  by  implication,  to  the  child, 
to  inherit  through  the  foster  parent  from  his  collateral 
kin.  In  other  words,  the  child  becomes  heir  only  to  the 
foster  parent.  But  a  stranger  to  the  adoption  proceed- 
ings, who  has  never  recognized  the  existence  of  any  arti- 
ficial relation,  should  not  have  his  property  diverted  from 
the  natural  course  of  descent. 

Kettell  v.  Baxter,  50  Misc.  428;  100  Supp.  529. 

It  was  held  in  a  recent  New  York  case  that  the  word 
"  sister  "  was  not  intended  to  include  a  person  adopted 
by  decedent's  parents.  Robert  Benson  described  Miss 
Browne  in  his  will  as  his  niece.  She  was  the  grandchild 
of  his  mother  to  whom  she  stood  in  the  mutually  acknowl- 
edged relation  of  an  adopted  daughter.  It  was  held,  how- 
ever, that  this  act  of  the  mother's  did  not  make  her  a 
sister  of  the  decedent  by  adoption. 

Matter  of  Benson,  N.  Y.  L.  J.,  Feb.  3,  1917. 

Where  a  legatee  was  an  orphan  and  had  lived  in  a  family 
of  the  testator  since  the  age  of  six  years,  and  was  always 
treated  like  one  of  the  family,  she  is  one  to  whom  the 
testator  stood  in  the  mutually  acknowledged  relation  of 
a  parent,  although  she  was  designated  by  the  will  as  a 
"  friend  "  and  not  a  "  daughter." 

Matter  of  Wheeler,  1  Misc.  450;  22  Supp.  1075. 
6 


162  INHERITANCE  TAXATION 

The  mutually  acknowledged  relation  of  parent  was  found 
to  exist  where  the  niece  when  twenty-two  years  old  had 
gone  to  live  with  her  aunt,  was  a  member  of  the  family 
for  twenty-eight  years,  and  always  addressed  her  as 
"Auntie  ";  and  where  during  her  residence  there  the 
niece  married  and  with  her  hus'band  continued  to  live 
with  her  aunt,  the  testatrix,  who  supported  the  household. 
Matter  of  Spencer,  4  Supp.  395. 

The  statutes  usually  provide  that  the  relationship  must 
be  begun  before  the  tenth  birthday  so  that  the  above  case 
will  seldom  prove  authoritative. 

Where  a  maiden  aunt  was  in  possession  of  a  farm  as 
a  housekeeper  as  tenant  in  common  with  her  adult 
nephews,  the  acknowledged  relation  of  parent  was  not 
found  in 

Matter  of  Sweetland,  20  Supp.  310. 

The  fact  that  the  beneficiaries  were  taken  into  their 
testator 's  family  in  their  infancy,  were  reared,  educated 
and  provided  for  as  children,  were  called  by  her  name  and 
adopted  the  same,  and  were  treated  as  her  children,  and 
that  the  testatrix  spoke  of  and  to  them  as  her  daughters 
and  furnished  them  on  their  marriage  with  their  wedding 
and  outfit  as  is  customary,  is  sufficient  to  bring  them  within 
the  words  of  the  statute. 

Matter  of  Nichol,  91  Hun,  134;  36  Supp.  538. 

Stepdaughters  of  a  testatrix  who  had  lived  with  her 
for  a  long  time  and  called  her  "  mother  "  were  found  to 
stand  in  the  mutually  acknowledged  relation  of  parent, 
while  another  stepdaughter  who  was  married  and  did  not 
live  with  her  did  not  come  within  that  class,  in 
Matter  of  Capron,  10  Supp.  23. 

The  court  said  in  the  Matter  of  Butler:  "  The  wrord 
'  mutual  '  in  this  statute  has  no  abstruse  signification.  It 


PART  III  — THE  PARTIES  163 

means  and  requires  reciprocity  of  action,  correlation,  and 
interdependence,  and  finds  its  best  illustration  and  appli- 
cation in  the  relations  existing  between  parents  and  chil- 
dren which  are  always  mutual." 

Matter  of  Butler,  58  Hun,  400,  12  Supp.  201;  aff.  136  N.  Y.  649;  32 
N.  E.  1016. 

To  the  same  effect  is: 
Matter  of  Stilwell,  34  Supp.  1123. 

b.     OTHER  RELATIONSHIPS. 

The  child  of  an  adopted  child  is  a  "  lineal  descendant." 

Winchester's  Estate,  140  Cal.  468 ;  74  Pac.  10. 
Matter  of  Cook,  187  N.  Y.  253;  79  N.  E.  991. 

Step  children  are  not  included  in  the  word  "  children  " 
in  a  statute  and  are  not  so  classed  unless  proved  to  have 
been  adopted. 

Matter  of  Wheeler,  115  App.  Div.  616 ;  100  Supp.  1044. 
Matter  of  Hardner,  124  App.  Div.  77. 

Children  of  an  illegitimate  daughter  are  not  "  lineal 
descendants,"  though  born  in  lawful  wedlock. 

Matter  of  Roebuck,  79  Misc.  589 ;  140  Supp.  1107. 
Matter  of  Beach,  154  N.  Y.  252;  48  N.  E.  516. 

The  word  children  may  be  held  to  include  grand- 
children. 

Matter  of  Bender,  44  Misc.  79;  89  Supp.  731. 

Or  to  exclude  them,  according  to  the  intent  of  the 
testator. 

Matter  of  King,  217  N.  Y.  358. 

The  widow  of  an  adopted  son  is  "  widow  of  a  son." 

Matter  of  Duryea,  128  App.  Div.  205;  112  Supp.  611. 

But  a  divorced  wife  of  a  son  is  not. 
Matter  of  Merritt,  155  App.  Div.  228;  140  Supp.  13. 


164  INHERITANCE  TAXATION 

If,  however,  the  wife  procured  a  divorce  in  another  state 
on  grounds  other  than  adultery  her  rights  are  not  affected. 

Van  Blarican  v.  Larson,  130  Supp.  925. 

The  widow  of  a  deceased  legatee  is  not  entitled  to  share 
in  the  legacy  her  husband  would  have  taken  had  he  been 
living  at  the  time  of  the  payment  thereof,  since  the  primary 
meaning  of  the  phrase  "  next  of  kin  "  includes  neither  a 
widow  nor  a  husband. 

Matter  of  Devoe,  171  N.  Y.  281;  63  N.  E.  1102. 

Where  a  will  provided  that  the  residue  sjiould  be 
11  equally  divided  among  and  paid  to  the  persons,  entitled 
thereto  as  their,  or  either  of  their,  next  of  kin,  according 
to  the  laws  of  New  York,  and  as  if  the  same  were  personal 
property  and  they  or  either  of  them  had  died  intestate." 
Held,  that  the  widow  was  not  entitled  to  any  portion  of 
said  residue. 

Murdoch  v.  Ward,  67  N.  Y.  387. 

Where  will  gave  all  decedent's  property  "  to  those  per- 
sons, relatives  of  my  full  blood  only,  who  would  be  entitled 
to  receive  my  personal  estate  in  case  of  my  death  unmar- 
ried and  intestate,"  a  nephew  of  testator,  who  was  also 
a  stepson,  was  taxed  as  a  nephew  and  not  as  a  stepson. 
Matter  of  LinUetter,  134  App.  Div.  309;  118  Supp.  878. 

A  legacy  to  the  husband  of  a  daughter  was  held  exempt 
under  an  early  statute  although  the  daughter  died  before 
the  testator. 

Matter  of  Woolsey,  19  Abb.  N.  C.  232. 
Matter  of  McGarvey,  6  Dem.  145. 

And  this  was  so  even  if  the  husband  remarried  prior  to 
the  transfer  to  him. 

Matter  of  Hay,  13  Misc.  480;  35  Supp.  481. 


PART  III  — THE  PARTIES  165 

3.  Personal  Exemptions. 

Most  of  the  statutes  allow  an  exemption  of  $5,000  or 
more  on  bequests  to  near  relatives  and  from  $500  to  $1,000 
to  collaterals  and  strangers.  Though  the  law  makers  often 
use  language  inexcusably  obscure  these  are  generally  con- 
strued to  apply  to  each  beneficiary  unless  specifically 
declared  otherwise. 

McDaniel  v.  Hearn,  120  Ark.  288;  179  S.  W.  337. 

Prior  to  the  New  York  amendment  of  1915  and  under 
Chapter  732,  L.  1911,  property  passing  by  gift  in  con- 
templation of  death  was  regarded  as  a  distinct  transfer 
from  the  bequests  under  the  will.  This  resulted  in  a 
second  exemption  to  the  same  beneficiary  and  the  graded 
rates  were  fixed  as  though  there  were  two  distinct  estates. 
Matter  of  Hodges,  215  N.  Y.  447;  109  N.  E.  559. 

The  same  rule  was  applied  to  transfers  by  trust  deed 
reserving  a  life  estate  but  no  powder  of  revocation. 
Matter  of  Meserole,  98  Misc.  105 ;  162  Supp.  414. 

It  was  held  to  apply  to  all  transfers  not  by  will  or 
intestacy. 

Matter  of  Hermanni,  N.  Y.  L.  J.,  Jan.  16,  1915;  aff.  168  App.  Div. 
mem. ;  153  Supp.  1119. 

Although  the  tax  was  to  be  assessed  in  one  proceeding 
at  the  death  of  the  donor  or  grantor. 
Matter  of  Leeds,  N.  Y.  L.  J.,  April  23,  1913. 

But  this  rule  was  limited  by  the  Court  of  Appeals  to 
transfers  by  deed,  as  in  the  Meserole  case  and  transfers  in 
contemplation  of  death,  which  accrue  prior  to  the  death  of 
the  testator.  So,  where  property  passed  by  will  which  also 
exercised  a  power  of  appointment;  held,  that  the  exemp- 
tion and  graded  rates  were  to  be  fixed  on  the  basis  of  one 
transfer  only  —  not  on  two. 

Matter  of  Winthrop,  164  App.  Div.  898;  148  Supp.  1151;  aff.  214 
N.  Y.  712. 


166  INHERITANCE  TAXATION 

The  same  ruling  was  made  where  there  was  a  gift  to 
take  effect  at  death. 

Matter  of  Dana,  215  N.  Y.  461. 

Where  there  is  a  devise  to  remaindermen  as  a  class  but 
one  exemption  is  allowed  under  the  New  York  rule  for 
taxation  at  the  highest  possible  rate. 

Matter  of  Hogg,  156  App.  Div.  301;  141  Supp.  119. 

And  where  remaindermen  who  may  possibly  succeed 
have  already  received  an  exemption  under  bequests 
received  from  other  provisions  of  the  will  no  exemption 
is  allowed  as  it  may  turn  out  there  will  be  none  in  addition 
to  that  already  received. 

Matter  of  Coutts,  N.  Y.  L.  J.,  Dec.  15,  1914. 

For  further  discussion  of  taxation  at  highest  possible 
rate  see  Remainders  Post  p.  199. 

The  New  York  Statute  now  gives  each  beneficiary  but 
one  exemption  no  matter  whether  the  transfer  was  partly 
by  will  and  partly  by  trust  deed  or  gift  in  contemplation 
of  death.  Ch.  664,  L.  1915. 

When  the  legatee  receives  both  a  legacy  presently  pay- 
able and  an  interest  in  remainder  the  exemption  is  pro 
rata. 

Matter  of  Title  Guarantee  &  Trust  Co.,  81  Misc.  106 ;  142  Supp.  1070 ; 
mod.  on  another  point,  159  App.  Div.  803. 

4.  Exemptions  to  Charities. 

These  must  be  specified  in  the  inheritance  tax  statute, 
they  are  never  implied. 

Leavell  v.  Arnold,  131  Ky.  426;  115  S.  W.  232. 

Miller  v.  Commonwealth,  27  Gratt.  (Va.)  110. 

They  depend  upon  the  language  of  the  particular  statute 
and  the  statutes  in  this  respect  are  so  frequently  amended 


PART  III  — THE  PARTIES  167 

that  a  citation  of  authorities  is  more  apt  to  confuse  than 
instruct.  A  few  general  principles  seem  fairly  well 
established. 

a.     CHARTER  POWERS  THE  TEST. 

In  order  to  determine  the  status  of  a  corporation  and  to 
ascertain  the  purposes  for  which  it  was  incorporated, 
recourse  must  be  had  to  the  act  by  which  it  was  incorpo- 
rated or  to  its  charter  and  the  statute  under  the  authority 
of  which  it  was  framed. 

Matter  of  Watson,  171  N.  Y.  256;  63  N.  E.  1109. 
Matter  of  White,  118  App.  Div.  869,  870 ;  103  Supp.  688. 
Matter  of  Moses,  138  App.  Div.  525 ;  123  Supp.  443. 
Matter  of  DePeyster,  210  N.  Y.  216. 

The  application  of  this  principle  was  strikingly  illus- 
trated in  the  recent  decision  of  the  New  York  Appellate 
Division  in  Matter  of  Rockefeller,  —  App.  Div.  — ;  165 
Supp.  154.  Laura  S.  Rockefeller,  the  deceased  wife  of 
John  D.  Rockefeller,  devised,  through  trustees,  $438,000 
to  the  Rockefeller  Foundation,  and  it  was  claimed  by  the 
Comptroller  that  moneys  of  that  Foundation  are  not  in 
fact  applied  to  purposes  exempt  from  taxation  within  the 
intent  of  the  statute,  but  are  used  to  influence  legislation 
and  in  other  ways  of  doubtful  public  policy.  In  sustaining 
the  exemption  of  this  bequest  from  taxation,  the  court 
said,  through  Mr.  Justice  Page : 

"  The  Rockfeller  Foundation  was  incorporated  by  a 
special  act  of  the  Legislature  (Laws  1913,  Chapter  488) 
'  for  the  purpose  of  receiving  and  maintaining  a  fund  or 
funds  and  applying  the  income  and  principal  thereof  to 
promote  the  well-being  of  mankind  throughout  the  world. 
It  shall  be  within  the  purposes  of  said  corporation  to  use 
as  means  to  that  end  research,  publication,  the  establish- 
ment of  charitable,  benevolent,  religious,  missionary  and 
public  educational  activities,  agencies  and  institutions,  and 


168  INHERITANCE    TAXATION 

the  aid  of  any  such  activities,  agencies  and  institutions 
already  established,  and  any  other  means  and  agencies 
which  from  time  to  time  shall  seem  expedient  to  its  members 
and  trustees.'  Section  3  of  said  Act  provides  *  No  officer, 
member  or  employee  of  this  corporation  shall  receive  or 
be  lawfully  entitled  to  receive  any  pecuniary  profit  from 
the  operations  thereof,  except  reasonable  compensation  for 
services  in  effecting  one  or  more  of  its  purposes,  or  as  a 
proper  beneficiary  of  its  strictly  charitable  purposes.' 
Upon  the  hearing  before  the  appraiser  the  Rockefeller 
Foundation  claimed  that  the  legacy  to  it  was  exempt  from 
taxation,  and  put  in  evidence  its  charter  and  an  affidavit 
of  its  secretary,  '  That  ever  since  the  corporation  was 
organized  and  up  to  the  present  time,  said  corporation  has 
been  engaged  exclusively  in  carrying  out  its  strictly 
charitable  and  benevolent  purposes.  That  no 

officer,  member  or  manager  of  said  corporation  receives 
or  has  received  any  pecuniary  profit  from  the  operation 
thereof.  That  the  only  persons  who  now  receive  or  who 
have  received  any  compensation  or  pecuniary  profit  what- 
soever from  the  operations  thereof  are  hired  assistants 
and  clerks,  who  receive  reasonable  compensation  for  the 
services  performed  by  them  for  said  corporation.' 

"  It  is  well  settled  that  the  character  of  a  corporation 
may  be  determined  by  its  charter.  (Matter  of  White,  118 
App.  Div.  869,  103  Supp.  688:  Matter  of  Mergentime,  129 
id.  367,  374,  113  Supp.  948,  affd.  195  N.  Y.  572:  Matter  of 
Loeb,  167  App.  Div.  588,  589,  152  Supp.  879:  Matter  of 
DePeyster,  210  N.  Y.  216,  219.) 

"  The  character  of  this  corporation  is  shown  from  its 
purposes  as  stated  in  its  charter:  '  For  the  purpose  of 
receiving  and  maintaining  a  fund  or  funds,  and  applying 
the  income  and  principal  thereof  to  promote  the  well-being 
of  mankind  throughout  the  world.'  What  follows  relates 
to  the  means  of  accomplishing  that  purpose.  The  test  of 


PART  III  — THE  PARTIES  169 

a  charitable  gift  or  nse  and  a  charitable  corporation  are 
the  same.  (Matter  of  Altman,  87  Misc.  256,  260 ;  149  Supp. 
601.)  The  former  has  been  thus  defined  *  a  charitable  use, 
where  neither  law  or  public  policy  forbids,  may  be  applied 
to  almost  anything  that  tends  to  promote  the  well  doing 
and  well  being  of  mortal  man.'  (Quid  v.  Washington 
Hospital,  95  U.  S.  303,  311;  Tilden  v.  Green,  130  N.  Y.  29, 
46 ;  28  N.  E.  880. )  Our  Court  of  Appeals  has  recently  said : 
'  Many  definitions  of  a  charitable  trust  have  been  formu- 
lated, but  all  definitions  that  have  been  attempted  carry 
the  implication  of  public  utility  in  its  purpose.  * 
If  the  purpose  to  be  attained  is  personal,  private  or  selfish, 
it  is  not  a  charitable  trust.  Where  the  purpose  accom- 
plished is  that  of  public  usefulness,  unstained  by  personal 
or  selfish  considerations,  its  charitable  character  insures 
its  validity.'  (Matter  of  McDowell,  217  N".  Y.  454,  460.) 
In  its  popular  acceptation  a  charitable  corporation  is  one 
that  freely  and  voluntarily  ministers  to  the  physical  needs 
of  those  pecuniarily  unable  to  secure  for  themselves,  while 
a  benevolent  corporation  is  one  that  ministers  to  all,  and 
the  purpose  may  be  anything  that  promotes  the  mental, 
physical  or  spiritual  welfare  of  man.  Considered  in  the 
light  of  the  legal  definitions  above  set  forth,  the  Rocke- 
feller Foundation  is  a  charitable  corporation,  while  con- 
sidered in  the  popular  meaning  of  the  words  it  is  both 
charitable  and  benevolent  in  its  purposes. 

"  If,  as  claimed  by  the  Comptroller,  some  of  the  funds 
of  the  corporation  have  been  used  by  it  for  uses  foreign 
to  its  corporate  powers,  or  if  it  has  exceeded  its  corporate 
powers  in  assuming  to  act  as  trustee  for  other  charities, 
this  Avould  not  affect  its  status  as  a  charitable  and  benevo- 
lent corporation  unless  these  uses  were  for  the  purpose 
of  the  personal  enrichment  of  its  officers  or  members.  If 
these  acts  were  ultra  vires,  on  a  proper  application  by  the 
Attorney-General,  the  power  of  the  Supreme  Court  over 


170  INHERITANCE  TAXATION 

such  corporation  could  be  invoked,  and  the  trustees  called 
upon  to  account.  But  such  matters  are  not  within  the 
jurisdiction  of  the  Surrogate's  Court,  nor  do  they  properly 
arise  in  a  transfer  tax  proceeding." 

The  court  concludes :  "It  has  been  the  settled 
policy  of  the  State  of  New  York  to  encourage  the  benevo- 
lently inclined  to  dedicate  a  portion  of  their  property  to 
charitable  and  benevolent  purposes  for  the  relief  of  the 
sick  or  distressed,  the  amelioration  of  the  condition  of  the 
unfortunate  or  the  advancement  of  the  physical,  mental 
or  spiritual  well  being  of  its  inhabitants,  and  to  that  end 
to  free  the  property  thus  dedicated,  so  long  as  it  shall  be 
used  for  those  purposes  from  taxation.  The  Transfer  Tax 
Law,  in  harmony  with  this  general  purpose  has  provided 
that  bequests,  devises  and  gifts  to  take  effect  after  the 
death  of  the  testator  or  donor  shall  not  be  diminished  by 
a  tax  upon  the  transfer  to  the  charitable  or  benevolent 
corporation.  The  decision  of  the  learned  surrogate  was 
right  and  the  order  should  be  affirmed  with  costs." 

b.    PURPOSES  MUST  BE  BROUGHT  WITHIN  THE  LANGUAGE  OF 

THE  STATUTE. 
Matter  of  Daly,  79  Misc.  586;  141  Supp.  199;  aff.  215  N.  Y.  mem. 

And  burden  of  proof  is  on  the  corporation  claiming 
exemption. 

Matter  of  Townsend,  215  N.  Y.  442. 

Where  the  court  said:  "  The  respondent,  having  been 
duly  served  with  the  notice  of  the  hearing  before  the 
appraiser  and  having  failed  to  appear  in  response  thereto, 
the  appraiser  had  jurisdiction  of  the  proceeding,  and  upon 
the  record  then  before  him  could  not  do  other  than  deter- 
mine the  tax  payable  upon  the  legacy  to  respondent.  The 
title  of  respondent,  '  The  New  York  Exchange  for 
Woman's  Work,'  was  not  notice  to  him  that  the  corpo- 


PAST  III  — THE  PARTIES  171 

ration  was  one  entitled  to  exemption,  and  even  did  the  name 
indicate  that  the  corporation  might  be  charitable  in  its 
purpose,  he  would  not  be  justified  therefrom  in  assuming 
the  other  facts  required  by  statute  to  secure  the  benefits 
of  exemption  from  taxation.  Neither  is  it  incumbent  upon 
an  appraiser  to  devote  the  time  necessary  to  investigation 
of  corporate  legatees  under  wills  in  order  to  ascertain  the 
status  of  the  same.  It  was  the  duty  of  the  respondent  to 
appear  before  the  appraiser  and  the  burden  was  upon  it  to 
produce  evidence  to  show  that  it  was  entitled  to  exemp- 
tion." 

But  when  the  purpose  is  clearly  benevolent  and  the 
charter  brings  the  case  within  the  statutory  provision  the 
corporation  is  exempt  from  the  tax. 

Matter  of  Loeb,  167  App.  Div.  588;  152  Supp.  879. 

Exemption  from  general  taxation  does  not  exempt  from 
transfer  tax. 

Matter  of  McCormick,  206  N.  P.  100;  99  N.  E.  177. 

Matter  of  Sounders,  77  Misc.  54;  137  Supp.  438;  aff.  211  N.  Y.  541. 

But  until  such  corporation  is  formed  gthe  title  to  the 
bequest  is  in  the  trustees  and  the  tax  must  be  assessed 
against  them,  subject  to  a  motion  to  modify  the  order  or 
refund  the  tax,  if  paid,  when  the  corporation  if  formed 
and  the  funds  turned  over  to  it  for  the  charitable  purposes 
of  the  testator. 

Matter  of  Robinson,  80  Misc.  458;  142  Supp.  456;  aff.  212  N.  Y.  548. 
Matter  of  Gary,  N.  Y.  L.  J.,  Jan.  20,  1914. 
Matter  of  Neustadter,  N.  Y.  L.  J.,  Aug.  16,  1913. 

This  was  the  practice  recently  adopted  in  New  York 
on  motion  to  modify  the  order  taxing  the  transfer  to 
trustees  who  subsequently  turned  over  the  bequest  to  the 
exempt  corporation. 

Matter  of  Telefeyan,  N.  Y.  L.  J.,  Jan.  31,  1917. 


172  INHERITANCE  TAXATION 

Such  a  corporation,  so  formed,  is  not  bound  by  the 
original  appraisal  because  no  notice  thereof  was  or  could 
be  served  on  it. 

People  v.  Kellogg,  268  111.  489;  109  N.  E.  304. 

On  the  other  hand  the  accumulations  of  the  fund  in  the 
interim  between  the  death  of  the  testator  and  the  formation 
of  the  corporation  cannot  be  held  for  its  benefit.  That  is 
the  general  rule  and  is  forbidden  by  statute  in  New  York. 
Such  accumulations  pass  under  the  will  to  the  residuaries 
or,  if  the  will  is  silent,  under  the  intestate  laws.  Whether 
or  not  they  are  taxable  as  a  transfer  from  the  decedent 
to  such  beneficiaries  remains  a  nice  question.  Although 
such  accumulations  accrue  after  death  they  relate  back  to 
the  will  or  pass  by  intestacy  and  do  not  go  to  the  alter- 
native legatee. 

St.  John  v.  Andrews'  Institute,  191  N.  Y.  254;  83  N.  E.  981. 

Under  the  New  York  Constitution  the  Legislature  may 
exempt  a  charitablelbequest  retroactively. 

Church  of  Transfiguration  v.  Niles,  86  Hun,  221;  33  Supp.  944. 

Under  a  similar  provision  of  the  California  Constitu- 
tion forbidding  the  giving  away  of  money  of  the  state  it 
is  held  that  such  legislation  is  void. 

Matter  of  Stanford's  Estate,  126  Cal.  112;  54  Pac.  259;  58  Pac.  462. 

Prior  to  N.  Y.  Statute  732,  L.  1911,  bequests  to  foreign 
charitable  corporations  were  taxable. 

Matter  of  Julia  A.  Smith,  77  Hun,  134. 
Matter  of  Prime,  136  N.  Y.  347;  32  N.  E.  1091. 
Matter  of  Wolfe,  52  Supp.  415;  23  Misc.  439. 
Matter  of  McCartin,  N.  Y.  L.  J.,  Dec.  5,  1913. 
Matter  of  Crittenton,  N.  Y.  L.  J.,  April  5,  1911. 

Since  that  enactment  such  bequests  have  been  exempted. 

Matter  of  Lyon,  144  App.  Div.  104;  128  Supp.  1004. 


PAET  III  — THE  PASTIES  173 

c.     BEQUESTS  HELD  EXEMPT. 

Generally  the  courts  have  favored  exemptions  to  chari- 
table institutions,  though  theoretically  construing  the 
statutes  strictly  against  them.  Under  the  language  of  the 
specific  statute  in  question  and  the  particular  articles  of 
incorporation  of  the  beneficiary  the  following  bequests 
have  been  held  exempt : 

To  American  Baptist  Foreign  Missionary  Society 
(subsequent  to  1911) : 

Matter  of  Lyon,  144  App.  Div.  104;  128  Supp.  1004. 

To  an  art  gallery: 
Matter  of  Arnot,  203  N.  Y.  627. 

To  a  bishop : 

Matter  of  Higgins,  N.  Y.  L.  J.,  Dec.  16,  1914. 
Matter  of  Kelly,  29  Misc.  169 ;  60  Supp.  1005. 

Matter  of  Palmer,  33  App.  Div.  307;  53  Supp.  847;  aff.  158  N.  Y. 
669;  52  N.  E.  1125. 

To  Congregational  and  Baptist  churches: 
Carter  v.  Eaton,  75  K  H.  560;  78  A.  643. 

To  First  Universalist  Society : 

First  Universalist  Society  v.  Bradford,  185  Mass.  310 ;  70  N.  E.  204. 

For  Masses : 
Matter  of  McAvoy,*112  App.  Div.  377  j  98  Supp.  437. 

To  Methodist«church : 
Carter  v.  Whitcomb,  74  K  H.  482;  69  A.  779. 

To  New  York  Metropolitan  Museum: 

Matter  of  Mergantime,  129  App.  Div.  367;  113  Supp.  948;  aff.  195 
N.  Y.  572;  88  N.  E.  1125. 

To  public  officers  as  trustees  for  charitable  purposes: 
In  re  Spangler,  148  la.  333;  127  N.  W.  625. 

To  a  village  in  trust  for  indigent  women : 
Matter  of  Albright,  93  Misc.  388 ;  156  Supp.  821. 


174  INHEKITANCE  TAXATION 

To  found  a  home  for  the  aged: 
Matter  of  Graves,  171  N.  Y.  40;  63  N.  E.  787. 

For  a  drinking  fountain  for  horses: 
Matter  of  Graves,  242  111.  212;  89  N.  E.  978. 

To  a  library : 
Essex  v.  Brooks,  164  Mass.  79;  41  N.  E.  119. 

To  a  university : 
Alfred  University  v.  Hancock,  69  N.  J.  Eq.  470 ;  46  A.  178. 

To  hospitals : 

Matter  of  Higgins,  55  Misc.  175;  106  Supp.  465. 
Matter  of  Howell,  34  Misc.  40 ;  69  Supp.  505. 

To  a  Masonic  lodge : 

Matter  of  Woolsey,  N.  Y.  L.  J.,  June  5,  1915. 
Matter  of  Allen,  76  Misc.  88;  136  Supp.  327. 
Morrow  v.  Smith,  145  la.  514;  124  N.  W.  316. 

To  W.  C.  T.  U. : 

Matter  of  Field,  71  Misc.  396;  130  Supp.  195. 

To  Y.  M.  C.  A. : 

Matter  of  Moses,  138  App.  Div.  525 ;  123  Supp.  443. 
Little  v.  Newburyport,  210  Mass.  414;  96  N.  E.  1032. 

d.     BEQUESTS  HELD  TAXABLE. 

On  the  other  hand,  under  the  particular  statute  in  force 
at  the  date  of  the  death  of  the  testator  and  the  articles 
of  incorporation  in  question  these  bequests  for  charitable 
or  allied  purposes  have  been  held  taxable : 

To  foreign  religious  corporations,  in  New  York  (prior 
to  1911) : 

Matter  of  Bailies,  144  N.  Y.  132,  38  N.  E.  1007. 

To  New  York  Cooper  Union  (1901) : 
Matter  of  Kucielski,  144  App.  Div.  100;  128  Supp.  768. 


PART  III  — THE  PARTIES  175 

To  United  States  government: 

Matter  of  Merriam,  141  N.  Y.  479;  36  N.  E.  505;  aff.  163  U.  S.  625; 
16  S.  Ct.  Rep.  1073. 

To  Society  for  Prevention  of  Cruelty  to  Animals  (prior 
to  1912) : 

Matter  of  Daly,  79  Misc.  586;  141  Supp.  199;  aff.  215  N.  Y.  mem. 

To  New  York  Historical  Society : 
Matter  of  DePeyster,  210  N.  Y.  216. 

To  a  library  (under  N.  Y.  Statute  of  1905) : 

Matter  of  Francis,  121  App.  Div.  129;  105  Supp.  643;  aff.  189  N.  Y. 
554;  82  N.  E.  1126. 

To  McAuley  Water  Street  Mission: 
Matter  of  White,  118  App.  Div.  869 ;  103  Supp.  688. 

To  Home  Missionary  Society  (N.  H.  Statute  1905') : 
Carter  v.  Whitcomb,  74  N.  H.  482;  69  A.  779. 

To  Trinity  College  (N.  Y.  Statute  of  1887) : 
Catlin  v.  Trustees,  113  N.  Y.  133;  20  N.  E.  864. 

To  Bowdoin  College: 

Batt  v.  Treasurer,  209  Mass.  459 ;  95  N.  E.  854. 
Bice  v.  Bradford,  180  Mass.  545;  63  N.  E.  7. 

Bequest  to  trustees  for  education  of  children  in  Turkey : 
Pierce  v.  Stevens,  205  Mass.  219 ;  91  N.  E.  319. 

To  city  for  ornamental  fountain : 
Matter  of  Hamilton,  148  N.  Y.  310;  42  N.  E.  717. 

To  Vivisection  Investigation  League  (1916) : 
Matter  of  Howard,  94  Misc.  560;  157  Supp.  1114. 

These  citations,  while  not  particularly  instructive,  are 
given  for  what  they  are  worth.  Each  case  must  turn  on 
the  language  of  the  statute  and  the  provisions  of  the  cor- 
porate charter  or  the  purpose  of  the  corporation  proposed 
to  be  formed.  As  usual  the  principle  is  simple  enough 
and  the  application  to  concrete  facts  alone  is  difficult. 


176  INHERITANCE  TAXATION 

C.— HEIRS  AND  LEGATEES. 
1.  Heirs  of  Real  Estate, 
a.     LIEN  OF  THE  TAX. 

Most  of  the  statutes  make  the  tax  a  lien  on  the  land  even 
as  against  purchasers  in  good  faith.  They  also  provide 
that  the  tax  shall  be  presumed  to  be  paid  after  six  years, 
but  this  is  only  as  to  a  purchaser  for  value.  As  to  the 
beneficiary  the  lien  remains. 

Matter  of  Strong,  117  App.  Div.  796 ;  102  Supp.  1062. 

Even  where  the  tax  remains  a  lien  as  against  a  bona  fide 
purchaser  there  is  no  personal  liability  upon  him. 

Wilhelmi  v.  Wader  65  Mo.  39. 

The  lien  is  no  bar  to  an  action  to  recover  the  land  from 
a  third  person  even  though  it  is  subject  to  sale  in  default 
of  the  payment  of  the  tax. 

Weller  v.  Wheelock,  155  Mick  698;  118  K  W.  609. 

Nor  does  it  render  the  title  defective  so  as  to  avoid  the 
sale  when  the  proceeds  of  the  sale  are  in  the  hands  of  the 
executor;  in  that  case  the  lien  applies  to  the  proceeds  and 
not  to  the  land. 

Mandel  v.  Fidelity  Trust  Co.,  128  Ky.  239 ;  107  S.  W.  775. 

So,  where  a  will  directs  the  sale  of  property  within  five 
years  to  pay  certain  legacies  in  cash,  the  lands  themselves 
are  not  subject  to  a  lien  for  payment  of  transfer  taxes, 
but  it  attaches  to  the  funds  so  realized. 

Brown  v.  Laurence  Park  Eecdty  Co.,  135  App.  Div.  753;  118  Supp. 
132. 

When  the  representatives  of  the  estate  have  paid  the 
transfer  tax  on  real  property  to  which  the  heirs  succeed 
out  of  personalty,  they  are  subrogated  for  the  benefit  of 


PART  III  —  THE  PARTIES  177 

creditors  to  the  claim  of  the  state  to  the  amount  of  the  tax 
so  paid  against  those  to  whom  the  property  descends. 

Hughes  v.  Golden,  44  Misc.  128;  89  Supp.  769. 

Where  the  decedent  was  a  co-tenant  of  land  on  which 
other  co-tenants  had  made  improvements,  and  where  each 
co-tenant  presumed  and  knew  what  the  others  were  doing, 
and  the  improvements  were  made  under  such  conditions 
that  on  partition  the  co-tenants  would  be  entitled  to  allow- 
ance for  the  improvements,  only  the  balance  of  the  interest 
of  the  decedent  should  be  taxed,  notwithstanding  the  fact 
that  no  proceeding  for  contribution  had  been  commenced, 
and  notwithstanding  the  fact  that  it  might  be  claimed  that 
no  contribution  would  ever  be  asked.  Still  this  does  not 
justify  the  taxation  of  property  that  the  decedent  did  not 
own,  which  does  not  pass  to  the  heirs  at  law  as  her  prop- 
erty. 

Matter  of  Wood,  68  Misc.  267;  123  Snpp.  574. 

The  lien  of  the  tax  is  on  all  the  property  transferred  and 
not  on  that  transferred  to  any  particular  individual.  It  is 
therefore  not  severable  and  cannot  be  discharged  from 
part  of  the  land  by  paying  part  of  the  tax. 

Smith  v.  Browning,  171  App.  Div.  279;  157  Supp.  71. 

b.     PARTITION. 

The  fact  that  under  partition  proceedings  the  plaintiff's 
equitable  interest  in  certain  real  estate  was  satisfied  by 
an  assignment  to  him  of  personal  property,  does  not  relieve 
him  from  the  payment  of  a  succession  tax  on  his  share  of 
the  estate,  for  the  reason  that  he  received  the  full  value 
of  the  real  estate  in  other  property  assigned  to  him  belong- 
ing to  the  same  estate. 

Scholey  v.  Hew,  90  U.  S.  (23  Wall.)  331,  349. 

Where  a  decedent  owned  an  undivided  third  of  an  entire 
tract  of  land,  partition  of  his  interest  could  not  have  the 


178  INHERITANCE  TAXATION 

effect  of  apportioning  the  lien  and  fixing  a  part  thereof 
exclusively  on  any  one  lot. 

Appeal  of  Mellon,  114  Pa.  St.  564,  574;  8  A.  183. 

c.  EQUITABLE  CONVERSION. 

Except  in  Pennsylvania  the  doctrine  of  equitable  con- 
version is  not  applied  in  transfer  tax  law. 

Connell  v.  Crosby,  210  111.  380;  71  N.  E.  350. 
McCurdy  v.  McCurdy,  197  Mass.  248;  83  N.  E.  881. 
Matter  of  Bartow,  30  Misc.  27;  62  Supp.  1000. 

But  where  decedent's  will  directed  that  his  real  estate 
be  converted  into  cash  and  so  distributed,  one  of  the  bene- 
ficiaries died  before  the  sale  of  the  real  estate,  leaving  a 
will  disposing  of  her  interest  in  her  father's  estate  to  her 
husband,  held,  that  for  purposes  of  the  Transfer  Tax  Law 
it  should  be  treated  as  personalty. 

Matter  of  Mills,  86  App.  Div.  555 ;  67  Supp.  956 ;  84  Supp.  1135 ;  aff. 
177  N.  Y.  562;  69  N.  E.  1127. 

The  proceeds  of  a  partition  sale  held  by  an  infant  at 
the  time  of  her  death  are  personal  property. 
Matter  of  Stiger,  7  Misc.  268;  28  Supp.  163. 

Where  a  testatrix  devised  one  house  of  three  to  each  of 
three  nieces,  and  afterwards  sold  one  and  retained  the 
money,  the  proceeds  of  such  house  does  not  go  to  said  niece 
but  becomes  part  of  the  residuary  estate. 

Matter  of  Delaney,  133  App.  Div.  409;  117  Supp.  838. 

d.  SALE  TO  PAY  THE  TAX. 

If  the  personal  property  is  not  sufficient  then  the  real 
estate  may  be  subjected  to  the  payment  of  the  claim  of 
the  state,  and  the  trial  court  can  make  such  order  with 
the  entire  estate  under  its  control  as  is  necessary  to  satisfy 
any  claim  of  the  state  against  the  estate  for  taxes,  inheri- 
tance or  otherwise. 

Mandel  v.  Fidelity  Trust  Co.,  128  Ky.  239 ;  107  S.  W.  775. 


PART  III  — THE  PARTIES  179 

Where  real  estate  was  left  to  a  life  tenant  with 
remainder  to  the  brothers  and  sisters  who  survived,  with 
a  contingent  remainder  over,  the  court  held  that  the  prop- 
erty was  subject  to  a  lien  for  the  payment  of  the  whole  tax, 
and  that  if  there  was  no  money  forthcoming  to  pay  the 
whole  tax,  it  was  the  duty  of  the  executor  to  pay  it.  And 
the  court  directed  the  sale  of  so  much  of  the  property  as 
might  be  necessary  to  raise  the  fund  to  pay  the  tax. 

Matter  of  Wilcox,  118  Supp.  254. 

e.  WHERE  CHARGED  WITH  A  LEGACY. 

The  -  statutes  usually  provide  that  where  a  legacy  is 
charged  upon  real  estate  the  heir  must  deduct  the  tax 
before  paying  the  legacy  and  makes  him  liable  personally 
if  he  fails  to  do  so. 

So  where  a  devise  of  real  estate  required  the  beneficiary 
to  pay  $2,000  a  year  out  of  the  future  rents  and  profits  to 
an  annuitant  the  devisee  of  the  real  estate  was  required  to 
pay  the  tax  out  of  the  rents  and  profits. 

Re  Lea,  194  Pa.  St.  524;  45  A.  337. 

f.  As  TO  ALIENS. 

"  Every  alien  holding  real  property  in  this  State  is 
subject  to  duties,  assessments,  taxes  and  burdens  as  if  he 
were  a  citizen  of  the  State." 

Section  16  (formerly  Section  8)  of  the  New  York  Real 
Property  Law,  being  Chapter  52,  Laws  of  1909. 

2.  Legatees  of  Personal  Property, 
a.    RENUNCIATION  AND  ASSIGNMENT. 

As  we  have  seen,  a  legatee  may  renounce  and  thus  avoid 
the  tax. 

Matter  of  Wolfe,  89  App.  Div.  349 ;  85  Supp.  949 ;  aff.  179  N.  Y.  599 ; 
72  N.  E.  1152. 


180  INHERITANCE  TAXATION 

While  if  he  assigns  the  legacy  the  tax  must  be  paid 
at  the  same  rate  as  though  it  passed  to  the  legatee. 
Matter  of  Cook,  187  N.  Y.  253;  79  N.  E.  99L 

And  it  is  taxable  though  the  legatee  dies  before  receiv- 
ing it. 

Matter  of  Clinch,  180  N.  Y.  300;  73  N.  E.  35. 

b.     LEGACY  IMPRESSED  WITH  A  TRUST. 

A  legacy  impressed  with  a  trust  is  held  taxable  against 
the  legatee  for  its  full  value  in  New  York.  The  will  gave 
an  absolute  bequest  of  one-third  of  the  property  to  Mr. 
Parsons  the  executor.  Though  extrinsic  evidence  showed 
he  took  it  in  trust  for  the  next  of  kin  the  bequest  to  him 
was  held  liable  to  the  tax.  The  court  said: 

' '  The  question  is,  therefore,  whether  Mr.  Parsons  or  the 
brother  of  the  testatrix  took  the  one-third  interest  which  it 
is  here  sought  to  tax  under  the  wilL  If  Mr.  Parsons,  then, 
under  the  Collateral  Inheritance  Tax  Law  (chap.  713, 
Laws  of  1887),  such  interest  is  subject  to  the  tax.  Disre- 
garding the  form  of  the  final  judgment  in  the  Supreme 
Court  as  not  binding  upon  the  State,  we  find  that,  under 
the  decision  of  the  Court  of  Appeals,  the  one-third  of  the 
residuary  estate  passed  under  the  will  and  vested  in  Mr. 
Parsons  absolutely,  and  that  no  trust  was  imposed  thereon 
by  the  will,  and  although  it  was  held  that,  as  the  result 
of  the  extrinsic  evidence  introduced,  he  took  it  impressed 
with  a  trust  in  favor  of  the  brother,  this  would  not  relieve 
him  from  the  payment  of  the  tax. ' ' 

Matter  of  Edson,  38  App.  Div.  19;  56  Supp.  409;  aff.  159  N.  Y.  568; 
54  N.  E.  1092. 

The  contrary  is  held  in  Illinois. 
People  v.  Schaefer,  266  111.  334;  107  N.  E.  617. 

And  the  rule  has  not  always  been  strictly  applied  in 
New  York.  Where  there  was  a  bequest  with  precatory 


PART  III  — THE  PARTIES  181 

words  to  use  the  legacy  for  charitable  purposes  with  an 
agreement  by  the  legatee  with  the  testator  so  to  use  it 
and  the  agreement  was  fulfilled,  held  exempt. 
Matter  of  Murphy,  4  Misc.  230 ;  25  Supp.  107. 

c.     LAPSED  LEGACIES. 

The  rule  is  well  established  that  a  legacy  or  devise,  even 
with  or  without  words  of  limitation,  lapses  in  case  of  the 
death  of  the  legatee  or  devisee  before  the  testator,  in  the 
absence  of  express  words  to  prevent  a  lapse,  or  of  some- 
thing in  the  context  of  the  will  indicating  a  contrary  intent, 
with  the  single  statutory  exception,  in  certain  cases,  of  a 
legacy  to  a  child  or  other  descendant  of  the  testator. 
This  is,  also,  true  where  the  gift  is  to  several  as  tenants  in 
common  and  not  as  a  class. 

Matter  of  Kimberly,  150  N.  Y.  90;  44  N.  E.  945. 

Where  a  will  created  a  contingent  remainder,  after  a 
life  estate,  and  the  contingent  remaindermen  die  during 
the  continuance  of  the  life  estate,  the  gift  to  them  lapses 
and  their  interest  goes  to  the  residuary  estate. 

Brooklyn  Trust  Co.  v.  Phillips,  134  App.  Div.  697;  119  Supp.  401. 

An  interesting  question  as  to  the  taxation  of  a  specific 
bequest  of  Standard  oil  stock  where  the  stock  became 
entitled  to  stock  in  the  subsidiary  companies  after  the  will 
was  made,  but  before  death,  arose  in 

Matter  of  Leamit,  86  Misc.  609;  148  Supp.  758;  aff.  sub.  nom.  Brann, 
171  App.  Div.  800;  157  Supp.  756. 

Where  there  is  a  general  residuary  bequest,  the  legatee 
takes  not  only  the  property  which  the  testator  has  not 
otherwise  disposed  of,  but  also  every  part  of  the  estate 
which  by  lapse  or  otherwise  is  not  effectually  bequeathed 
to  others.  Where  testator  gives  residuary  estate  to  cer- 
tain persons  named  they  take,  not  as  joint  tenants,  but  as 
tenants  in  common,  and  where  the  testator  made  no  change 
in  his  will  after  the  death  of  a  residuary,  the  residuary 


182  INHERITANCE  TAXATION 

share  passes  to  his  next  of  kin  and  not  to  the  remaining 
residuaries. 

Matter  of  Barrett,  132  App.  Div.  134;  116  Supp.  756. 

3.  While  Legacy  is  in  Custodia  Legis. 

As  we  have  seen,  there  are  conflicting  theories  as  to 
the  estate  of  a  legatee  during  the  distribution  and  while 
the  property  of  the  decedent  is  "  in  custodia  legis." 

In  New  York  a  distinction  has  been  made  between  the 
unascertained  right  of  a  legatee  before  the  settlement  of 
an  executor's  accounts. 

Matter  of  Zefita,  167  N.  Y.  280;  60  N.  E.  598. 

Matter  of  Phipps,  77  Hun,  325;  28  Supp.  330;  aff.  143  N.  Y.  641;  37 
N.  E.  823. 

And  the  situation  after  inventory  and  accounting. 

Matter  of  Clinch,  180  N.  Y.  300;  73  N.  E.  35. 

The  theory  being  that  the  legatee  has  but  a  "  naked 
right." 

Its  logic  was  rather  exploded  by  the  Pennsylvania  court 
in  Mil-liken' s  Estate,  206  Pa.  St.  149;  55  A.  853.  In  this 
case  a  brother  died  in  New  York  and  his  sister  died  a 
resident  of  Pennsylvania  ten  days  later.  The  court  said: 

11  His  securities  were  there  (in  New  York)  deposited 
in  a  trust  company;  they  were  not  in  his  physical  pos- 
session; could  not  well  have  been;  his  right  to  custody 
over  them,  to  the  extent  of  her  share,  nominally  passed 
at  once  to  her  on  his  death,  subject  only  to  the  incident 
of  administration  in  New  York.  Her  share  from  that 
moment  was  subject  of  bargain,  sale  or  transfer  by  her 
in  Pennsylvania,  subject  only  to  her  share  of  the  expenses 
of  administration  in  New  York.  For  two  weeks  then  she 
was  not  only  in  full  constructive  possession,  she  was  to  a 
degree  in  actual  possession;  that  is,  she  could  exercise 
every  right  of  an  owner  in  actual  possession  except  that 


PART  III  — THE  PARTIES  183 

of  determining  the  amount  of  charges  for  administration; 
she  was  the  absolute,  uncontrolled  owner  subject  to  a 
trifling  lien." 

As  the  state 's  right  to  the  tax  vests  at  the  same  moment 
that  the  right  of  the  legatee  vests  in  his  legacy,  some 
authorities  have  been  inclined  to  hold  that  what  the  legatee 
gets  is  what  remains  after  the  tax  has  been  subtracted, 
and  his  legacy  is  therefore,  in  reality,  not  taxed  at  all. 
Finnen's  Estate,  196  Pa.  St.  72;  46  A.  269. 

The  New  York  rule  has  been  somewhat  modified  by  the 
more  recent  decisions  and  it  now  seems  to  be  the  doctrine 
that  the  tax  accrues  after  death  as  soon  as  the  interest 
of  the  legatee  is  ascertained,  and  it  is  then  due  and  pay- 
able and  interest  begins  to  run  from  that  date. 

Matter  of  Armstrong,  N.  Y.  L.  J.,  Feb.  20,  1912. 
Matter  of  Gans,  N.  Y.  L.  J.,  April  13,  1912. 
Matter  of  Sterry,  N.  Y.  L.  J.,  April  30,  1912. 

4.  From  What  Fund  Payable. 

Each  legacy  must  bear  its  own  share  of  the  tax,  unless 
the  will  otherwise   directs;  and  even  where  it  does   so 
provide  each  of  the  distributive  shares  of  the  residuary 
estate  must  bear  its  proportionate  burden. 
Matter  of  Smith,  85  Misc.  636;  149  Supp.  24. 

As  to  directions  in  the  will  providing  for  the  payment 
of  taxes  on  specific  bequests  out  of  the  residuary  estate 
the  Court  of  Appeals  said  in  Matter  of  Gihon,  169  N.  Y. 
443;  62  N.  E.  561: 

"  Therefore,  though  the  administrator  or  executor  is 
required  to  pay  the  tax,  he  pays  it  out  of  the  legacy  for 
the  legatee,  not  on  account  of  the  estate.  *  *  No 

one  questions  that  where  a  legacy  is  given  for  a  specified 
amount  the  tax  must  be  deducted  from  the  amount  of 
the  legacy  and  the  balance  only  given  to  the  legatee.  A 
testator  may  direct  that  the  tax  on  a  particular  legacy 


184  INHERITANCE  TAXATION 

shall  be  paid  out  of  the  estate,  nevertheless,  in  reality  the 
tax  is  still  paid  out  of  the  legacy,  the  effect  of  the  direc- 
tion of  the  testator  being  merely  to  increase  the  legacy 
by  the  amount  of  the  tax.  The  full  amount  of 

the  legacy  is  in  law  paid  to  the  legatee  and  the  deduction 
made  from  it  and  paid  to  the  state  or  Federal  govern- 
ment is  paid  on  account  of  the  legatee  from  the  legacy 
which  he  receives." 

Where  the  will   directed  that  the  tax  on  the  specific 
legacies  be  paid  out  of  the  residuary  and  a  codicil  making 
other  bequests  made  no  such  direction  held  that  the  pro- 
vision in  the  will  did  not  apply  to  the  codicil. 
Matter  of  Myers,  N.  Y.  L.  J.,  Nov.  22,  1913. 

And  where  the  will  directed  tax  on  legacies  to  be  paid 
out  of  the  residuary  held  not  to  include  legacies  given 
under  a  power  of  appointment  vested  in  testator. 
Loring  v.  Gardner,  221  Mass.  571;  109  N.  E.  635. 

The  contrary  was  held  in  New  York  under  a  similar 
win. 

Isham  v.  N.  7.  Assn.  for  the  Poor,  177  N.  Y.  218;  69  N.  E.  367. 

In  the  absence  of  a  provision  in  the  will  to  the  contrary 
the  amount  of  the  tax  must  be  deducted  from  each  legacy 
and  the  balance  paid  to  the  legatee. 
Sherman  v.  Moore,  89  Conn.  190 ;  93  A.  241. 

But  it  has  been  held  that  taxes  imposed  in  a  foreign 
jurisdiction  must  be  charged  against  the  property  in  the 
foreign  state  and  cannot  reduce  the  amount  of  a  legacy 
payable  from  property  within  the  state.  "To  hold  that 
the  effect  of  the  foreign  law  is  to  reduce  the  legacy  given 
by  the  will  construed  in  accordance  with  the  law  of  the 
testator's  domicile  is  to  permit  the  foreign  law  to  regu- 
late the  testamentary  capacity  of  a  resident ;  as  the  foreign 
tax  depends  upon  the  jurisdiction  over  the  property  and 


PART  III— THE  PARTIES  185 

is  not  sustainable  as  a  regulation  of  the  exercise  of  tes- 
tamentary power  by  the  citizen  of  another  state,  it  fol- 
lows that  the  tax  is  merely  a  charge  upon  the  particular 
property  and  not  upon  the  pecuniary  legacies  given  by 
the  will." 

Kingsbury  v.  Bazeley,  75  N.  H.  13;  70  A.  916. 

D.— LIFE  ESTATES  AND  REMAINDERS. 
1.  Examples  and  Illustrations. 

The  law  is  complex  because  human  wishes  are  both  com- 
plex and  vague  and  the  mutations  of  human  events  impos- 
sible to  anticipate.  If  testators  could  so  carve  up  their 
estates  that  they  could  thereby  escape  inheritance  taxes 
there  would  be  still  further  encouragement  to  the  creation 
of  artificial  estates.  The  effort  of  inheritance  tax  legis- 
lation is  to  impose  a  tax  at  each  devolution  of  property, 
but  by  the  creation  of  life  estates  and  remainders  at  least 
one  devolution  is  avoided. 

Courts  and  estate  lawyers  have  endeavored  to  classify 
the  various  life  estates  and  remainders  created  by  testa- 
mentary instruments;  but  the  scientific  phraseology  is 
often  as  confusing  as  are  algebraic  formulas  to  those 
whose  mathematics  are  rusty. 

At  the  risk  of  being  unduly  elementary  the  following 
illustrations  are  given  of  the  various  life  estates  and 
remainders,  the  taxation  of  which  has  given  rise  to  so 
much  legislation  and  litigation: 

Absolute  Life  Estate,  Vested  Remainder. 
"  To  my  wife  for  life  on  her  death  to  my  son  Henry." 

Joint  Life  Estate,  Contingent  Remainder. 

"  In  trust,  income  in  equal  shares  to  my  wife  and  my 
son  Henry  during  their  joint  lives,  remainder  to  the  sur- 
vivor. ' ' 


186  INHERITANCE  TAXATION 

Successive  Life  Estates,  Vested  Remainder. 

I 1  In  trust,  income  to  my  wife,  for  her  life,  on  her  death 
income  to  my  son  Henry  during  his  life,  on  his  death  to 
the  Blank  Library." 

Life  Estate  Charged  with  an  Annuity,  Vested  Remainder. 
"  To  my  wife  for  life,  she  to  pay  $1,000  a  year  toward 
the  support  of  my  sister  Jane,  on  her  death  to  my  said 
sister  Jane." 

Life  Estate  with  no  Remainder. 

II 1  direct  my  executors  to  apply  all  the  residue  to  the 
purchase  of  an  annuity  from  the  blank  insurance  company 
for  the  use  and  benefit  of  my  sister  Jane." 

Limited  Life   Estate,   Remainder   vested   subject   to   be 
divested,  contingent  Remainder. 

11  In  trust  for  my  son  Henry,  income  to  be  paid  to  him 
until  he  arrives  at  the  age  of  30  years  when  the  principal 
fund  is  to  be  paid  to  him ;  or  if  he  shall  die  before  arriving 
at  the  age  of  30  years  then  to  my  nephew  Charles." 

Here  the  son  is  both  life  tenant  and  remainderman, 
but  his  vested  remainder  is  liable  to  be  divested  by  his 
death  before  he  is  30  years,  when  the  nephew's  contin- 
gent remainder  accrues. 

Life  Estate  per  autre  vie,  contingent  remainder  uncertain 

as  to  persons  who  will  take. 

"  In  trust,  income  to  my  son-in-law  James  as  long  as 
his  wife  shall  live;  on  the  death  of  his  wife  the  trustee 
shall  pay  the  principal  sum  to  the  issue  of  my  nephew 
Charles  if  any  there  be.  If  my  nephew  Charles  shall 
have  no  issue  then  living  the  said  principal  sum  shall  be 
distributed  among  my  surviving  nephews  and  nieces  per 
stirpes  and  not  per  capita." 


PART  III  — THE  PARTIES  187 

Life  Estate  with  Power  to  Invade  Principal;  Remainder 

Uncertain  as  to  Amount. 

"  To  my  wife  for  life  with  the  right  to  use  any  portion 
of  the  principal  fund  she  may  deem  necessary  for  the  sup- 
port and  education  of  our  son  Henry,  on  her  death  the 
remainder,  if  any  there  be,  to  my  son  Henry.'* 

Absolute  Bequest  with  Defeasance  and  Remainder  Uncer- 
tain Both  as  to  Persons  and  Amount. 

11  To  the  blank  university  provided  it  shall  within  five 
years  after  my  death  admit  women  students  on  equal 
terms  with  men.  If  it  shall  fail  so  to  do  then  said  sum 
shall  be  distributed  equally  among  such  educational  insti- 
tutions within  this  state  as  shall  admit  women  students 
on  equal  terms  with  men." 

Life  Estate  with  Absolute  Power  of  Appointment. 

"  To  my  wife  for  life  on  her  death  to  such  persons  as 
she  shall  by  will  or  deed  appoint. ' ' 

Life  Estate  with  Contingent  Power  of  Appointment. 

11  To  my  wife  for  life,  remainder  to  my  son  Henry,  but 
if  he  shall  die  before  my  wife,  then  to  such  persons  as 
she  shall  by  will  appoint." 

Life  Estate  with  Defeasible  Power  of  Appointment. 

"  To  my  wife  for  life  or  until  her  remarriage.  In  case 
of  remarriage  to  my  son  Henry ;  if  she  remains  my  widow, 
remainder  to  such  persons  as  she  shall  by  will  appoint. ' ' 

Life  Estate  with  Power  of  Appointment   limited  to   a 

Class. 

11  To  my  wife  for  life  on  her  death  remainder  to  such 
of  our  heirs  or  next  of  kin  as  she  may  by  will  appoint." 

Defeasible  Life  Estate. 

11  Annuity  of  $300  to  John  Jones,  my  butler,  as  long 
as  he  shall  remain  in  the  employ  of  my  daughter." 


188  INHERITANCE  TAXATION 

Defeasible  Remainder. 

11  To  my  wife  for  life,  remainder  to  blank  institute 
so  long  as  it  shall  continue  to  give  free  instruction  to  the 
blind. " 

2.  Life  Estates. 

Whether  the  life  estate  be  absolute  or  defeasible,  as  by 
remarriage,  or  per  autre  vie,  whether  subject  to  the  limita- 
tions of  dower  and  curtesy,  or  whether  it  is  coupled  with 
a  power  to  invade  the  principle  or  power  of  appointment, 
or  limited  by  time,  as  surviving  to  a  certain  age;  it  is, 
in  the  contemplation  of  inheritance  tax  law,  a  present 
right  presently  valuable  and  taxable. 

Where  the  life  tenant  bought  in  the  remainder  she  was 
held  taxable  as  to  that  interest  though  the  life  estate  was 
exempt  under  the  statute. 

Harrison  v.  Johnston,  109  Tenn.  245;  70  S.  W.  414. 

Where  the  life  estate  is  taxable  a  merger  is  held  to  have 
taken  place  and  a  tax  assessed  on  the  fee  against  the  life 
tenant. 

Prune  v.  Smith,  Fed.  Gas.  2053. 

As  to  the  apportionment  of  dividends  between  the  life 
tenant  and  the  remainderman  see: 

Robertson  v.  de  Brulatour,  188  N.  Y.  301 ;  80  N.  E.  938. 
Matter  of  Harteau,  204  N.  Y.  292. 
Thayer  v.  Burr,  201  N.  Y.  155;  94  N.  E.  604. 
Matter  of  Osborne,  153  App.  Div.  312 ;  138  Supp.  18. 
Matter  of  Cooper,  82  Misc.  324;  144  Supp.  189. 

The  accumulated  income  of  a  life  tenant  remains  at 
her  death  taxable  as  part  of  the  estate  of  her  grantor. 
Matter  of  Van  Scoy,  81  App.  Div.  655;  81  Supp.  1146. 


PABT  III  —  THE  PARTIES  189 

a.     FUND  FROM  WHICH  THE  TAX  is  PAYABLE. 

Where  the  succession  tax  against  a  life  tenant  is 
assessed  against  the  property  as  a  whole  it  is  chargeable 
to  principal. 

Matter  of  McMdhon,  28  Misc.  697;  60  Supp.  64. 
Bishop  v.  Bishop,  81  Conn.  509;  71  A.  583. 

As  the  remainder  is  also  presently  valued  and  paid 
out  of  the  principal  fund  the  income  of  the  life  tenant 
must  be  thereby  reduced  and  it  was  claimed  that  he  should 
be  reimbursed.  Under  the  Massachusetts  Statute  then 
in  force  the  life  tenant  was  exempt. 

The  court  said: 

"  The  life  legacy  to  Mr.  Winthrop  is  not  taxable  under 
the  statute,  because  he  is  the  husband  of  the  testatrix. 
The  question  is  whether  his  loss  of  income  is  to  be  made 
up  to  him  out  of  the  principal  of  the  fund,  or  out  of  the 
estate  generally,  or  is  to  be  borne  by  him  as  a  consequence 
of  the  tax  levied  on  the  legatee  of  the  remainder.  There 
is  nothing  in  the  statute  which  authorizes  any  burdens 
to  be  imposed  upon  the  legatee  of  the  remainder  in  addi- 
tion to  the  tax,  and  we  find  no  warrant  in  the  statute 
for  taking  any  part  of  the  principal,  of  the  trust  fund, 
or  of  the  estate  generally,  to  make  up  the  loss  of  the  life 
tenant.  There  is  no  provision  in  the  will  for  making 
good  this  loss  out  of  the  estate.  We  think  that  Mr.  Win- 
throp must  bear  the  loss.  Perhaps  a  simpler  way  than 
that  prescribed  by  the  statute  would  have  been  to  levy 
the  tax  at  the  end  of  the  life  estate  upon  the  whole  of  the 
fund  to  be  paid  to  the  legatee  in  remainder,  but  the  plan 
adopted  is,  we  think,  within  the  power  of  the  Legislature, 
and  Mr.  Winthrop  must  be  held  to  take  his  life  interest 
subject  to  the  law.  While  legacies  to  a  husband  are 
exempt  from  the  tax,  the  consequences  to  a  tenant  for  life 
of  imposing  a  tax  upon  a  legatee  in  remainder  and  deduct- 
ing from  the  legacy  must  be  held  to  have  been  intended, 


190  INHERITANCE  TAXATION 

and  no  way  of  reimbursement  to  the  tenant  for  life  has 
been  provided." 

Minot  v.  Winthrop,  162  Mass.  113;  38  N.  E.  512. 

'Since  this  case  many  statutes  require  the  payment  of  the 
tax  out  of  the  corpus,  both  as  to  the  life  tenant  and  the 
remainderman.  The  life  tenant  loses  the  income  on  the 
amount  of  the  tax  paid  on  the  remainder  interest  and  this 
is  held  to  counterbalance  the  loss  to  the  remainderman  by 
reason  of  paying  the  tax  on  the  life  estate  and  not  out  of 
income.  Under  these  circumstances  the  life  tenant  does 
not  refund  the  tax  but  takes  the  income  on  the  net  estate 
less  the  tax  on  both  remainder  and  life  interest. 

Matter  of  Hoyt,  57  Misc.  531 ;  109  Supp.  1084. 
Matter  of  Bass,  57  Misc.  531;  109  Supp.  1084. 

Though  one  Surrogate  held  the  tax  payable  from  income. 
Matter  of  Day,  86  Misc.  131;  149  Supp.  221. 

Where  the  will  declared  that  the  life  estate  should  be 
"  free  from  inheritance  taxes,"  it  was  held  that  the  testa- 
tor intended  to  preserve  to  the  life  tenant  the  income  on 
the  entire  fund,  and  that  the  tax  must  be  paid  out  of  the 
residuary. 

Matter  of  Bingham,  86  Misc.  566;  148  Supp.  918. 

b.     CHARGED  WITH  AN  ANNUITY. 

In  case  of  an  annuity  the  amount  received  by  the  life 
tenant  is  arbitrarily  fixed  and  does  not  depend  upon  the 
amount  of  the  principal  fund. 

In  such  case  the  payments  must  be  reimbursed  on  the 
rule  in: 

Matter  of  Tracy,  179  N.  Y.  501,  510;  72  N.  E.  519. 

"  The  method  of  restoring  to  the  residuary  estate  the 
tax  so  paid  by  the  trustee  is  as  follows :  Take  for  illustra- 
tion an  annuitant  whose  probable  duration  of  life  is  ten 
years.  The  trustees  would  deduct  from  each  annual  pay- 
ment as  made  one  tenth  of  the  tax  and  restore  it  to  the 
residuary  estate.  In  the  case  at  bar  the  death  of  the 


PABT  III  — THE  PARTIES  191 

annuitant  was  suggested  on  the  argument  as  having  taken 
place  since  that  of  the  testator.  Any  portion  of  the  trans- 
fer tax  not  restored  to  the  estate  by  the  process  indicated 
at  the  time  of  the  annuitant's  death  would  be  a  loss  which 
the  residuary  estate  must  sustain." 

When  a  life  estate  is  charged  with  an  annuity  the  pres- 
ent theoretical  value  of  the  annuity  should  be  computed 
and  deducted  and  not  the  amount  necessary  to  set  aside 
to  produce  the  annuity. 

Matter  of  Maresi,  74  App.  Div.  76;  77  Supp.  76. 

But  when  the  will  directs  an  annuity  to  be  purchased 
from  specified  insurance  companies  there  is  no  remainder 
and  the  value  of  the  annuity  is,  in  that  case,  a  specific 
bequest  to  be  measured  by  its  actual  cost  to  the  estate. 
So  held  when  the  actual  annuity  cost  was  $19,000  more 
than  the  appraised  theoretical  value.  The  cost  was  de- 
ducted from  the  value  of  the  residuary  estate. 
Matter  of  Hutchinson,  105  App.  Div.  487 ;  94  Supp.  354. 

c.     POWER  TO  INVADE  PRINCIPAL. 

When  the  will  gives  the  life  tenant  power  to  invade 
the  principal  or  a  trustee  power  so  to  do  on  behalf  of  the 
life  tenant  the  courts  have  been  somewhat  confused  as  to 
what  method  of  taxation  should  be  adopted, 

(1)  Suspending  taxation  of  Remainder. 

Originally  in  New  York  it  was  the  practice  to  value  the 
life  estate  and  tax  it  and  suspend  taxation  as  to  the 
remainder  because  its  amount  was  uncertain. 

Matter  of  Babcock,  37  Misc.  445;  75  Supp.  926;  aff.  81  App.  Div. 

645;  81  Supp.  1117. 

Matter  of  Gran  field,  79  Misc.  374;  140  Supp.  922. 
Matter  of  Blynn,  N.  Y.  L.  J.,  Jan.  29,  1915;  160  Supp.  730. 
Matter  of  Neher,  95  Misc.  68;  158  Supp.  454. 

In  the  Blynn  case  the  New  York  Surrogate  said: 
"  This  is  an  appeal  by  the  State  Comptroller  from  the 
appraiser's  report  and  the  order  entered  thereon,  upon  the 


192  INHERITANCE  TAXATION 

ground  that  the  taxation  of  certain  remainder  interests 
passing  under  the  will  of  decedent  was  improperly  sus- 
pended. The  executors  contend  that  there  was  not  im- 
proper suspension  of  taxation,  inasmuch  as  the  life  tenant 
is  given  a  power  to  use  the  principal  of  the  fund.  The 
power  is  found  in  the  will  of  decedent.  If  it  should  be 
exercised  by  the  executors  to  its  fullest  extent,  i.  e.,  to 
the  exhaustion  of  the  principal,  there  would  be  nothing 
that  could  be  transferred  to  the  remaindermen  at  the 
death  of  the  life  tenant.  In  the  Matter  of  Gran  field  f  (79 
Misc.  374;  140  Supp.  922),  a  case  very  similar  to  the  one 
under  discussion,  the  court  said,  at  page  381;  '  To  tax 
the  estate  at  the  present  time,  in  the  event  nothing  should 
ultimately  pass  to  the  remaindermen,  would  be  imposing 
a  tax  upon  the  property  and  not  upon  the  transfer,  in 
direct  conflict  with  the  whole  theory  of  the  transfer  tax.' 
Applying  this  rule  to  the  situation  herein,  I  find  that  the 
contention  of  the  executors  should  be  sustained.  The 
appeal  is  therefore  dismissed  and  the  order  fixing  tax 
affirmed. ' ' 

This  is  the  rule  that  has  been  generally  adopted  in 
other  states: 

People  v.  Freese,  267  111.  164;  107  N.  E.  857. 
Nieman's  Appeal,  131  Pa.  St.  346;  18  A.  900. 

(2)  When  the  Discretion  is  in  the  Trustee. 

Under  this  method  it  is  obvious  that  if  the  life  tenant 
uses  part  or  all  of  the  principal  part  of  the  estate  will 
escape  taxation,  but  where  the  discretion  is  vested  in  the 
trustee  to  use  part  or  all  of  the  principal  no  remedy  has 
as  yet  been  discovered.  Since  the  decision  in  Matter  of 
ZborowsTci,  213  N.  Y.  109 ;  all  the  prior  cases  in  New  York 
were  overruled  and  the  remainder  taxed  immediately  at 
the  highest  possible  rate. 

Matter  of  Blun,  176  App.  Div.  189 ;  160  Supp.  731. 


PAST  in  — THE  PAKTIES  193 

(3)   Where  the  Discretion  is  in  the  Life  Tenant. 

When  the  life  tenant  has  power  to  use  the  principal  at 
his  own  discretion  the  New  York  courts  are  coming  to 
the  view  that  a  base  fee  has  been  created  and  that  the 
life  tenant  should  be  taxed  for  the  entire  estate  under 
the  following  provision,  to  be  found  in  most  of  the  statutes : 

"In  estimating  the  value  of  any  estate  or  interest  in 
property,  to  the  beneficial  enjoyment  or  possession  where- 
of there  are  persons  or  corporations  presently  entitled 
thereto,  no  allowance  shall  be  made  in  respect  of  any 
contingent  incumbrance  thereon,  nor  in  respect  of  any  con- 
tingency upon  the  happening  of  which  the  estate  or  prop- 
erty or  some  part  thereof  or  interest  therein  might  be  ab- 
ridged, defeated  or  diminished;  provided,  however,  that  in 
the  event  of  such  incumbrance  taking  effect  as  an  actual 
burden  upon  the  interest  of  the  beneficiary,  or  in  the  event 
of  the  abridgment,  defeat  or  diminution  of  said  estate 
or  property  or  interest  therein  as  aforesaid,  a  return  shall 
be  made  to  the  person  properly  entitled  thereto  of  a  pro- 
portionate amount  of  such  tax  in  respect  of  the  amount  or 
value  of  the  incumbrance  when  taking  effect,  or  so  much 
as  will  reduce  the  same  to  the  amount  which  would  have 
been  assessed  in  respect  of  the  actual  duration  or  extent 
of  the  estate  or  interest  enjoyed.** 
N.  Y.  Statute,  Sec.  230. 

This  was  the  construction  adopted  by  the  New  York 
County  Surrogate  in  the  Matter  of  Post  N.  Y.  Law  Journal, 
Aug.  1,  1916.  In  this  case  Edward  C.  Post  devised  to 
his  wife  Emily  T.  Post,  "  to  have,  hold,  use,  occupy  and 
enjoy  the  same  for  and  during  her  natural  life  with  full 
power  to  invade  the  principal."  The  Surrogate  said, 
citing  Matter  of  Terry,  218  N.  Y.  218,  "This  would  seem 
to  indicate  that  the  entire  estate  should  be  taxed  against 
the  person  who  has  the  power  to  use  and  dispose  of  the 
principal,  and  that  taxation  upon  the  interest  of  the  re- 
7 


194  INHERITANCE  TAXATION 

maindermen  should  be  suspended  until  they  vest  in  posses- 
sion.    I  have  repeatedly  held  that  such  a  power  is  a  base 
fee.     Therefore  the  entire  estate  belongs  to  the  widow 
for  all  purposes  except  that  of  testamentary  disposition. 
(Farmers  Loan  and  Trust  Co.  v.  Kip,  192  N.  Y.  266;  85 
N.  E.  59.)" 
See  also: 
Matter  of  Rogers,  149  Supp.  462. 

A  trust  accompanied  by  a  discretionary  power  to  the 
life  beneficiary  of  the  income,  to  use  such  part  of  the 
principal  as  she  may  demand  or  need  for  her  own  use 
or  that  of  her  children,  gives  her  the  absolute  ownership 
of  the  principal,  if  she  so  elects  and  makes  the  trust  void- 
able. 

Solley  v.  Westcott,  43  Misc.  188 ;  88  Supp.  297. 

There  is  sometimes  a  close  question  whether  there  is 
any  estate  at  all  in  the  remainderman,  as  where  there  is 
an  absolute  bequest  with  a  remainder  over  of  such  portion 
as  is  not  used.  In  such  case  the  remainder  over  is  void. 

Campbell  v.  Beaumont,  91  N.  Y.  464. 

On  the  other  hand  there  may  be  an  equally  close  ques- 
tion whether  the  will  in  fact  gives  the  power  to  invade 
the  principal.  Where  a  devise  by  a  testator  of  all  "  the 
rest,  residue,  and  remainder  "  of  his  estate,  to  his  wife 
during  her  life  "  and  after  death  I  give  and  bequeath 
the  remainder  thereof  as  follows  —  ' '  affords  no  basis 
for  the  contention  that  the  words  "  the  remainder  there- 
of "  by  implication  give  the  wife  a  right  to  use  the  prin- 
cipal, and  the  interests  of  remaindermen  are  presently 
determinable  and  subject  to  transfer  tax. 
Matter  of  Eunice,  36  Misc.  607;  73  Supp.  1120. 

A  gift  of  the  income  without  remainder  over  creates  a 
fee. 

Hatch  v.  Bassett,  52  N.  Y.  359. 


PAET  III  — THE  PARTIES  195 

Or  where  the  nature  of  the  property  is  such  that  to 
use  it  means  to  consume  it. 

Bell  v.  Warn,  4  Hun  406. 

Baumgrass  v.  Baumgrass,  5  Misc.  8;  24  Supp.  767. 

The  rule  adopted  by  the  New  York  Surrogate  in  the 
Post  case  is  that  adopted  by  the  Tax  Commission  of  Wis- 
consin, citing  as  authority: 

Larsen  v.  Johnson,  78  Wis.  300;  47  N.  TV.  615. 

The  case  relied  on  was  not  a  transfer  tax  matter  but 
substantially  held  that,  where  there  was  a  power  to  in- 
vade, the  principal  vested  in  the  life  tenant  and  a  base 
fee  was  created. 

There  is  an  excellent  discussion  of  the  entire  question 
in  Heaton  on  Surrogate's  Courts,  Third  Edition,  §  280  as 
follows : 

"  A  beneficiary  given  the  income  of  a  fund  with  the 
right  to  encroach  upon  the  principal  may  in  certain  cases 
be  the  sole  judge  of  the  occasion  and  his  necessities. 

Where  property  is  willed  without  specifying  the  nature 
of  the  estate  and  the  donee  is  given  a  power  of  disposition, 
the  latter  takes  the  absolute  title  to  the  property,  but 
where  the  donee  takes  an  estate  expressly  for  life,  with 
a  power  of  disposal  during  life,  he  takes  a  life  estate  only, 
and  whatever  is  left  of  the  estate  at  the  death  of  the  life 
tenant  passes  to  the  remainderman." 
Tompkins  v.  Fanton,  3  Dem.  4-7. 

Will  gave  the  widow  the  right  to  possess  and  enjoy  the 
fund  during  life,  and  if  necessary  to  use  the  principal  for 
her  support.  No  trustee  was  provided  for  —  Held,  that 
the  widow  was  entitled  to  the  possession  of  the  estate  and 
had  the  right  to  determine  how  much  of  the  principal  she 
should  use. 

Matter  of  Grant,  16  Supp.  716 ;  re-examined,  86  Hun   617. 
Matter  of  McDougall,  141  N.  Y.  21,  distinguished. 


196  INHERITANCE  TAXATION 

• 

Upon  payment  of  the  fund  to  a  widow  who  has  the 
right  to  use  part  or  all  of  the  fund  for  support  she  becomes 
trustee  for  the  remaindermen,  and  that  trust  devolves  upon 
her  death  upon  her  representatives  and  not  upon  those 
of  the  first  testator. 

Leggett  v.  Stevens,  77  App.  Div.  612;  79  Supp.  289. 

Devise  of  a  farm  limited  to  such  part  as  may  remain 
after  the  death  of  the  widow.  No  trust  power  given  to 
executor  —  Held:  that  the  widow  was  the  one  to  determine 
her  necessity. 

Douglass  v.  Hazen,  8  App.  Div.  27;  40  Supp.  1012. 

Will  gave  husband  use  of  the  estate  and  "  any  part  of 
the  principal  that  may  be  needed  for  his  support,"  held: 
that  the  husband  was  the  sole  judge  of  the  amount  of  the 
principal  needed  for  his  support. 

Matter  of  Parsons,  39  Misc.  126;  78  Supp.  975. 

Testator  gave  his  personal  estate  to  widow  for  life 
for  support  of  herself  and  children  —  held :  that  she  should 
have  the  possession  of  the  personal  estate  and  should  use 
so  much  as  she  deemed,  necessary  for  their  support. 
Billor  v.  Loundes,  2  Dem.  590. 

"  According  to  the  cases,  very  similar  to  this,  which 
the  courts  have  passed  upon,  the  person  having  the  life 
estate  with  power  of  using  the  principal  has  received  and 
retained  the  possession  of  the  corpus  of  the  estate  with- 
out giving  security." 

Thomas  v.  Wolford,  49  Hun  145;  1  Supp.  610. 

Judge  Peckham  said  in  Matter  of  McDougall,  141  N.  Y. 
21 :  "In  other  cases  where  it  has  been  held  that  the  legatee 
was  entitled  unconditionally  to  the  possession  of  the  legacy 
without  security,  other  facts  existed,  such  as  where  the 
language  of  the  will  made  it  manifest  that  the  testator 


PART  III  —  THE  PARTIES  197 

intended  to  give  the  legatee  power  to  use  in  his  discre- 
tion some  portion  of  the  corpus  of  the  estate  for  his  sup- 
port. ' ' 
See  also : 

Matter  of  Grant,  86  Hun  617;  16  Supp.  716. 

Matter  of  Trelease,  49  Misc.  207;  96  Supp.  318;  aff.  115  App.  Div. 

654. 

Terry  v.  Rector  St.  S.  CTi.,  79  App.  Div.  527 ;  81  Supp.  119. 
Swarthout  v.  Ranier,  143  N.  Y.  499. 

d.    WITH  POWER  or  APPOINTMENT. 

This  topic  has  already  been  considered  at  length  ante 
under  "  Powers  of  Appointment.'*  It  is  only  necessary 
to  add  here  that  the  power  does  not  raise  the  life  estate 
to  a  fee  and  is  ignored  as  an  asset  in  the  hands  of  life 
tenants.  It  does  not  seem  to  have  occured  to  any  ap- 
praiser that  a  power  of  appointment  may  be  a  very  valuable 
right.  On  the  promise  to  appoint  creditors  and  thus  pay 
their  claims  credit  may  be  secured  to  the  present  worth  of 
the  remainder  and  was  secured  to  the  amount  of  many 
thousands  of  dollars  in  a  recent  case. 

Matter  of  Slosson,  -87  Misc.  517;  149  Supp.  797;  aff.  168  App.  Div. 
891;  152  Supp.  690;  reversed,  216  N.  Y.  79. 

This  affords  one  of  the  most  curious  anomalies  in  trans- 
fer tax  law.  A  life  tenant  with  power  of  appointment  may 
at  once  sell  the  remainder  under  a  valid  contract  to  ap- 
point, and  thus  increase  the  cash  value  of  the  bequest 
by  the  amount  received  on  such  sale  in  addition  to  the 
life  estate  and  this  amount  will  be  free  and  clear  from 
the  tax,  as  against  the  life  use. 

The  will  that  creates  a  life  estate  with  a  power  of  ap- 
pointment and  contingent  remainders  over  raises  a  prob- 
lem that  the  law  of  inheritance  taxation  has  not  yet  solved 
satisfactorily. 

See  ante  "Power  of  Appointment,"  Part  U,  p.  109,  and  post,  under 
"  Remainders,"  p.  207. 


198  INHERITANCE  TAXATION 

e.     TAX  ASSESSED  ON  THEORETICAL  NOT  ACTUAL  VALUE. 

Under  the  statute  the  value  of  the  life  estate  must  be 
computed  upon  the  basis  of  5  per  cent  interest  irrespec- 
tive of  the  actual  income  of  the  fund,  whether  higher  or 
lower. 

Matter  of  Potter,  139  App.  Div.  905;  124  Supp.  1126;  aff.  199  N.  Y. 
561;  93  N.  E.  378. 

The  theoretical  value  of  a  life  estate  computed  upon 
the  mortality  tables  and  rate  of  interest  fixed  by  the 
statute  is  the  value  at  death  of  the  testator,  and  not  the 
actual  duration  of  life  and  it  is  the  legal  measure  of  the 
value  of  a  life  estate  although  the  life  tenant  only  survived 
the  testator  a  few  months. 

Howe  v.  Howe,  179  Mass.  546;  61  N.  E.  225. 

Though  it  might  seem  an  injustice  to  tax  the  theoreti- 
cal value  of  a  life  estate  of  a  woman  of  30  whose  expecta- 
tion of  life  is  35  years  and  whose  interest  in  the  fund  is 
about  three  fourths  its  entire  amount  at  full  value  when 
she  actually  survives  the  testator  only  a  few  hours,  the 
logic  that  a  time  must  be  fixed  for  valuation  and  that 
time  is  the  death  of  the  testator  is  immutable  and  has 
thus  far  been  uniformily  sustained. 

The  Supreme  Court  of  Wisconsin  reasons  thus: 

"  The  right  to  receive  being  the  subject  of  inheritance 
taxation,  the  amount  is  regulated,  primarily,  by  the  value 
of  the  right.  The  right  in  the  particular  case  has  refer- 
ence to  the  privilege  to  receive,  for  life,  the  yearly  pay- 
ments. There  may  be  many  payments,  but  the  right  is 
an  entirety.  That  vested,  subject  to  the  burden  on  the 
transfer,  as  soon  as  the  will  was  allowed.  Clearly  it 
could  be  valued,  the  transfer  tax  be  assessed  thereon,  and 
be  wholly  liquidated,  if  such  be  the  legislative  plan." 

State  v.  Widule,  161  Wis.  389 ;  154  N.  W.  695. 


PART  III  — THE  PARTIES  199 

In  New  York  the  Appellate  Division  took  another  view 
and  held  that  where  the  life  tenant  died  shortly  after  the 
testator  the  actual  duration  of  life  should  be  the  measure 
of  value;  but  this  decision  was  reversed  by  the  Court  of 
Appeals  in: 

Matter  of  White,  208  N.  Y.  64;  101  N.  E.  793. 

The  court  says,  at  page  68: 

"  The  rule  promulgated  by  the  legislature  effects  cer- 
tainty and  uniformity  which  the  principle  adopted  by  the 
Appellate  Division  would  tend  to  destroy  while 

in  this  case  the  rule  works  to  the  advantage  of  the  state, 
inasmuch  as  the  remainder  passes  to  a  religious  corpora- 
tion which  is  exempt  from  the  tax,  such  manifestly  is 
not  its  necessary  or  uniform  result  and  it  is  not  subject 
to  criticism  as  harsh  or  unjust." 

Where  there  was  a  power  to  invade  the  principle  the 
Surrogate  deducted  the  actual  and  not  the  theoretical  value 
of  the  life  interest.  The  question  has  not  since  been 
raised  but  the  authority  is  weakened  if  not  overruled  by 
the  subsequent  cases. 

Matter  of  Hall,  36  Misc.  618;  73  Supp.  1124. 

3.  Remainders. 

The  immediate  taxation  and  valuation  of  a  life  estate  is 
simple  and  apparently  equitable,  as  far  as  any  tax  on 
the  principal  of  a  fund  can  be  so  regarded.  The  immediate 
taxation  of  remainder  interests  is  neither  as  simple  nor  as 
equitable.  As  it  reduces  the  fund  the  life  tenant  must 
suffer  while  to  make  the  remainderman  pay  for  a 
benefit  he  may  never  live  to  enjoy  also  seems  unjust. 
Many  states  give  the  remainderman  an  election  to 
pay  at  once  or  file  a  bond  to  pay  when  the  re- 
mainder accrues.  This  is  more  simple  and  does  not 
deplete  the  fund  but  it  is  a  hardship  on  the  remainderman 
and  works  to  the  disadvantage  of  the  state.  The  collec- 
tion of  the  tax  is  postponed  for  a  generation.  The 


200  INHERITANCE  TAXATION 

expense  of  watching  bondsmen  and  beneficiaries  is  great, 
the  amount  of  labor  burdensome  and  the  financial  results 
not  commensurate.  This  has  led  many  important  states 
to  require  the  immediate  taxation  of  all  remainders  at 
the  highest  possible  rate,  to  be  paid  out  of  the  principal 
fund. 

a.  THE  LAW  IN  FORCE  AT  DEATH  OF  TESTATOR  GOVERNS. 

It  is  the  statute  in  force  at  the  death  of  the  testator  and 
not  that  in  force  at  the  date  of  the  death  of  the  life  tenant 
which  governs  the  taxation  of  remainders.  If  taxation 
has  been  suspended  for  any  reason  this  rule  often  brings 
the  case  under  obsolete  provisions  and  antiquated  authori- 
ties. 

State  ex  rel.  Basting  v.  Probate  Court,  132  Minn.  104;  155  N.  W.  1077. 
Matter  of  Mason,  120  App.  Div.  738;  105  Supp.  667;  aff.  189  N.  Y. 

556;  82  N.  E.  1129. 

Matter  of  Roosevelt,  143  N.  Y.  120 ;  38  N.  E.  281. 
Matter  of  Meserole,  98  Misc.  105;  162  Supp.  414. 

b.  VESTED    REMAINDERS    NOT    TAXABLE    WHEN    TESTATOR 

DIED  BEFORE  THE  STATUTE. 

Remainders  that  vested  prior  to  the  statute  are  not 
taxable  at  the  death  of  the  life  tenant  and  a  statute  declar- 
ing them  so  is  unconstitutional. 

Matter  of  Pell,  171  N.  Y.  48;  63  N.  E.  789. 
Matter  of  O'Berry,  179  N.  Y.  285;  72  N.  E.  109. 

An  this  is  so  even  though  the  remainder  be  defeasible. 

Matter  of  Smith,  150  App.  Div.  805;  135  Supp.  240. 
Matter  of  Hitchins,  43  Misc.  485;  89  Supp.  472;  aff.  181  N.  Y.  553; 
74  N.  E.  1118. 

The  court  said  in  the  Hitchins  case  at  page  493: 
"  Where  a  vested  though  defeasible  interest  in  remain- 
der passes  under  a  will  to  a  remainderman  on  the  testator 's 
death,  though  the  possession  does  not  pass  until  the  death 
of  the  life  tenant,  the  transfer  or  succession  is  referred 
to  the  time  of  the  death  of  the  testator,  and  if  that  occurred 


PABT  III  — THE  PARTIES  201 

prior  to  the  enactment  of  the  act  taxing  transfers  of  prop- 
erty, the  remainder  is  not  taxable.'* 

Matter  of  Seaman,  .147  N.  Y.  69;  41  N.  E.  401. 
Matter  of  Stewart,  131  .N.  Y..274;  30  N.  E.  184. 
Matter  of  Curtis,  142  N.  Y.  219;  36  N.  E.  887. 
Matter  of  Langdon,  153  N.  Y.  6;  46  N.  E.  1034. 

c.  TAXATION  POSTPONED  UNTIL  REMAINDERMAN  GETS 'POS- 

SESSION. 

It  was  formerly  the  rule  in  New  York  and  still  is  in 
many  states  to  postpone  the  taxation  of  the  remainder 
until  the  expiration  of  the  intermediate  estate. 

'McLemore  v.  Raines'  Estate,  131  Term.  637;  176  S.  W.  109. 
State  ex  rel  Hale  v.  Probate  Court,  100  Minn.  192;  110  N.  W.  865. 
Matter  of  Cager,  111  N.  Y.  343;  18  N.  E.  866. 
Matter  of  Hoffman,  143  N.  Y.  327;  38  N.  E.  311. 

d.  PRESENTLY  TAXABLE. 

By  Chapter  76,  L.  1899,  the  rule  was  changed  in  New 
York  providing  for  the  present  taxation  at  the  highest 
possible  rate  of  all  contingent  remainders  with  a  refund 
in  case  a  lower  rate  ultimately  proves  to  be  due.  This 
statute  has  been  copied  in  many  states  and  is  held  consti- 
tutional. 

Matter  of  Vanderbilt,  172  N.  Y.  69 ;  64  N.  E.  782. 
Matter  of  Brez,  172  N.  Y.  609 ;  64  N.  E.  958. 
Matter  of  Kennedy,  93  App.  Div.  27 ;  86  Supp.  1024. 

The  taxation  is  against  the  trustees  who  take  the  legal 
title.  Order  of  Surrogate  affirmed  without  opinion. 

Matter  of  Guggenheim,  189  N.  Y.  561;  82  N.  E.  1127. 

But  where  the  person  to  whom  the  contingent  remain- 
der might  pass  was  uncertain  the  courts  still  suspended 
taxation  until  the  uncertainty  was  removed. 

Matter  of  Zborowski,  84  Misc.  342;  145  Supp.  1101;  revd.  213  N.  Y. 

109. 

Matter  of  Granfield,  79  Misc.  374;  140  Supp.  922. 
State  ex  rel.  Basting  v.  Probate  Court,  101  Minn.  485;  112  N.  W.  878. 
Same  Case,  132  Minn.  104;  155  N.  W.  1077. 


202  INHERITANCE  TAXATION 

e.     WHEN  BENEFICIARY  is  UNCERTAIN. 

It  was  held  by  the  N.  Y.  Court  of  Appeals  in  Matter  of 
Zborowski,  supra,  that  even  when  the  ultimate  beneficiary 
was  uncertain  the  remainder  was  taxable  at  the  highest 
possible  rate.  The  decedent  gave  her  residuary  estate  in 
trust  to  pay  the  income  to  her  son  Louis  until  he  attained 
the  age  of  21  years,  but  if  he  did  not  live  to  be  21  then  to 
his  issue,  if  any,  and  in  default  of  issue,  to  persons  taxable 
at  5  per  cent  rate.  Under  the  ruling  of  the  Zboroivski 
decision  the  tax  was  imposed  at  the  5  per  cent  rate  against 
the  trustee  for  the  5  per  cent  class. 

In  discussing  the  legislative  policy  in  adopting  this  pro- 
vision the  court  said: 

"  The  different  statutes  hereinbefore  referred  to  con- 
tain evidence  of  a  constant  effort  of  the  legislature  to 
enlarge  the  class  of  transfers  immediately  taxable  upon 
the  death  of  the  transferror.  The  question  of  the  legisla- 
ture 's  power  in  that  regard  was  set  at  rest  by  the  decision 
of  this  court  in  Matter  of  Vanderbilt.  In  one  aspect  it 
may  be  unjust  to  the  life  tenant  to  tax  at  once  the  transfer, 
both  of  the  life  estate  and  of  the  remainder  though  con- 
tingent, and  it  may  seem  unwise  for  the  state  to  collect 
taxes  which  it  may  have  to  refund  with  interest,  but  those 
considerations  are  solely  for  the  legislature,  who  are  to 
judge  whether  they  are  more  than  offset  by  the  greater 
certainty  which  the  state  thus  has  of  receiving  the  tax 
ultimately  its  due  under  the  statute.  However  unwise 
or  unjust  it  may  seem  in  a  particular  case  like  this  for  the 
state  to  collect  the  tax  at  the  highest  rate  when  in  all  prob- 
ability the  remainder  will  vest  in  a  class  taxable  at  the 
lowest  rate,  it  is  the  duty  of  this  court  to  give  effect  to  the 
statute  as  it  is  written." 

To  the  same  effect  is: 

Matter  of  Shearson,  174  App.  Div.  866;  affd.  220  N.  Y.  mem. 


PAKT  III  — THE  PARTIES  203 

A  similar  statute  has  been  construed  in  like  manner  by 
the  court  of  Illinois. 

Ayres  v.  Chicago  Title  &  Trust  Co.,  187  111.  42 ;  58  N.  E.  318. 

When  the  remainder  interest  belongs  to  a  decedent  while 
the  life  tenant  still  survives  it  is  none  the  less  presently 
taxable  as  in  Matter  of  Huber,  86  App.  Div.  458,  461 ;  83 
Supp.  769,  where  the  will  read:  "  The  interest  which  I 
may  have  in  the  estate  of  my  deceased  father  which  in- 
terest is  now  subject  to  the  life  estate  of  my  mother." 

Under  the  circumstances  the  value  of  the  life  estate 
of  the  mother  at  the  death  of  the  remainderman  is  valued 
and  deducted  from  the  fund,  the  balance  being  presently 
taxable. 

So  where  a  remainderman  had  an  estate  in  a  trust  fund 
subject  to  the  life  use  of  a  brother  the  lower  courts  were 
reversed  and  the  matter  remitted  to  the  Surrogate  on  this 
theory.  The  remainder  interest  belonged  to  a  non-resi- 
dent. The  surrogate  erroneously  suspended  taxation  un- 
til the  death  of  the  life  tenant.  Meantime  the  statute 
taxing  transfers  of  non-resident  property  was  repealed; 
but  the  court  held  that  the  remainder  interest,  being  pres- 
ently taxable,  the  repealing  act  did  not  avoid  the  tax. 
Matter  of  Wright,  214  N.  Y.  714;  108  N.  E.  1112. 

There  was  apparently  an  exception  where  the  life  estate 
was  defeasible  by  re-marriage  because  it  is  impossible 
to  value  the  life  estate  by  the  use  of  the  mortality  tables. 
While  the  probability  of  death  may  be  estimated  from  these 
tables,  there  are  no  statistics  available  from  which  the 
probability  of  remarriage  may  even  be  conjectured. 
Herold  v.  Shanley,  146  Fed.  20 ;  76  C.  C.  A.  478. 

New  York,  and  most  of  the  other  state  statutes,  meet 
this  difficulty  by  providing  that  the  life  estate  shall  be 
assessed  without  regard  to  the  possibilty  of  its  being 
divested.  This  is  regarded  as  fair  to  the  life  tenant 


INHERITANCE  TAXATION 

because  it  is  her  own  act  that  defeats  the  estate  and  the 
remaindermen  cannot  complain  because  they  get  the  prop- 
erty all  the  sooner. 

Matter  of  Plum,  37  Misc.  466 ;  75  Supp.  940. 
Matter  of  Baugham,  (N.  C.)  90  S.  E.  203. 
Stengel  v.  Edwards,  (N.  J.)  98  A.  424. 

Cases  have  even  been  known  where  the  remaindermen 
have  devoted  much  enterprise  and  exercised  subtile  diplo- 
macy to  produce  the  bridegroom  and  smooth  the  path  of 
true  love.  Thus  doeth  the  winged  God  sweep  the  cobwebs 
spun  by  the  legal  mind. 

f.     HIGHEST  POSSIBLE  RATE. 

Even  though  the  possibility  is  remote  that  the  bequest 
will  go  to  anyone  taxable  at  the  higher  rate  the  courts 
have  upheld  the  provision  of  the  statute  requiring  taxation 
at  the  highest  possible  rate.  Thus,  where  there  was  a 
trust  for  20  years  to  pay  the  income  to  a  brother  and  two 
sisters,  and  if  all  should  die  during  that  period  then  to  a 
nephew,  the  tax  was  imposed  at  the  highest  rate  on  the 
possibility  that  all  three  life  tenants  might  die  immediately 
in  some  catastrophe. 

People  v.  Starring,  274  111.  289;  113  N.  E.  627. 

When  by  the  terms  of  a  will  it  is  possible  that  if  all  the 
children  of  testator  named  as  remaindermen  should  die 
without  issue  at  the  same  time  in  a  single  catastrophe  the 
property  would  go  to  a  contingent  remainderman  taxable 
at  the  5  per  cent  rate;  held,  that  the  transfer  should  be 
assessed  at  the  higher  percentage  although  the  possibility 
of  the  contingent  remainderman  taking  is  extremely 
remote. 

Matter  of  Button,  176  App.  Div.  217;  160  Supp.  223;  aff.  220  N.  Y. 
210. 

Where  the  will  created  a  trust  for  a  grandson  until  he 
was  25,  if  he  died  before  25,  to  his  issue,  with  no  provision 


PART  III  —  THE  PARTIES  205 

in  case  of  failure  of  issue,  held  that  the  fee  vested  in  the 
grandson  subject  to  be  divested,  therefore  no  remainder 
existed  to  be  taxed  as  a  construction  creating  an  intestacy 
was  to  be  avoided. 

Matter  of  Zitzlsperger,  170  App.  Div.  615;  156  Supp.  571. 

In  spite  of  the  apparent  difficulty,  however,  the  method 
has  worked  out  in  practice  and  has  been  adopted  in  other 
states.  In  New  Jersey  the  problem  of  the  transfer  of 
stock  in  New  Jersey  corporations  subject  to  the  exercise 
of  a  power  of  appointment  came  before  the  Court  of 
Errors  and  Appeals  in  Security  Trust  Co.  v.  Edwards, 
decided  June  18,  1917,  and  not  yet  reported.  The  court 
said: 

* '  It  seems  quite  plain  that  in  obeying  this  mandate,  the 
tax  on  the  interests  in  remainder  will  normally  await  the 
termination  of  the  particular  estate;  the  counsel  urge  as 
a  ground  of  invalidity  of  such  tax,  that  it  becomes 
impossible  for  the  executor  or  trustee  to  transfer  shares 
in  New  Jersey  corporations  until  that  time,  without 
submitting  to  the  requirement  of  section  12  for  pay- 
ment of  full  five  per  cent,  tax,  which  was  upheld 
in  Senff  v.  Edwards,  85  N.  J.  L.  67,  or  depositing 
a  five  per  cent,  tax  with  the  Comptroller  and  taking 
out  a  waiver,  as  provided  in  chapter  58  of  the  Laws  of 
1914.  These  provisions  appear  to  be  aimed  particularly 
at  the  transfer  of  the  legal  estate  in  stock  to  a  purchaser, 
or  the  like,  rather  than  at  the  particular  succession  of  a 
legatee  in  remainder.  There  is  also  the  provision  con- 
tained in  the  last  paragraph  of  Section  3,  permitting  the 
compounding  on  equitable  terms  of  a  tax  not  presently 
payable,  which  is  evidently  the  tl  compromise  *:  men- 
tioned in  Senff  v.  Edwards,  supra.  The  statutory  scheme 
is  not  obscure.  If  the  executor  wishes  to  sell  the  stock, 
without  waiting  for  the  specific  assessment  based  on 
interests  created  by  the  will,  it  can  be  done  by  paying 
the  five  per  cent,  tax  under  Section  12,  or  depositing  it 


206  INHERITANCE  TAXATION 

under  the  Act  of  1914,  p.  97,  subject  to  refund  of  excess 
when  later  ascertained;  or  by  paying  the  tax  on  the  par- 
ticular interests  as  presently  due,  and  compromising  that 
against  the  remainders  upon  an  equitable  ascertainment 
of  its  present  worth,  according  to  Section  3.  We  are 
unable  to  see  that  this  scheme  gives  rise  to  any  unjust  or 
unconstitutional  discriminations.  It  may  be  said  that  the 
point  is  not  before  us  except  as  contained  in  the  reasons 
for  setting  aside  a  five  per  cent,  tax  on  remainders  pres- 
ently payable." 

g.     MAXIMUM  AXD  MINIMUM  RATE. 

In  order  to  lessen  the  hardship  of  the  rule  as  against 
life  tenants  the  New  York  statute  and  those  of  some  other 
states  provides  that  the  order  assessing  the  tax  should 
state  the  amount  due  at  the  highest  possible  rate  and  also 
the  amount  which  would  be  due  if  the  intermediate  estate 
terminated  immediately  at  the  date  of  the  appraisal. 

As,  for  example,  in  the  Zborowski  case  supra,  if  the  son 
Louis  Zborowski  had  reached  the  age  of  21  at  the  date 
of  the  appraisal  the  amount  of  the  tax  would  be  at  the 
1  per  cent  rate  instead  of  the  5  per  cent  rate  assessed  on 
the  possibility  that  the  property  would  go  to  distant 
relatives. 

The  difference  between  the  tax  assessed  at  the  5  per 
cent  rate  and  that  which  would  be  due  at  the  1  per  cent 
rate  is  required  to  be  deposited  in  money  or  securities 
and  the  state  pays  interest  on  the  fund  to  the  trustees 
while  the  minimum  tax  goes  to  the  treasury  as  part  of 
the  tax  collections  for  the  current  year. 

Under  the  complex  provisions  of  some  wills  the  drawing 
of  the  taxing  order  thus  provided  for  has  proved  difficult 
and  so  vexing  that  one  surrogate  refused  to  make  such  a 
computation  until  directed  to  do  so  by  the  Appellate 
Division. 

Matter  of  Spingarn,  175  App.  Div.  806 ;  162  Supp.  695. 


PART  III  — THE  PARTIES  207 

In  ordinary  cases  the  rule  works  substantial  justice. 
It  only  applies  where  there  is  a  trust  fund  subject  to  a 
life  estate  and  the  fact  that  a  portion  of  that  fund  is  held 
by  the  state  treasury,  and  pays  interest  during  the  life 
estate  places  no  unjust  burden  on  the  life  tenant  while 
keeping  the  property  intact  for  the  remainderman.  The 
only  trouble  is  in  the  rigid  application  of  maximum  and 
minimum  rates  to  small  estates  where  the  amount  of  book- 
keeping involved  costs  more  than  the  tax.  For  forms  and 
further  discussion  see  Pt.  V,  p.  413  et.  seq. 

h.     WHERE  AMOUNT  OF  REMAINDER  is  UNCERTAIN. 

Where  a  legacy  was  devised  to  an  exempt  charitable 
corporation  as  long  as  it  should  continue  present  activities 
but  when  it  ceased  so  to  do  then  to  heirs  at  law  of  testatrix 
it  was  held  that  the  legacy  was  to  be  valued  and  exempted 
and  taxation  suspended  on  the  contingent  remainder,  dis- 
tinguishing Matter  of  Zborowski,  on  the  ground  that  it 
was  not  only  uncertain  who  the  remaindermen  would  be; 
but,  also,  whether  there  would  be  any  remainder  to  be 
taxed. 

Matter  of  Terry,  218  N.  Y.  218;  112  N.  E.  931. 

As  we  have  just  seen  this  principle  has  recently  been 
applied  where  the  life  tenant  has  a  discretion  to  use  the 
principal  fund  and  there  may  be  no  remainder. 

Matter  of  Post,  supra,  p.  193. 

i.     UNDER  POWERS  OF  APPOINTMENT. 

There  has  been  some  confusion  as  to  the  present  taxation 
of  remainders  where  the  life  tenant  has  a  power  of 
appointment.  When  the  question  was  first  raised  in  New 
York  the  provision  of  the  statute  taxing  the  transfer  in 
the  estate  of  the  donee  of  the  power  whether  it  was 
exercised  or  not  was  not  attacked  as  unconstitutional  and 
it  was  held  that  where  an  absolute  power  of  appointment 


208  INHERITANCE  TAXATION 

is  bestowed  upon  the  beneficiary  of  a  trust,  taxation  should 
be  suspended  until  the  remainders  fall  in,  as  the  tax  is 
on  the  exercise  of  the  power  by  the  donee  as  a  part  of 
the  donee's  estate. 

Matter  of  Howe,  86  App.  Div.  286;  83  Supp.  825;  13  Ann.  Cas. 

347;  aff.  176  N.  Y.  570;  68  N.  E.  1118. 
Matter  of  Field,  36  M'isc.  279;  73  Supp.  572. 

In  a  subsequent  case  it  was  pointed  out  that  where  the 
power  was  defeasible  it  might  not  be  exercised  at  all  and 
therefore  taxation  must  be  imposed  in  the  estate  of  the 
donor  at  the  highest  possible  rate  because  the  beneficiaries 
might  take  under  the  will  of  the  donor  as  there  might  be 
no  power  to  exercise. 

Matter  of  Burgess,  204  N.  Y.  265;  97  N.  E.  591. 
Matter  of  Gulick,  N.  Y.  L.  J.,  March  20,  1914. 

If  a  limited  or  contingent  power  of  appointment  is  sub- 
sequently exercised,  although  the  remainder  has  already 
been  taxed  in  the  estate  of  the  donor,  under  Matter  of 
Burgess,  204  N.  Y.  265,  the  tax  on  the  transfer  by  the 
donee  of  the  power  must  none  the  less  be  imposed  in  the 
estate  of  the  donee.  The  remedy,  if  any,  is  modification  of 
the  taxing  order  in  the  estate  of  the  donor  of  the  power. 

Matter  of  Buckingham,  106  App.  Div.  13;  94  Supp.  130. 
Matter  of  McLean,  N.  Y.  L.  J.,  July  18,  1914. 

Where  a  husband  died  exercising  a  power  in  his  wife's 
favor  and  she  died  ten  days  after  he  did  the  property 
vested  in  her  and  was  taxable  as  part  of  her  estate  though 
she  never  came  into  possession. 

Matter  of  Lord,  111  App.  Div.  152;  97  Supp.  553;  aff.  186  N.  Y. 
549;  79  N.  E.  1110. 

In  the  Matter  of  Clarke,  39  Misc.  73,  78  Supp.  869,  it 
was  held  that  a  remainder  was  not  presently  taxable  where 
it  is  limited  to  children  of  a  life  tenant,  or  her  appointees 
by  will,  and  she  is  not  shown  to  have  any  children,  as,  in 


PART  III  — THE  PABTIES  209 

such  case,  no  transfer,   defeasible   or  otherwise,   of  the 
remainder  had  yet  been  made. 

The  complexity  of  the  situation  was  further  increased 
in  New  York  by  the  repeal  of  the  provision  in  1911  which 
taxed  the  transfer  in  the  estate  of  the  donee  on  failure  to 
exercise  the  power.  This  provision  had  been  declared 
unconstitutional  as  to  powers  created  by  decedents  prior 
to  the  statute;  but  the  repeal  makes  it  possible  that  any 
transfer  under  a  power  of  appointment  may  pass  under 
the  will  of  the  donor,  if  the  donee  fails  to  exercise  the 
power ;  and  the  result  is  that  such  transfers  must  be  taxed 
in  both  estates.  For  a  long  while  it  was  supposed  that 
this  was  so  only  as  to  limited  powers,  under  the  Burgess 
decision,  but  the  Appellate  Division  recently  pointed  out 
the  situation  when  the  taxation  of  an  absolute  power  had 
been  suspended  in  the  estate  of  the  donor.  The  question 
before  the  court  was  one  of  trustee's  commissions;  but 
the  court  said:  "  We  are  not  passing  upon  the  propriety 
of  the  suspension  of  the  tax  nor  stating  a  rule  to  be  applied 
when  the  tax  is  not  suspended." 

Matter  of  Vanneck,  175  App.  Div.  363,  366;  161  Supp.  893. 

The  statute  imposing  a  tax  upon  the  exercise  of  the 
power  applies  where  the  power  is  exercised  by  deed  in  the 
same  way  as  when  the  appointment  is  by  wilL 
Matter  of  Wendel,  95  Misc.  406;  160  Supp.  822. 

Where  the  exercise  of  the  power  by  the  donee  does  not 
effectually  dispose  of  all  of  the  property  the  portion  not 
disposed  of  must  be  taxed  in  the  estate  of  the  donor. 

Matter  of  Tompkins,  N.  Y.  L.  J.,  Aug.  11,  1913. 

Where  taxed  in  the  estate  of  the  donee  the  property 
must  be  valued  as  of  the  date  of  the  exercise  of  the  power. 
Matter  of  Tucker,  27  Misc.  616;  50  Supp.  699. 

The  difficulties  in  which  the  question  is  involved  are 
illustrated  in  the  estates  of  William  H.  and  Louise 


210  INHERITANCE  TAXATION 

Tillinghast.  Under  the  will  of  the  former  a  power  of  ap- 
pointment was  given  to  Louise  Tillinghast  to  be  exercised 
11  while  she  remains  his  widow."  In  default  of  the  exercise 
of  the  power  the  property  passed  to  residuary  legatees. 
It  was  taxed  in  the  estate  of  William  H.  Tillinghast  on  the 
theory  that  the  power  was  "  limited  "  as  Mrs.  Tillinghast 
might  remarry  and  not  exercise  it.  The  tax  was  paid  at 
the  5  per  cent.  rate.  Mrs.  Tillinghast  did  not  remarry 
but  died  leaving  a  will  exercising  the  power  in  favor  of 
children  by  her  first  husband  who  were  in  the  1  per  cent 
class  as  to  her  and  in  the  5  per  cent  as  to  W.  H.  Tillinghast, 
her  second  husband. 

The  exercise  of  the  power  was  taxed  in  her  estate  at  1 
per  cent;  but  the  court  held  that  the  tax  paid  out  of  the 
William  H.  Tillinghast  estate  could  not  be  applied  nor 
could  the  transfer  under  the  power  escape  taxation 
because  there  had  been  a  tax  paid  in  the  estate  of  the 
donor. 

Matter  of  Tillinghast,  Louise,  94  Misc.  50 ;  157  Supp.  382. 

A  motion  was  then  made  to  modify  the  order  made  more 
than  six  years  before  taxing  the  fund  in  the  William  H. 
Tillinghast  estate.  The  comptroller  opposed  the  motion 
on  the  ground  that  the  statute  of  limitations  had  run  and 
also  on  the  ground  that  the  remedy  was  by  appeal  from 
the  original  order.  The  surrogate  decided  against  •  him 
and  modified  the  original  taxing  order. 

Matter  of  Tillinghast,  W.  H.,  94  Misc.  76 ;  157  Supp.  379. 

The  comptroller  appealed  from  this  order  and  the  estate 
from  the  order  in  the  Louise  Tillinghast  matter  and  both 
cases  are  to  be  argued  before  the  Appellate  Division,  First 
Department,  at  the  next  term.  (Oct.  1917) 

As  the  matter  stands,  remainders  after  a  power  of 
appointment  should  be  taxed  at  the  highest  possible  rate 
in  the  estate  of  the  donor,  the  tax  to  be  refunded  in  case 


PABT  III  — THE  PARTIES  211 

the  donee  exercises  the  power  and  thus  defeats  the  remain- 
dermen of  the  donor's  estate.  This  demonstrates  the 
advantage  of  that  provision  in  the  statute  sustained  in 
Massachusetts  and  the  states  which  follow  its  lead  taxing 
transfer  in  the  estate  of  the  donee  of  the  power,  whether 
the  power  is  exercised  or  not. 

j.     TAXATION  OF  FULL  UNDIMINISHED  VALUE. 

The  New  York  Statute  and  those  of  many  other  states 
provide  as  follows  in  regard  to  the  taxation  of  contingent 
remainders  wrhere  taxation  has  been  suspended  or  post- 
poned until  the  remainderman  come  into  possession; 

'  *  Estates  in  expectancy  which  are  contingent  or  defeas- 
ible and  in  which  proceedings  for  the  determination  of  the 
tax  have  not  been  taken  or  where  the  taxation  thereof  has 
been  held  in  abeyance,  shall  be  appraised  at  their  full, 
undiminished  value  when  the  persons  entitled  thereto  shall 
come  into  the  beneficial  enjoyment  or  possession  thereof, 
without  diminution  for  or  on  account  of  any  valuation 
theretofore  made  of  the  particular  estates  for  purposes 
of  taxation,  upon  which  said  estates  in  expectancy  may 
have  been  limited. ' ' 

This  provision  was  held  retroactive  in: 
Matter  of  Hoosack,  39  Misc.  130 ;  78  Supp.  983. 

and  not  retroactive  in 

Matter  of  Buckham,  N.  Y.  L.  J.,  Jan.  10,  1912. 

To  Illustrate :  A  life  estate  in  $100,000  to  a  widow  of 
30  is  valued  on  the  5%  basis  at  $75,421.25  and  taxation  on 
the  value  of  the  remainder  presently  worth  $24,578.75  is 
suspended.  When  the  remainder  falls  in,  that  is,  when  the 
life  tenant  dies,  the  tax  must  be  paid  on  the  full  $100,000. 
This  has  caused  much  litigation  on  the  ground  of  double 
taxation. 

But  if  the  remainder  is  taxed  at  1%,  the  tax  presently 


212  INHERITANCE  TAXATION 

payable  is  $245.78,  which  is  the  present  worth  of  $1,000  at 
the  end  of  the  life  tenant 's  expectation  of  life.  Therefore, 
if  the  tax  is  suspended  or  postponed  to  the  death  of  the 
life  tenant,  it  should  pay  the  tax  on  the  full  amount  which 
would  be,  at  \%  $1,000. 

This  proposition  has  been  sustained  by  the  authorities. 

Matter  of  Eno,  N.  Y.  L.  J.,  April  24,  1913. 

Matter  of  Seligman,  170  App.  Div.  837;  156-  Supp.  648;  aff.  219 

N.  Y.  114. 

Matter  of  Eucki,  172  App.  Div.  455 ;  158  Supp.  657. 
Matter  of  Dickey,  174  App.  Div.  467 ;  160  Supp.  646. 

In  affirming  the  Seligman  case  Judge  Pound,  writing  for 
the  Court  of  Appeals  said: 

11  When  taxation  has  been  held  in  abeyance  the  con- 
tingent or  defeasible  estate  in  expectancy  is  to  be 
appraised  at  its  full  value  when  the  persons  entitled 
thereto  shall  come  into  the  beneficial  possession  or  enjoy- 
ment thereof.  Thus  in  the  Terry  case  (216  N.  Y.  218),  if 
the  legacy  to  the  McGregor  home  should  revert  to  the 
heirs,  it  would  then  be  appraised  and  taxed  at  its  full  value 
without  any  deduction.  In  such  a  case,  because  we  cannot 
presently  carve  out  of  one  total  the  value  of  the  present 
and  future  estates,  the  legislature  has  established  the  rule 
of  giving  both  estates  the  highest  possible  value  as  the 
persons  entitled  thereto  respectively  take  possession.  In 
the  case  at  bar  the  entire  future  interest  of  the  sons  might, 
in  the  first  place,  have  been  appraised  for  taxation  and 
the  tax  then  paid  on  such  valuation ;  but,  as  payment  was 
postponed,  the  tax  should  now  be  upon  the  full  value." 

The  importance  of  this  provision  in  the  statute  is  illus- 
trated in  State  ex  rel.  Basting,  101  Minn.  485;  112  N.  W. 
878,  where  there  was  a  trust  for  three  daughters  for  ten 
years.  The  tax  was  suspended  because  it  was  uncertain 
whether  the  daughters  would  survive.  This  was  in  1905. 
In  1916  the  ten  years  had  expired  and  the  matter  again 
came  before  the  court  in  State  ex  rel.  Basting,  132  Minn. 


PAET  III  — THE  PAETIES  213 

104;  155  N.  W.  1077.  There  was  no  provision  in  the  law 
in  1905  for  taxing  at  full  undiminished  value.  The  court 
valued  the  estate  as  it  existed  in  1916  and  then  taxed  the 
present  worth  of  that  sum  at  the  death  of  the  testator  in 
1905.  Obviously  the  state  lost  the  interest  on  the  tax  for 
ten  years  by  this  method. 

"  Full  undiminished  value  "  means  the  value  as  of  the 
death  of  the  testator  undiminished  by  any  deduction  for 
the  life  estate ;  it  does  not  mean  increase  in  the  value  of  the 
estate  since  the  death  of  the  testator. 
Matter  of  Lawson,  N.  Y.  L.  J.,  Jan.  3,  1914. 

E.—  COMPUTATIONS. 

1.  The  Basis  of  Calculation. 

a.     MORTALITY  TABLES  AND  INTEREST  BATE. 

Computations  of  the  value  of  life  estates  and  annuities, 
remainders,  dower,  curtesy  and  the  like  are  by  the  statutes 
required  to  be  made  by  the  judge  of  probate  or  the  insur- 
ance department  and  are  invariably  referred  to  experts 
whose  computations  are  conclusive  as  to  method. 
Matter  of  Davis,  91  Hun  52;  36  Supp.  822. 

But  the  attorney  is  usually  expected  to  advise  his  client 
what  the  tax  on  such  estates  is  likely  to  be  and  no  lawyer 
likes  to  feel  helpless  in  the  hands  of  the  mathematician, 
though  he  usually  is  so. 

By  the  use  of  prepared  tables  the  more  simple  calcula- 
tions may  be  made  by  any  attorney,  given  the  rate  of 
interest,  and  the  table  of  mortality  prescribed  in  the 
particular  state. 

These  mortality  tables,  known  as  the  Actuaries'  Com- 
bined Experience  table,  the  American  Experience  table 
and  the  Carlisle  table  of  mortality  are  based  on  the 
experience  of  insurance  companies  in  the  observation  of 
a  large  number  of  lives  and  were  originally  prepared  for 


214 


INHERITANCE  TAXATION 


insurance  purposes.  Lawyers  and  judges  found  them 
available  for  the  valuation  of  life  estates  and  remainders 
for  the  purpose  of  inheritance  taxation. 

The  expectation  of  life  from  year  to  year  being  approxi- 
mated by  these  tables  of  mortality,  the  computation  of  the 
present  worth  of  an  annual  income  at  a  given  rate  of 
interest  becomes  possible. 

The  first  step  is  to  know  what  table  of  mortality  is  used 
in  a  particular  state  and  what  is  the  rate  of  interest  upon 
which  the  computation  is  to  be  based. 

This  can  be  ascertained  by  the  following  table: 

KEY  TABLE 

Showing  rate  of  interest  and  Mortality  Table  used  in  the  Different  States 
for  Inheritance  Tax  Cancellations. 


State 

Arkansas 

Arizona 

California 

Colorado  , 

Connecticut    

Delaware  

Georgia 

Hawaii 

Idaho  

Illinois 

Indiana 

Iowa 

Kansas    

Kentucky  

Louisiana 

Maine 

Maryland   

Massachusetts 

Michigan 

Minnesota 

Missouri 

Montana  

Nebraska 

Nevada   

New  Hampshire  .. 
New  Jersey 


Rate  of  Table  of  Mortality  Used  and  Initial  Referring 
Interest  to  Table 

,  5  B  Actuaries'  Combined  Table. 

.          4  A  Actuaries'  Combined  Table. 

5  B  Actuaries'  Combined  Table. 

5  B  Actuaries'  Combined  Table. 

.  5  D  American  Experience  Table. 

6  American  Experience  Table. 
6  F  Carlisle  Table. 

5  D  American  Experience  Table. 

.  5  B  Actuaries'  Combined  Table. 

5  E  Carlisle  Table. 

5  D  American  Experience  Table. 

.  4  A  Actuaries'  Combined  Table. 

5  D  American  Experience  Table. 

5  Dr.  Wigglesworth's  Table. 

.  6  American  Experience  Table. 

.          4  A  Actuaries'  Combined  Table. 

6  F  Carlisle  Table. 

4  C  American  Experience  Table. 
,           5  D  American  Experience  Table. 

5  D  American  Experience  Table. 
5  B  Actuaries'  Combined  Table. 

.  7  Actuaries'  Combined  Table. 

4  A  Actuaries'  Combined  Table. 

7  American  Experience  Table. 
>          4  A  Actuaries'  Combined  Table. 

,  5  D  American  Experience  Table. 


PART  III  — THE  PARTIES  215 

Rate  of      Table  of  Mortality  Used  and  Initial  Referring 
State  Interest  to  Table 

New  York 5  D  American  Experience  Table. 

North  Carolina 5  D  American  Experience  Table. 

North  Dakota 6  American  Experience  Table. 

Ohio 5  B  Actuaries'  Combined  Table. 

Oklahoma 5  D  American  Experience  Table. 

Oregon    4  A  Actuaries'  Combined  Table. 

Pennsylvania  6  F  Carlisle  Table. 

Rhode  Island 5  D  American  Experience  Table. 

South  Dakota 5  D  American  Experience  Table. 

Tennessee   6  F  Carlisle  Table. 

Texas    4  A  Actuaries'  Combined  Table. 

Utah    3l/z  C  American  Experience  Table. 

Vermont  3y2  C  American  Experience  Table. 

Virginia 6  F  Carlisle  Table. 

Washington   4  A  Actuaries'  Combined  Table. 

West  Virginia Table    prescribed   by   chap.    65, 

§  17,  W.  Va.  Code,  1913. 

Wisconsin 5  D  American  Experience  Table. 

Wyoming 

b.     COMPOUND  INTEREST  RULE. 

To  ascertain  the  value  of  the  principal  at  the  end  of 
any  given  number  of  years  compounded  annually  at  a 
given  rate  of  interest : 

Add  the  rate  of  interest  to  the  principal  and  raise  this 
sum  to  the  power  equal  to  the  number  of  years. 

Example:   What  is  the  value  of  $100  at  the  end  of  five 
years  compounded  annually  at  the  rate  of  5  per  cent! 
First  year  — $100  +  5=105. 
Second  year  — 105  X  105=110.25. 
Third  year  — 110.25  X  105=115.76. 
Fourth  year  — 115.76  X  105=121.55. 
Fifth  year  — 121.55  X  105=127.63. 

Answer : 

The  value  of  $100  at  the  end  of  five  years  compounded 
annually  at  the  rate  of  5  per  cent  is  $127.63. 


216  INHERITANCE  TAXATION 

c.  PRESENT  WORTH  RULE. 

To  find  the  present  worth  of  any  amount  due  at  any 
future  date  at  a  given  rate  of  interest: 

Divide  the  amount  by  itself  plus  the  accumulation  com- 
pounded annually  at  the  given  rate  of  interest. 

Example : 

To  find  the  present  worth  of  $100  payable  in  five  years 
at  5  per  cent  compounded  annually? 

We  know  from  the  previous  example  that  $100  com- 
pounded annually  at  5  per  cent  for  five  years  will  produce 
$127.63  at  the  end  of  that  period. 

Under  the  above  rule  $100  divided  by  $127.63  =  $78.43. 

Answer : 

The  present  worth  of  $100  payable  in  five  years  with 
interest  at  5  per  cent  is  $78.43. 

In  the  same  waj  the  present  worth  of  $100  payable  in 
one  year  with  interest  at  5  per  cent  is  $95.2381. 

d.  THE  LAW  OF  DISCOUNT. 

Employing  the  two  previous  rules  we  find  that  the 
present  worth  of  $100  payable  in  five  years  at  4  per  cent 
is  $81.11  while  at  6  per  cent  the  present  worth  is  $75.38. 

Obviously  the  higher  the  discount  the  lower  the  present 
worth,  the  lower  the  discount  the  higher  the  present  worth. 

It  is  important  to  bear  this  in  mind  as  it  is  a  common 
error  to  suppose  that  the  value  of  a  life  estate  may  be 
computed  by  multiplying  the  theoretical  expectation  of 
life  by  the  annual  income  —  which  is  an  egregious  error 
leading  to  absurd  results. 

For  example  the  expectation  of  life  of  a  widow  of  30,  is 
35  years.  If  she  has  a  life  estate  in  $100,000  her  annual 
income  at  5  per  cent  is  $5,000.  So  if  $5,000  be  multiplied 
by  the  expectation  of  life,  35  years,  the  result  is  $175,000 
as  the  value  of  a  life  interest  in  $100,000!  Wrong  and 


PART  III  — THE  PARTIES  217 

absurd  as  this  method  is  it  has  too  frequently  been 
employed  in  actual  practice  in  estimating  dower,  etc., 
through  sheer  ignorance, 

e.  LAW  OF  THE  CHANCE  OF  DEATH. 

But  the  present  worth  of  $100  payable  at  the  end  of  one 
year  and  annually  thereafter  is  affected  by  another  element 
when  the  beneficiary  is  a  life  tenant  or  annuitant.  He  may 
never  live  the  year  out  to  get  his  $100. 

His  chance  of  dying  before  it  is  payable  therefore 
becomes  another  element  in  ascertaining  its  present  worth 
and  here  we  must  use  the  mortality  table. 

And  here  we  are  met  with  another  error  almost  uni- 
versal. The  tables  give  the  average  expectation  of  life  as 
a  matter  of  information  but  this  average  expectation  has 
nothing  to  do  with  the  calculation  of  the  value  of  a  life 
estate  or  annuity. 

By  referring  to  the  appended  American  Experience 
table  of  mortality,  Table  Gr,  it  will  be  seen  that  it  starts 
with  100,000  persons  living  at  10  years  of  age  and  shows 
how  many  may  be  expected  to  die  within  the  year  and  how 
many  will  survive  to  the  age  of  11  and  so  on  until  95  years. 

f.  RULE  OF  THE  CHANCE  OF  DEATH  AS  AFFECTING  PKESENT 

WORTH. 

Assume  a  life  tenant  or  annuitant  is  70  years  of  age. 
The  American  Experience  table  of  mortality,  Table  G, 
shows  that  of  100,000  persons  living  at  the  age  of  ten 
38,569  will  survive  to  the  age  of  70;  that  2,391  will  die 
during  the  following  year ;  and  that  36,178  will  be  living  at 
the  age  of  71. 

The  chance  of  a  life  tenant  of  70  living  to  receive  his 
annual  income  at  the  end  of  the  year  when  he  will  be  71 
is  therefore  expressed  by  this  fraction. 

36178  —  living  at  71. 

38569  — living  at  70. 


218  INHERITANCE  TAXATION 

g.  RULE  FOR  CALCULATING  THE  PRESENT  VALUE  OF  LIFE 
ESTATES. 

As  we  have  seen  by  sub.  c,  the  present  worth  of  $100 
payable  at  the  end  of  one  year  is  $95.2381. 

But  to  a  life  tenant  of  70  this  present  worth  must  be 
reduced  by  the  chance  of  death  within  the  year.  His 
present  worth  of  $95.2381  must  be  reduced  by  the  fraction 

O/?-j  fjo 

of  which  represents  his  chance  of  living  to  get  the 

o8569 

money. 

-So,  $95.2381  divided  by  38569  =  $0.00249568  and  this 
multiplied  by  36178  gives  $90.287711  as  the  present  worth 
of  $100  payable  to  an  annuitant  of  70  at  the  end  of  the 
year. 

The  present  worth  of  the  installment  payable  the  annuit- 
ant of  70  at  the  end  of  two  years  is  worked  out  in  the 
same  way.  The  number  living  at  the  end  of  two  years  of 
persons  aged  70  is  33730  out  of  the  38569  and  the  chance 
that  the  annuitant  of  70  will  live  to  get  his  second  yearly 

33730 
payment   of  $100   is   expressed  by   the   fraction 

oooby 

The  present  worth  of  $100  payable  in  two  years  at  5  per 
cent  compound  interest  is  $90.7029.  Working  out  this  sum 
it  is  to  be  added  to  the  present  worth  of  one  year's  income ; 
and  so  on  to  the  end  of  the  table. 

It  is  needless  to  proceed  further.  The  principle  being 
understood  we  may  now  employ  the  tables  in  which  the 
whole  problem  is  worked  out  by  the  actuaries. 

By  referring  to  the  American  Experience  table,  Table  D, 
of  the  present  value  of  one  dollar  at  various  ages  calcu- 
lated as  above  we  find  that  the  present  value  of  an  income 
of  one  dollar  a  year  at  5  per  cent  to  an  annuitant  of  70 
years  of  age  is  $5.9802  and  of  an  income  of  $100  the  value 
would  be  $598.02. 


PART  III  — THE  PARTIES  219 

2.  Tables  for  Computing  the  Present  Worth  of  Annuities. 

The  first  table  of  mortality  still  in  use  was  published  by 
Dr.  Price  in  1771  as  the  "  experience  of  life  in  Northamp- 
ton." It  is  not  employed  in  making  inheritance  tax  cal- 
culations, however. 

In  1789  Dr.  Edward  Wigglesworth  of  Harvard  Uni- 
versity prepared  a  mortality  table  which  is  now  used  for 
inheritance  tax  purposes  only  in  the  state  of  Kentucky. 

In  1815  Dr.  Joshua  Milne  prepared  and  published  the 
Carlisle  tables  of  mortality. 

In  1838  a  committee  of  English  actuaries  prepared  a 
table  of  mortality  based  on  the  combined  experience  of 
seventeen  insurance  companies. 

In  1868  Sheppard  Homans  prepared  the  American 
Experience  table  based  upon  the  experience  of  the  Mutual 
Life  Insurance  Company. 

The  last  three  tables,  as  we  have  seen,  are  still  in 
general  use  in  the  different  states. 

THE  TABLES 

The  present  worth  of  an  annuity  of  one  dollar  at  any 
given  age  at  4  per  cent,  5  per  cent,  and  6  per  cent  is  shown 
by  the  following  tables  to  which  reference  is  made  by  the 
table  showing  what  standard  is  adopted  in  the  several 
states : 

Table  a.    Actuaries'  combined  table  at  4  per  cent. 

Table  b.    Actuaries'  combined  table  at  5  per  cent. 

Table  c.    American  experience  table  at  4  per  cent. 

Table  d.    American  experience  table  at  5  per  cent. 

Table  e.    Carlisle  table  at  5  per  cent. 

Table  f.    Carlisle  table  at  6  per  cent. 

Table  g.  American  experience  table  of  mortality  and 
expectation  of  life. 


220 


LFTHEBITANCE  TAXATION 


TABLE  A 


Annuity; 

Reversion, 

Annuity, 

Reversion, 

or  present 

or  present 

or  present 

or  present 

value  of  one 

value  of  one 

value  of  one 

value  of  one 

Mean 

dollar  due 

dollar  due 

dollar  due 

dollar  due 

Age 

redemption 
period 

at  the  end  of 
each  year 
during  the 

at  the  end  of 
the  year 
of  death 

Age 

Mean 
redemption 
period 

at  the  end  of 
each  year 
during  the 

at  the  end  of 
the  year 
of  death 

i  life  of  a 

of  a  person 

life  of  a 

of  a  person 

person  of 
specified  age 

of  specified 
age 

person  of 
specified  age 

of  specified 
age 

0... 

23.179 

$14.72829 

$0.39507 

50... 

18.113 

$12.47032 

$0.48191 

1... 

30.552 

17.30771 

0.29586 

51... 

17.527 

12.17919 

0.49311 

2... 

35.626 

18.69578 

0.24247 

52... 

r6.947 

11.88408 

0.50446 

3... 

37.572 

19.15901 

0.22465 

53... 

16.372 

11.58531 

0.51595 

4... 

38.702 

19.41226 

0.21491 

54... 

15.804 

11.28325 

0.52757 

5... 

39.352 

19.55301 

0.20950 

55... 

15.243 

10.99789 

0.53931 

6... 

39.654 

19.61731 

0.20703 

56... 

14.689 

10.66982 

0.55116 

7... 

39.691 

19.62502 

0.20673 

!  57... 

14.143 

10.35931 

0.56310 

8... 

39.625 

19.61097 

0.20727 

58... 

13.603 

10.04630 

0.57514 

9... 

39.264 

19.53413 

0.21022 

59... 

13.072 

9.73131 

0.58726 

10... 

38.891 

19.45359 

0.21332 

60... 

12.549 

9.41474 

0.59943 

11... 

38.507 

19.36943 

0.21656 

61... 

12.029 

9.09765 

0.61163 

12... 

38.113 

19.28184 

0.21993 

62... 

11.532 

8.78052 

0.623S2 

13... 

37.710 

19.19065 

0.22344 

63... 

11.039 

8.46412 

0.63600 

14... 

37.298 

19.09590 

0.22708 

64... 

10.557 

8.14888 

0.64812 

15... 

36.877 

18.99764 

0.23086 

65... 

10.088 

7.83552 

0.66017 

16... 

36.447 

18.89569 

0.23478 

66... 

9.630 

7.52476 

0.67212 

17... 

36.010 

18.79010 

0.23884 

67... 

9.185 

7.21699 

0.68396 

18... 

35.565 

18.68070 

0.24305 

68... 

8.753 

6.91298 

0.69565 

19... 

35.113 

18.56751 

0.24740 

69... 

8.333 

6.61301 

0.70719 

20... 

34.652 

18.45038 

0.25191 

70... 

7.926 

6.31716 

0.71857 

21... 

34.186 

18.32932 

0.25656 

71... 

7.532 

6.02612 

0.72976 

22... 

33.711 

18.20416 

0.26138 

72... 

7.151 

5.74003 

0.74077 

23... 

33.230 

18.07471 

0.26636 

73... 

6.782 

5.45928 

0.75157 

24... 

32.742 

17.94097 

0.27150 

74... 

6.425 

5.18402 

0.76215 

25... 

32.248 

17.80274 

0.27682 

76... 

6.081 

4.91463 

0.77251 

26... 

31.747 

17.65984 

0.28231 

76... 

5.749 

4.65125 

0.78264 

27... 

31.239 

17.51224 

0.28799 

77... 

5.428 

4.39383 

0.79254 

28... 

30.725 

17.35968 

0.29386 

78... 

5.119 

4.14286 

0.80220 

29... 

30.205 

17.20225 

0.29991 

79... 

4.823 

3.89858 

0.81150 

30... 

29.678 

17.03961 

0.30617 

80... 

4.537 

3.66071 

0.82074 

31... 

29.147 

16.87176 

0.31262 

81... 

4.262 

3.42900 

0.82965 

32... 

28.608 

16.69846 

0.31929 

82... 

3.995 

3.20258 

0.83836 

33... 

28.067 

16.51964 

0.32617 

83... 

3.737 

2.98024 

0.84691 

34... 

27,516 

16.33503 

0.33327 

84... 

3.484 

2.76106 

0.85534 

35... 

26.961 

16.14437 

0.34060 

85... 

3.236 

2.54366 

0.86371 

36... 

26.401 

15.94755 

0.34817 

86... 

2.992 

2.32795 

0.87200 

37... 

25.834 

15.74427 

0.35599 

87... 

2.752 

2.11384 

0.88024 

38... 

25.263 

15.53421 

0.36407 

88... 

2.517 

1.90115 

S.«8842 

39... 

24.685 

15.31722 

0.37241 

89... 

2.286 

1.69107 

0.89650 

40... 

24.101 

15.09295 

0.38104 

90... 

2.062 

1.48540 

0.90441 

41... 

23.511 

14.86102 

0.38996 

81... 

1.845 

1.28432 

O.S1214 

42... 

22.915 

14.62122 

0.39918 

92... 

1.637 

1.09024 

0.91961 

43... 

22.313 

14.37356 

0.40871 

93... 

1.442 

0.90647 

0.92667 

44... 

21.708 

14.11860 

0.41852 

94... 

1.263 

0.  73687 

0.9332O 

45... 

21.103 

13.85713 

0.42857 

95... 

1.103 

0.58435 

0.93906 

46... 

20.499 

13.58958 

0.43886 

96... 

0.975 

0.46182 

0.9437S 

47... 

19.896 

13.31698 

0.44935 

97... 

0.877 

0.36698 

0.94742 

48... 

19.298 

13.03942 

0.46002 

98... 

0.746 

0.24038 

0.95229 

49... 

18.703 

12.75716 

0.47088 

99... 

0.500 

0.00000 

0.96154 

PABT  III  — THE  PASTIES 


221 


TABLE  B 

ACTUARIES*  COMBINED  EXPERIENCE  TABLE 
AT  5  PER  CENT  PER  ANNUM. 


WITH  INTEREST 


AGE 

SI  annuity 
value 

Present 
worth  of 
remainder 

AGE 

SI   annuity 
value 

Present 
worth  of 
remainder 

10         

16.5559 

.164006 

55.  . 

10  0775 

472499 

11    

16.5020 

.  166572 

56  

9  8157 

484966 

12                  

16.4455 

.  169264 

57  

9  5505 

497596 

13  

16.3862 

.172087 

58  

9.2818 

510393 

14.. 

16.3241 

.175042 

59  

9.0100 

523335 

15  

16.2593 

.  178127 

60  

8.7355 

536407 

16. 

16.1917 

.  181349 

61                      

8  4592 

549563 

17.  . 

16.1212 

.  184707 

62  

8.1816 

562782 

18.. 

16.0476 

.188209 

63  

7.9033 

576032 

19.  . 

15.9711 

.  191854 

64    

7.6249 

589292 

20.. 

15.8913 

.  195651 

65  

7.3469 

602530 

21.  . 

15.8085 

.  199598 

66          

7.0700 

615716 

22.. 

15.7222 

.203703 

67  

6.7946 

.  628829 

23  

15.6325 

.207977 

68                    

6  5215 

641834 

24.  . 

15.5392 

.212418 

69  

6.2509 

654718 

25.  . 

15.4422 

.2170S7 

70                          

5  9831 

667473 

26.. 

15.3414 

.221842 

71    

5.7185 

680077 

27  

15  2364 

.226837 

72 

5  4574 

692504 

28.  . 

15.1274 

.232030 

73    

5.2003 

704748 

29  

15.0141 

.237425 

74  

4.9473 

.716795 

30.  . 

14.8963 

.243033 

75          

4.6988 

72S827 

31  

14.7740 

.248856 

76  

4.4550 

.740235 

32.  .  . 

14.6469 

.254907 

77                          .     . 

4  2160 

751619 

33  

14.5150 

.261191 

78 

3.9821 

.  762756 

34.  .  . 

14  3779 

.267719 

79 

3  7538 

773326 

35..  . 

14.2354 

.274506 

80                  

3.5308 

784247 

36.  . 

14  0873 

.281559 

81 

3  3129 

794621 

37.  . 

13.9333 

.288892 

82 

3  0993 

804793 

38  

13.7730 

.296522 

83                

2  8890 

814812 

39.  . 

13  .  6064 

.304458 

84 

2  6809 

824714 

40  

13.4329 

.312718 

85.                

2  4739 

So4575 

41.  . 

13.2523 

.321321 

86 

2  2678 

844389 

42  

13.0641 

.330280 

87                  .            ... 

2.0626 

854163 

43  

12  8684 

.339600 

88 

1  8580 

863905 

44  

12  6656 

.349258 

89 

1  6553 

873557 

45  

12  .  4562 

.359226 

90                      

1  4562 

883040 

46  

12  2408 

.369487 

91 

1  2609 

892335 

47  

12.0200 

.380002 

92 

1  0718 

9013i» 

48  

11  7939 

.  390767 

93                                 » 

8923 

9091  £ 

40  

11  5627 

.401775 

94 

72C2 

917797 

50  

11  3265 

413024 

95 

5765 

924999 

61  

11  0855 

.424502 

96 

-to^O 

930687 

52  

10  8398 

836200 

97 

3G28 

935102 

53  

10.5898 

448105 

98 

2381 

9110'9 

54  

10  3357 

460204 

222 


INHERITANCE  TAXATION 


TABLE  C. 

As  ISSUED  BY  TAX  COMMISSIONER  OF  MASSACHUSETTS. 

AMERICAN     EXPERIENCE     TABLES. —  DISCOUNTED    AT     4    PER 
CENT  COMPOUND  INTEREST. 

[Explanation:  To  find  the  present  worth  of  the  life  estate  of  a  person,  multiply  the  principal  of 
the  fund  by  the  figure  in  column  1  opposite  the  age  of  the  person  at  the  nearest  birthday.  Example: 
A,  who  is  26  yepre,  4  months  old  at  the  death  of  B,  is  given  by  B's  will  a  life  estate  in  property 
valued  at  $20,000.  Solution:  Opposite  age  26  in  column  1  is  .7143;  multiply  .7143  X  $20,000  = 
$14,286. 

To  find  the  present  worth  of  an  annuity  of  a  given  amount  for  life,  multiply  the  annuity  by  the 
figure  in  column  2  opposite  the  age  at  the  nearest  birthday  of  the  person  receiving  the  annuity. 
Example:  A,  who  is  25  years,  7  months  old  at  death  of  B,  is  given  by  B's  will  an  annuity  of  $80O 
for  life.  Solution:  Opposite  age  26  in  column  2  is  17.857;  multiply  17.857  X  $800  =  $14,285.60.] 


Age 

Column  1, 
life 
estates 

Column  2, 
an- 
nuities 

Age 

Column  1, 
life 
estates 

Column  2, 
an- 
nuities 

Age 

Column  1, 
life 
estates 

Column  2, 
an- 
nuities 

10... 

.7766 

19.414 

40.. 

.6177 

15.443 

70.. 

.2523 

6.307 

11... 

.7737 

19.343 

41.. 

.6088 

15.220 

71.. 

.2397 

5.993 

12... 

.7708 

19.269 

42.. 

.5995 

14.988 

72.. 

.2274 

5.685 

13... 

.7677 

19.192 

43.. 

.5900 

14.749 

73.. 

.2153 

5.383 

14... 

.7645 

19.112 

44.. 

.5801 

14.502 

74.. 

.2034 

5.086 

15... 

.7611 

19.028 

45.. 

.5699 

14.248 

75.. 

.1918 

4.794 

16... 

.7577 

18.942 

46.. 

.5594 

13.985 

76.. 

.1802 

4.505 

17... 

.7540 

18.851 

47.. 

.5486 

13.714 

77.. 

.1688 

4.219 

18... 

.7503 

18.757 

48.. 

.5374 

13.436 

78.. 

.1574 

3.936 

19... 

.7464 

18.660 

49.. 

.5260 

13.151 

79.. 

.1462 

3.656 

20... 

.7423 

18.558 

50.. 

.5143 

12.858 

80.. 

.1352 

3.380 

21... 

.7388 

18.452 

51.. 

.5002 

12.559 

81.. 

.1243 

3.108 

22... 

.7337 

18.342 

52.. 

.4902 

12.255 

82.. 

.1137 

2.842 

23... 

.7291 

18.228 

53.. 

.4776 

11.944 

83.. 

.1032 

2.580 

24... 

.7244 

18.109 

54.. 

.4651 

11.628 

84.. 

.0927 

2.318 

25... 

.7194 

17.985 

55.. 

.4523 

11.307 

85.. 

.0823 

2.057 

26... 

.7143 

17.857 

56.. 

.4393 

10.982 

86.. 

.0720 

1.799 

27... 

.7089 

17.723 

57.. 

.4261 

10.653 

87.. 

.0619 

1.548 

28... 

.7034- 

17.585 

58.. 

.4128 

10.321 

88.. 

.0524 

1.310 

29... 

.6976 

17.440 

59.. 

.3994 

9.985 

89.. 

.0434 

1.085 

30... 

.6916 

17.291 

60.. 

.3859 

9.648 

90.. 

.0347 

0.867 

31... 

.6854 

17.135 

61.. 

.3724 

9.309 

91.. 

.0262 

0.654 

32... 

.6789 

16.973 

62.. 

.3588 

8.969 

92.. 

.0181 

0.454 

33... 

.6722 

16.806 

63.. 

.3452 

8.630 

93.. 

.0116 

0.291 

34... 

.6653 

16.632 

64.. 

.3316 

8.290 

94.. 

.0055 

0.137 

35... 

.6580 

16  451 

65 

3181 

7  952 

95 

36... 

.6505 

16.263 

66.. 

.3046 

7.616 

37... 

.6428 

16.069 

67.. 

.2913 

7.282 

38... 

.6347 

15.868 

68.. 

.2781 

6.952 

39... 

.6264 

15.659 

69.. 

.2651 

6.627 

If  an  annuity  is  payable  semiannually,  add  .250  to  the  annuity  value  in  column  2. 
If  an  annuity  is  payable  quarterly,  add  .375  to  the  annuity  value  in  column  2. 
If  an  annuity  is  payable  monthly,  add  .458  to  the  annuity  value  in  column  2. 


PART  III  —  THE  PARTIES 


223 


TABLE  D. 

AMERICAN     EXPERIENCE     TABLE. —  DISCOUNTED    AT 
CENT    COMPOUND  INTEREST. 


5     PEE 


Age 

Expectation 
of  life  in 
years 

Present 
value  of  $1 
per  annum 

Age 

Expectation 
of  life  in 
years 

Present 
value  of  SI 
per  annum 

0 

41  45 

$12  818 

48..  . 

22  35 

$12  133 

1 

47  94 

14  922 

49.    . 

21   63 

11  901 

2 

50  16 

15.731 

50  

20  91 

11  662 

3 

50  91 

16  125 

51    

20  20 

11  416 

4 

51  23 

16  346 

52    

19  49 

11  164 

5 

51   13 

16  472 

53 

18  79 

10  905 

6 

50  83 

16  535 

54    

18  00 

10  640 

7- 

50  41 

16  561 

55 

17  40 

10  370 

g 

49  90 

16  560 

56   

16  72 

10  095 

.  9 

49.33 

16.540 

57  

16.05 

9  8145 

10  . 

48  72 

16  505 

58     

15  39 

9  5299 

11 

48  09 

16.461 

59  

14  74 

9  2413 

12 

47  45 

16  415 

60        

14   10 

8  9493 

13                   ... 

46  80 

16.366 

61  

13  47 

8  6545 

14 

46  16 

16  316 

62                        .    . 

12  86 

8  3574 

15                       .    . 

45  51 

16  263 

63    

12  26 

8  0588 

16 

44  85 

16  207 

64 

11  67 

7  7590 

17 

44   19 

16  149 

65          

11  10 

7  4588 

18         

43.53 

16.088 

66  

10.54 

7  1592 

19 

42  87 

16  024 

67     

10  00 

6  8607 

20           

42.20 

15  957 

68  

9  47 

6  5642 

21 

41  53 

15  886 

69 

8  97 

6  2705 

22                

40.85 

15  813 

70   

8  48 

5  9801 

23 

40  17 

15  736 

71 

8  00 

5  6942 

24                    

39  49 

15  655 

72       

7  55 

5  4129 

25  

38.81 

15.570 

73.  .  . 

7.11 

5.1359 

26 

38  12 

15  482 

74               

6  68 

4  8628 

27  

37.43 

15.389 

75  

6.27 

4.5926 

28 

36  73 

15  292 

76                       .    . 

5  88 

4  3248 

29     

36.03 

15.191 

77  

5  49 

4  0586 

30 

35  33 

15  084 

78 

5  11 

3  7939 

31       

34.63 

14  973 

79   

4  75 

3  5311 

32  

33.92 

14.857 

80  

4.39 

3.2702 

33       

33  21 

14  735 

81         

4  05 

3  0135 

34  

32.50 

14  .  608 

82  

3.71 

2.7606 

35             

31  78 

14  475 

83               

3  39 

2  5105 

36  

31.07 

14  .  336 

84   

3.08 

2.2607 

37           

30  35 

14  191 

85               

2  77 

2  0098 

38  

29.63 

14  039 

86     

2  47 

1.7606 

39               

28  90 

13  881 

87 

2  18 

1  5175 

40  

28.18 

13.716 

88     

1  91 

1  2861 

41                   

27  45 

13  544 

89 

1  66 

1  0670 

42  

26.72 

13  365 

90 

1  42 

0  85453 

43  

25.99 

13.179 

91  

1.19 

0.64497 

44  

25  27 

12  985 

92               

98 

0  44851 

45  

24.54 

12.783 

93   

.80 

0  .  28761 

46  

23.81 

12  574 

94            

.64 

0  13605 

47  

23.08 

12.357 

95  

.50 

224 


INHERITANCE  TAXATION 


TABLE  E. 

CARLISLE  TABLE  or  MORTALITY,  WITH  INTEREST  AT  5  PER 
CENT  PER  ANNUM. 


AGE 

$1  annuity 
value 

Present 
worth  of 
remainder 

AGE 

$1  annuity 
value 

Present 
worth  of 
remainder 

0  

12.083 

.37700 

52.  . 

11.154 

.42124 

1 

13  995 

.  28595 

53  

10  .  892 

.43371 

2  

14.983 

.23891 

54.  . 

10.624 

.44648 

3 

15  824 

.19886 

55.  .     

10.347 

.45967 

4  

16.271 

.  17737 

56  

10.063 

.47319 

5 

16  590 

16238 

57  .. 

9  771 

.48710 

6   

16.735 

.15548 

58  

9.478 

.50105 

7.  . 

16.790 

.  15286 

59  

9.199 

.51433 

8.  .  . 

16  .  786 

.  15305 

60  

8  940 

.  52667 

9  

16.742 

.15514 

61  

8.712 

.53752 

10  ... 

16  669 

.  15862 

62  

8.487 

.54824 

11  

16.581 

.16281 

63  

8.258 

.55914 

12 

16  494 

16695 

64.  . 

8.016 

.  57067 

13  

16.406 

.17114 

65  

7.765 

.58262 

14  

16.316 

.  17543 

66.  . 

7.503 

.59510 

15  

16.227 

.  17967 

67  

7.227 

.60824 

16.  . 

16.144 

.  18362 

68  

6.941 

.62186 

17.  .  . 

16  066 

18733 

69. 

6.643 

.63605 

18  

15.987 

.19110 

70  

6.336 

.65067 

19.  ... 

15  904 

19505 

71 

6.015 

.66593 

20  

15.817 

19919 

72.  .  . 

5.711 

.68043 

21  

15.726 

.20352 

73.  . 

5.435 

.69357 

22  

15  628 

20819 

74 

5.190 

.  70524 

23.  .  , 

15.525 

.21310 

75.  . 

4.989 

.71481 

24.  .  . 

15  417 

21824 

76 

4  792 

.72419 

25.  . 

15.303 

.22367 

77.  . 

4.609 

.73291 

26  

15.187 

.22919 

78  

4.422 

.74181 

27.  . 

15  065 

23500 

79 

4  210 

.75191 

28... 

14.942 

.24086 

80.. 

4.015 

.76119 

29  

14  827 

24633 

81 

3  799 

.77148 

30.  . 

14.723 

.25129 

82 

3.606 

.78067 

31  ...  . 

14  617 

25633 

83 

3  406 

.79019 

32.  . 

14.506 

.26162 

84 

3.211 

.  79948 

33  

14.387 

.26729 

85.  .. 

3.009 

.80910 

34.  .  . 

14.260 

27333 

86 

2  830 

.81762 

35  

14.127 

.27967 

87 

2.685 

.82452 

36  .  .  . 

13  987 

28633 

88 

2  597 

.82870 

37  

13.843 

.29319 

89 

2.495 

.83357 

38.  .  . 

13  695 

30024 

90 

2  339 

.84103 

39  

13  542 

30752 

91 

2.321 

.84186 

40  

13.390 

.31477 

92 

2.412 

.83752 

41  

13  245 

32167 

93 

2  518 

.83248 

42  

13.101 

32852 

94 

2.569 

.83005 

43  

12  957 

33538 

95 

2  596 

.82876 

44  

12.806 

34257 

96 

2  555 

.83071 

45.  .  . 

12  648 

35010 

97 

2  428 

83676 

46  

12  480 

35810 

98 

2  278 

.84391 

47  

12.301 

36662 

99  .  . 

2.045 

.85500 

48  

12  107 

37586 

100 

1  624 

.87505 

4»  

11  892 

38610 

101 

1  192 

.89562 

50  

11  660 

39714 

102 

0  753 

91653 

51  

11  410 

40905 

103 

0  317 

.93728 

PAST  III  —  THE  PARTIES 


225 


TABLE  F. 

CARLISLE  TABLE  OF  MORTALITY,  WITH  INTEREST  AT  6  PER 

CENT  PER  ANNUM. 


AGE 

f  1  Annuity 
value 

J  Present 
worth  of 
remainder 

AGE 

$1  Annuity 
value 

Present 
worth  of 
remainder 

0 

10.439 

.35251 

52.  . 

10.208 

36558 

1                      

12.078 

.25974 

53  

9.988 

37804 

2 

12.925 

.21179 

54  

9.761 

39089 

3 

13  652 

.17065 

55  

9  524 

40431 

4                                .    . 

14.042 

.14857 

56.  ... 

9.280 

41812 

5                    

14.325 

.13255 

57  

9.027 

43243 

6 

14.460 

.12491 

58.  . 

8  772 

44687 

7 

14.518 

.12163 

59  

8.529 

46062 

g 

14.526 

.12117 

60  

8.304 

47336 

9.  . 

14.500 

.12264 

61  

8.108 

48445 

10 

14.448 

.12558 

62  

7.913 

49549 

11 

14.384 

.12921 

63  

7.714 

50676 

12                                                                       4 

14.321 

.  13227 

64  

7.502 

51875 

13                            

14.257 

.13640 

65  

7.281 

53128 

14 

14.191 

.14013 

66  

7  049 

54440 

15 

14.126 

.14381 

67  

6.803 

55832 

16 

14.067 

.  14715 

68  

6.546 

57287 

17 

14.012 

.15026 

69.  . 

6.277 

58809 

18 

13.956 

.15343 

70.. 

5  998 

60389 

19 

13.897 

.15677 

71.  . 

5.704 

62053 

20 

13.835 

.16028 

72    

5  424 

63638 

21 

13.769 

.16402 

73.  . 

5.170 

65075 

22. 

13.697 

.16809 

74  

4.944 

66355 

23 

13.621 

.17240 

75  

4.760 

67396 

24 

13.541 

.  17692 

76.  . 

4.579 

.68421 

25 

13.456 

.  18174 

77  

4  410 

69377 

26      .. 

13.368 

.18672 

78.  .  . 

4.238 

.70351 

27 

13.275 

.19198 

79  .. 

4  040 

71472 

28   . 

13.182 

.  19725 

80  

3.858 

72502 

29 

13.096 

.20211 

81  

3  656 

73645 

80 

13.020 

.20642 

82  

3.474 

74675 

31 

12.942 

.21083 

83      . 

3  286 

75740 

32 

12.860 

.21547 

84  

3.102 

76781 

33 

12.771 

22051 

85 

2  909 

77874 

34 

12.675 

.22594 

86  

2  739 

78836 

35.  . 

12.573 

.23172 

87.  .. 

2.599 

79628 

36 

12.465 

.  23783 

88  

2.515 

80101 

37.  . 

12.354 

.24411 

89  

2.417 

80658 

38 

12.239 

.25062 

90    .  . 

2  266 

81513 

39    ..          .            .... 

12.120 

.25736 

91  

2.248 

81615 

40 

12.002 

26404 

92 

2  337 

81111 

41.          

11.890 

.27038 

93  

2  440 

80523 

42 

11  779 

27666 

94 

2  492 

80234 

43.  .    . 

11.668 

.28294 

95  

2.522 

80004 

44 

11.551 

28957 

96 

2  486 

80268 

45  

11.428 

.29653 

97  

2  368 

80936 

46.  . 

11.296 

.30400 

98  

2.227 

81734 

47  

11.154 

31204 

99    

2.004 

82996 

48.  . 

10.998 

.32087 

100  

1.596 

85306 

49 

10  823 

33077 

101      

1.175 

87689 

50.  . 

10  631 

.34164 

102  

0.744 

90128 

51.  .. 

10  422 

35347 

103 

0  314 

92562 

226 


INHERITANCE  TAXATION 


TABLE  G. 

AMERICAN  EXPERIENCE   TABLE   OF  MORTALITY. 


AGE 

Number 
living 

Number 
dying 
during 
year 

Expecta- 
tion 

AGE 

Number 
living 

Number 
dying 
during 
year 

Expecta- 
tion 

10 

100,000 

749 

48.72 

53... 

66,797 

1,091 

18  79 

11           

99,251 

746 

48.09 

54  

65,706 

1,143 

18  00 

12 

98,505 

743 

47.45 

55  

64,563 

1  199 

17  40 

13               

97,762 

740 

46.80 

56  

63,364 

1,260 

16  72 

14 

97  ,  022 

737 

46  16 

57... 

62,104 

1  325 

16  05 

15  

96,285 

735 

45.51 

58  

60,779 

1  ,  394 

15  39 

16 

95,550 

732 

44  85 

59  

59,385 

1  468 

14  74 

17 

94,818 

729 

44.19 

60  

57,917 

1,546 

14   10 

18 

94  089 

727 

43  53 

61  

56  371 

1  628 

13  47 

19 

93  ,  362 

725 

42.87 

62  

54  ,  743 

1,713 

12  86 

20  

92,637 

723 

42.20 

63  

53,030 

1,800 

12  26 

21 

91,914 

722 

41  53 

64  

51,230 

1  889 

11  67 

22.           .... 

91,192 

721 

40.85 

65  

49,341 

1,980 

11   10 

23 

90,471 

720 

40  17 

66  

47,361 

2  070 

10  54 

24 

89,751 

719 

39.49 

67  

45,291 

2,158 

10  00 

25 

89  032 

718 

38  81 

68  

43  133 

2  243 

9  47 

20 

88,314 

718 

38.12 

69... 

40,890 

2  321 

8  97 

27 

87  596 

718 

37  "43 

70  

38  569 

2  391 

8  48 

28 

86  ,  878 

718 

36  73 

71... 

36,178 

2  448 

8  00 

29..            

86,160 

719 

36.03 

72  

33  ,  730 

2,487 

7  55 

30 

85,441 

720 

35  33 

73... 

31,243 

2  505 

7  11 

31               ... 

84,721 

721 

34.63 

74... 

28,738 

2,501 

6  68 

32 

84  000 

723 

33  92 

75  

26  237 

2  476 

6  27 

33 

83  ,  277 

726 

33.21 

76... 

23,761 

2  431 

5  88 

34  

82  ,  551 

729 

32.50 

77.... 

21,330 

2,369 

5  49 

35 

81,822 

732 

31  78 

78... 

18,961 

2  291 

5  11 

36  

81,090 

737 

31.07 

79... 

16,670 

2,196 

4  75 

37 

80  353 

742 

30  35 

80  

14,474 

2  091 

4  39 

38 

79,611 

749 

29.63 

81  

12,383 

1  964 

4  05 

39 

78  862 

756 

28  90 

82.  . 

10  419 

1  816 

3  71 

40.. 

78,106 

765 

28  18 

83  

8,603 

1  648 

3  39 

41  

77,341 

774 

27.45 

84.  .. 

6,955 

1,470 

3  08 

42 

76  ,  567 

785 

26  72 

85  

5,485 

1  292 

2  77 

43  

75,782 

797 

25.99 

86... 

4,193 

1,114 

2  47 

44 

74  985 

812 

25  27 

87.. 

3  079 

933 

2  18 

45.. 

74,173 

828 

24  54 

88  

2,146 

744 

1  91 

46  

73,345 

848 

23.81 

89  

1,402 

555 

1  66 

47.. 

72  497 

870 

23  08 

90  

847 

385 

1  42 

48  

71,627 

896 

22  35 

91  

462 

246 

1   19 

49 

70  731 

927 

21  63 

92.. 

216 

137 

98 

50  

69,804 

962 

20  91 

93  

79 

58 

80 

61 

68  842 

1  001 

20  20 

94 

21 

18 

64 

52  

67,841 

1,044 

19  49 

95  

3 

3 

50 

PAET  III  — THE  PARTIES  227 

3.  How  to  Use  the  Tables. 

a.  THE  NECESSARY  FACTORS. 

First  ascertain  the  rate  of  interest  to  be  employed  and 
the  mortality  table  to  be  used. 

The  tables  give  the  present  value  of  an  income  of  $1.00 
per  annum  at  the  various  ages,  based  on  their  expectation 
of  life  from  year  to  year. 

To  find  the  present  value  of  the  annual  income  from  a 
specified  principal  sum  during  the  lifetime  of  a  person, 
find  the  annual  income  on  the  basis  of  the  given  rate  of 
interest  and  then  multiply  this  annual  income  by  the  value 
of  one  dollar  at  the  given  age  as  shown  in  the  table. 

To  find  the  value  of  dower  make  the  same  calculation 
and  divide  it  by  three. 

To  find  the  remainder  deduct  the  life  estate  value  from 
the  principal  sum. 

b.  ASCERTAINING  THE  VALUE. 

A  New  York  testator  dying  in  January,  1917,  leaves  a 
net  estate  of  $300,000  to  his  widow,  aged  30,  for  life ;  on 
her  death  remainder  to  their  only  child,  then  a  minor. 

By  reference  to  the  table  of  states  we  find  that  New  York 
uses  the  American  experience  table  on  the  basis  of  5  per 
cent,  and  by  reference  to  that  table  —  Table  D  —  we  find 
that  the  present  worth  of  an  annuity  of  $1.00  at  5  per  cent 
to  a  life  tenant  30  years  of  age  is  $15.08425. 

The  annual  income  of  $300,000  at  5  per  cent  is  $15,000 
which  multiplied  by  the  present  worth  of  the  annuity  of 
$1.00  gives  $226,263.75  as  the  value  of  the  life  estate  and 
subtracting  from  the  principal  sum  $300,000,  the  value 
of  the  remainder  is  $73,736.25. 

4.  Application  to  the  Problems  of  Inheritance  Taxation. 
Taking    the    above    example    of    a    life    estate    and    a 

remainder  created  by  the  will  of  a  New  York  decedent  in 


228  INHERITANCE  TAXATION 

favor  of  his  widow  of  30  and  his  minor  child  in  $300,000 
net  estate,  the  date  of  death  being  January,  1917: 
Assume : . 

a.  That    $100,000    is    personal    property    located    in 

Arizona. 

b.  That   $100,000   is   personal   property   invested   in 

Idaho. 

c.  That    $100,000    is    personal    property    located    in 

Tennessee.    What  inheritance  taxes  must  be  paid 
in  those  states? 

d.  What  tax  must  be  paid  in  the  state  of  New  York? 

e.  What  tax  must  be  paid  the  United  States  govern- 

ment and  in  what  proportions? 

f.  What    is    the    total    tax    due   by   life    tenant    and 

remainderman    less    any   possible    discounts    for 
prompt  payment? 

a.  THE  VALUE  AND  TAX  IN  ARIZONA. 

As  to  the  $100,000  invested  in  Arizona  we  find  by  refer- 
ence to  the  table  of  states  that  Arizona  uses  the  Combined 
Actuaries'  table  on  the  basis  of  4%  (Table  A.)  The  annual 
income  on  $100,000  at  4%  is  $4,000.  By  reference  to  Table 
A  we  find  that  the  annuity  value  of  $1.00  at  the  age  of  30 
is  $17.040.  This  multiplied  by  $4,000  gives  $68,160  as  the 
value  of  the  life  estate  and  subtraction  gives  the  value  of 
the  remainder  as  $31,840. 

By  reference  to  the  table  of  rates  and  exemptions  given 
in  the  abstract  of  the  Arizona  statute  (see  appendix)  we 
find  that  the  life  tenant  pays  1%  over  an  exemption  of 
$5,000  giving  the  tax  on  the  life  estate  $631.60.  The 
remainder  pays  the  same  rate  less  the  same  exemption  or 
$268.40. 

b.  THE  VALUE  AND  TAX  IN  IDAHO. 

As  to  the  $100,000  invested  in  Idaho  we  find  that  state 
uses  the  Actuaries'  combined  table  on  the  basis  of  5%  — 
Table  B.  And  by  reference  to  that  table  we  find  the 


PART  III  —  THE  PARTIES  229 

annuity  value  of  $1.00  at  the  age  of  30  to  be  $14.8963.  The 
income  at  the  rate  of  5%  is  $5,000  which  multiplied  by  the 
annuity  value  of  $1.00  at  30  years  gives  $74,481.50  as  the 
value  of  the  life  estate  and  the  subtraction  shows  $25,518.50 
as  the  value  of  the  remainder. 

By  the  reference  to  the  table  of  rates  and  exemptions  in 
the  abstract  of  the  statute  of  Idaho  (see  appendix)  we 
find  that  the  widow  and  minor  child  each  have  an  exemp- 
tion of  $10,000.  As  to  the  life  estate  the  tax  on  the  first 
$25,000  of  the  excess  is  1%  or  $250,  leaving  $25,000  to  be 
taxed  at  iy2%  or  $375  and  14,481.50  to  be  taxed  at  2% 
or  $289.63,  a  total  tax  to  the  life  tenant  of  $914.63. 

As  to  the  remainder  of  $25,518.50  the  exemption  of 
$10,000  leaves  $15,518.50  taxable  at  1%  or  $155.19  as  the 
tax  against  the  remainder. 

c.  THE  VALUE  AND  TAX  IN  TENNESSEE. 

As  to  the  $100,000  invested  in  Tennessee  we  find  that 
this  state  uses  the  Carlisle  table  on  the  basis  of  6%  — 
Table  F.  Referring  to  table  F  we  find  that  an  annuity  of 
$1.00  is  valued  at  $13.020;  at  6%  the  annual  income  is 
$6,000,  which  multiplied  by  the  present  worth  of  an  annual 
income  of  $1.00  gives  $78,120  as  the  value  of  the  life  estate 
and  by  subtraction  the  remainder  value  is  $21,880. 

By  reference  to  the  table  of  rates  and  exemptions  in  the 
abstract  of  the  Tennessee  statute  (see  appendix),  we  find 
that  the  exemption  to  each  is  $5,000.  The  life  tenant's 
interest  less  $5,000  is  $73,120  of  which  $20,000  pays  a  tax 
at  1%  or  $200  and  the  balance  $53,120  pays  a  tax  of  V/^% 
or  $664.00,  a  total  of  $864  as  against  the  life  tenant.  The 
remainder,  less  the  $5,000  exemption,  pays  a  tax  of  \% 
on  $16,880  or  $168.80. 

d.  THE  TAX  DUE  THE  STATE  OF  NEW  YORK. 

The  value  of  the  life  estate  in  New  York  as  we  have  seen 
by  the  first  illustration  is  $226,263.75  and  of  the  remainder 
$73,736.25. 


230  INHERITANCE  TAXATION 

As  death  occurred  in  January,  1917,  the  rates  and 
exemptions  prescribed  by  the  statute  of  1916  are  in  force. 

This  gives  the  widow  and  child  each  an  exemption  of 
$5,000.  The  life  estate  subject  to  tax  is  valued  at  $221,- 
263.75  and  it  pays  these  rates : 

On  the  first  $25,000  00  \%  or  $250  00 

On  the  next           75,000  00  2  %  or  1,500  00 

On  the  next  100,000  00  $%  or  3,000  00 

On  the  balance     21,263  75  4%  or  850  55 


$5,600  55 

The  remainder  less  the  exemption  is  $69,736.25  on  which 
the  tax  is  $1,044.73. 

e.     THE  FEDERAL  TAX  AND  VALUATION. 

The  inheritance  tax  levied  by  the  United  States  govern- 
ment took  effect  September  8,  1916,  and  the  amendment  of 
March  3,  1917,  increased  the  rates  by  fifty  per  cent.  The 
assumed  testator  died  in  January,  1917,  and  his  estate  is 
therefore  taxable  under  the  1916  statute  and  not  under  the 
1917  amendment. 

The  entire  net  estate  is  $300,000  and  an  exemption  of 

$50,000  is  allowed,  making  the  taxable   estate  $250,000. 

The  State  taxes  are  not  deducted  by  the  ruling  of  the 

treasury  department  of  Sept.,  1917  —  reversing  its  former 

rule.    The  net  estate  is  therefore  $250,000  taxed  as  follows : 

On  the  first          $50,000  1%  or        $500 

On  the  next          100,000  2%  or       2,000 

On  the  balance     100,000  3%  or       3,000 


Total   $5,500 

The   Federal    Government,   under   the   present    statute 
does  not  concern  itself  with  the   apportionment   of  the 


PART  III  — THE  PARTIES  231 

burden  among  the  beneficiaries.  The  entire  tax  must  be 
paid  out  of  the  residuary  estate.  In  the  present  case  it 
makes  no  difference,  but  if  these  were  specific  legatees  in 
the  supposed  case  they  would  escape  payment  of  the  tax 
altogether. 

f.     THE  TOTAL  TAX  AND  THE  DISCOUNTS. 

We  now  have  the  problem  of  the  total  tax  and  the  dis- 
counts.   The  previous  work  shows  the  taxes  as  follows : 

Remaindermen  Life  Tenant 

Arizona  $268  20  $631  20 

Idaho 155  19  914  65 

Tennessee  168  80  864  00 

New  York 1,044  73  5,600  55 


Total  $1,636  92  $8,010  35 

1,636  92 


Total  State  Taxes $9,647  27 

Federal  Tax 5,500  00 


Grand  Total $15,147  27 

This  total,  however,  may  be  somewhat  reduced  by  the 
discounts  allowed  by  the  several  statutes  for  the  prompt 
payment  of  the  tax. 

By  referring  to  the  table  of  interest  and  discount  of  taxes 
or  to  the  statutes  in  the  appendix  it  will  appear  that  Ten- 
nessee allows  5%  discount  if  paid  within  three  months;  the 
other  three  states  5%  discount  if  paid  within  six  months, 
and  the  United  States  5%  per  annum  for  the  time  pay- 
ment anticipates  one  year.  If  these  taxes  are  all  paid 
immediately  there  will  be  a  discount  of  5%  on  all  and  a 
total  saving  of  $757.36. 

The   total  tax  due   the   four   states   and   the   Federal 


232 

government  less  the  possible  discount  for  prompt  payment 
is  therefore  $14,389.91. 

These  examples  and  illustrations  should  enable  the 
average  attorney  to  work  out  the  more  simple  problems  of 
inheritance  taxation. 

As  to  successive  life  estates  and  estates  for  joint  lives 
the  calculations  require  the  use  of  other  tables  and  higher 
mathematics  and  should  be  referred  to  an  actuary  or  expert 
mathematician. 


PART  IV— THE  PROPERTY 


A.  As  to  Situs. 

1.  R«al  Estate. 

a.  Not  Taxable  in  Foreign  Jurisdiction. 

b.  No  Equitable  Conversion. 

c.  Land  Contracts. 

d.  Leases. 

2.  Tangibles. 

3.  Mortgages,  Bonds  and  Commercial  Paper. 

a.  Situs  at  Domicile  of  Owner. 

b.  Where  the  Land  Lies. 

c.  Where  Physically  Present. 

d.  "  Transient "  or  "  Habitual  "  Presence. 

4.  Corporate  Stock. 

a.  Of  Domestic  Corporations. 

b.  Foreign  Corporations  Owning  Property  Within  the  State. 

c.  Foreign   Corporations  Not   Owning   Property   Within   the 

State. 

d.  Apportionment  of  Corporate  Property. 

e.  Pledged  Securities. 

5.  Other  Choses  in  Action. 

a.  Bank  Deposits. 

b.  Debts. 

c.  Life  Insurance. 

d.  Seat  in  the  Stock  Exchange. 

e.  Interest  in  the  Estate  of  Another. 

f.  Partnership  Interest. 

B.  As  to  Value. 

1.  Where  the  Value  at  Death  Cannot  be  Ascertained. 

2.  Real  Estate. 

3.  Tangibles. 

a.  Pictures. 

b.  Furniture. 

c.  Jewelry. 

4.  Stocks. 

a.  Active  Securities. 

b.  Inactive  Securities. 

c.  Closely  Held  Stocks. 

5.  Bonds. 

[233] 


234  INHERITANCE  TAXATION 

B.  As  to  Value  —  Continued. 

6.  Pledged  Securities. 

a.  As  to  the  Pledgor. 

b.  As  to  the  Pledgee. 

7.  Partnerships. 

8.  Good  Will. 

a.  A  Taxable  Asset. 

b.  Rules  for  Computation. 

c.  Number  of  Years'  Purchase. 

d.  When  the  Profits  are  Speculative. 

e.  When  no  Profits  are  Shown. 

C.  Deductions. 

1.  Mortgages. 

2.  Debts. 

a.  Liability  on  Mortgage  Bond. 

b.  Repairs  to  Real  Estate. 
e.  Debts  Paid  by  Will. 

d.  Doubtful  Claims. 

3.  Funeral  and  Burial  Expenses. 

4.  Administration  Expenses  and  Counsel  Fees. 

5.  Discount  on  Legacy. 

6.  Expenses  of  Litigation. 

a.  Where  to  Conserve  the  Estate. 

b.  Disputes  Among  the  Beneficiaries. 

7.  Taxes. 

a.  Other  Inheritance  Taxes. 

b.  General  Taxes  and  Assessments. 

8.  Commissions. 

a.  To  Executors. 

b.  To  Trustees. 

c.  On  Sale  of  Real  Estate. 

9.  Family  Allowance. 

10.  Pro  Rating  Debts. 

a.  When  the  Local  Debts  Exceed  the  Local  Assets. 

b.  When  there  are  Local  Assets  and  no  Local  Debts. 

c.  When  Local  Debts  are  Paid  with  Foreign  Assets. 

d.  When  there  are  both  Local  and  Foreign  Debts  and  Assets. 

e.  As  to  Partnerships. 

11.  Marshaling  Assets  to  Reduce  Tax. 

a.  When  the  Executor  can  do  so. 

b.  When  he  cannot. 


PART  IV  — THE  PROPERTY  235 


PART  IV— THE  PROPERTY 


This  is  not  limited  to  such  property  as  is  defined  as 
taxable  under  the  general  tax  laws  of  the  state  but  extends 
to  all  the  assets  of  the  decedent  of  whatsoever  name  or 
nature. 

Matter  of  Knoedler,  140  N.  Y.  377;  35  N.  E.  601. 
Hinds  v.  Wilcox,  22  Mont.  4;  55  Pac.  355. 

The  court  said  in  the  Knoedler  case:  "  The  argument 
is  made  that  it  is  only  property  which  is  liable  to  taxation 
under  the  General  Tax  Law  of  the  State  which  can  be 
taxed  under  the  act  relating  to  taxable  transfers, 
The  Taxable  Transfer  Law  has  no  reference  or  relation 
to  the  general  law.  The  two  acts  are  not  in  pari  materia. 
While  the  object  of  both  is  to  raise  revenue  for  the  sup- 
port of  the  government,  they  have  nothing  else  in  com- 
mon. Nearly  sixty  years  intervened  between  the  passage 
of  the  earlier  and  the  later  statute,  and  the  latter  was 
enacted  under  different  conditions  from  the  former.  It 
taxes  the  right  of  succession  to  property,  and  measures 
the  tax  in  the  method  specifically  prescribed.  All  prop- 
erty having  an  appraisable  value  must  be  considered, 
whether  it  is  such  as  might  be  taxed  under  the  general 
law  or  not.  Many  kinds  of  property  might  be  enumerated 
which  are  not  assessable  under  the  general  law,  but  which 
are  appraisable  under  the  Collateral  Inheritance  Act." 

"  The  word  '  property  '  is  broad  enough  to  include 
everything  which  one  person  can  own  and  transfer  to 
another." 

Hamilton  v.  Rathbone,  175  U.  S.  414. 


236  INHERITANCE  TAXATION 

Inheritance  taxes  embrace  every  kind  of  interest  in  the 
estate  of  a  decedent. 

Attorney-General  V.  Pierce,  59  N.  C.  240. 
Commonwealth  v.  Smith,  20  Pa.  St.  100. 

A.— AS  TO  SITUS. 

As  we  have  seen,  the  law  of  Inheritance  Taxation  has 
been  complicated  by  the  conflicting  theories  as  to  the  situs 
of  personal  property,  the  same  state  persisting  in  taxing 
the  intangibles  of  resident  decedents  wherever  located 
and,  at  the  same  time,  the  intangibles  property  of  non- 
residents when  physically  present  within  the  state.  Of 
course  the  very  fact  that  it  is  "  physically  present  "  any- 
where conflicts  the  notion  that  any  property  is  "  intan- 
gible." 

At  all  events  the  actual  and  theoretical  situs  of  prop- 
erty subject  to  inheritance  taxation  presents  some  of  the 
most  perplexing  questions  in  the  entire  scope  of  the 
subject.  It  is  further  complicated  by  the  frequent  amend- 
ment of  the  statutes  so  that  one  decision  which  apparently 
conflicts  with  another  in  fact  construes  a  statute  that  has 
since  been  amended  by  the  legislature. 

The  New  York  and  Massachusetts  decisions  are  of  high 
authority  in  other  states  though  those  jurisdictions  no 
longer  tax  the  intangibles  of  non-residents  —  a  fact  that 
should  constantly  be  borne  in  mind. 

1.  Real  Estate. 

a.     NOT  TAXABLE  IN  FOREIGN  JURISDICTION. 

The  authorities  are  all  agreed  that  the  real  estate  of 
a  resident  decedent  located  in  a  foreign  jurisdiction  is 
not  taxable  and  a  fortiori  as  to  a  non-resident. 

Matter  of  Swift,  137  N.  Y.  77;  32  N.  E.  1096. 
Marr's  Estate,  240  Pa.  St.  38 ;  87  A.  621. 
Succession  of  Westfeld,  122  La.  836;  48  S.  281. 
People  v.  Kellogg,  268  111.  489;  109  N.  E.  304. 
Gallup's  Appeal,  76  Conn.  617;  57  A.  699. 
Lorillard  v.  People,  6  Dem.  268. 


PART  IV  — THE  PROPERTY  237 

b.     No  EQUITABLE  CONVERSION. 

The  cases  are  also  substantially  unanimous  in  holding 
that  even  though  the  testator  directs  the  sale  of  foreign 
real  estate  and  the  payment  of  money  legacies  out  of  the 
proceeds  the  doctrine  of  equitable  conversion  is  not  applic- 
able in  the  law  of  inheritance  taxation. 

Connell  V.  Crosby,  210  111.  380;  71  N.  E.  350. 
McCurdy  v.  McCurdy,  197  Mass.  248;  83  N.  E.  881. 
Matter  of  Swift,  137  N.  Y.  77;  32  N.  E.  1096. 
Matter  of  Offerman,  25  App.  Div.  94;  48  Supp.  993. 
Matter  of  Hallock,  42  Misc.  473;  87  Supp.  255. 
Matter  of  Button,  3  App.  Div.  208;  38  Supp.  277;  aff.  149  N.  Y.  618; 
44  N.  E.  1128. 

In  the  Swift  case,  supra  the  court  said: 

"  Nor  is  the  argument  available  that,  by  the  power  of 
sale  conferred  upon  the  executors,  there  was  an  equitable 
conversion  worked  of  the  lands  in  New  Jersey,  as  of  the 
time  of  the  testator's  death,  and,  hence,  that  the  property 
sought  to  be  reached  by  the  tax,  in  the  eye  of  the  law, 
existed  as  cash  in  this  state  in  the  executor's  hands,  at 
the  moment  of  the  testator's  death." 

The  courts  of  Pennsylvania  alone  take  a  contrary  view. 
In  that  state,  where  there  is  a  direction  to  sell  in  the  will, 
it  is  held  that  there  is  a  conversion  and  therefore  foreign 
real  estate  is  subject  to  the  tax. 

Handley's  Estate,  181  Pa.  St.  339 ;  37  A.  587. 
In  re  Dalrymple,  215  Pa.  St.  367 ;  64  A.  554. 
In  re  Williamson,  153  Pa.  St.  508;  26  A.  246. 
Miller  v.  Commonwealth,  111  Pa.  St.  321;  2  A.  492. 
In  re  Vanuxem,  212  Pa.  St.  315;  6  A.  876. 

In  McCurdy  v.  McCurdy,  197  Mass.  248;  83  N.  E.  881, 
the  court  stated  the  doctrine  thus : 

"  The  Attorney-General,  in  behalf  of  the  treasurer  and 
receiver-general  of  the  Commonwealth,  contends  that  the 
doctrine  of  equitable  conversion  and  exoneration  should 
be  applied  to  relieve  the  land  from  the  encumbrance  of 


238  INHERITANCE  TAXATION 

the  mortgage,  and  that  the  executors  should  bring  the  pro- 
ceeds of  personal  estate  from  the  place  of  domiciliary 
administration  in  New  Jersey  and  apply  it  to  the  payment 
of  the  debt  here,  so  as  to  leave  the  land,  free  from  the 
encumbrance,  within  the  jurisdiction  of  the  Common- 
wealth. The  answer  to  this  contention  is,  first,  that  the 
rights  and  obligations  of  all  parties  in  regard  to  the  pay- 
ment of  a  tax  of  this  kind  are  to  be  determined  as  of  the 
time  of  the  death  of  the  decedent.  This  has  been  settled 
by  our  decisions.  Hooper  v.  Bradford,  178  Mass.  95;  59 
N.  E.  678;  Howe  v.  Howe,  179  Mass.  546;  61  N.  E.  225; 
Kingsbury  v.  Cliapin,  196  Mass.  533;  82  N.  E.  700. 
Secondly,  the  law  of  equitable  conversion  ought  not  to 
be  invoked  merely  to  subject  property  to  taxation,  especi- 
ally when  the  question  is  one  of  jurisdiction  between  dif- 
ferent States.  In  distance  v.  Bradsliaw,  4  Hare,  315,  325, 
it  was  said  that  ' '  equity  would  not  alter  the  nature  of  the 
property  for  the  purpose  only  of  subjecting  it  to  fiscal 
claims  to  which  at  law  it  was  not  liable  in  its  existing 
state."  In  Matter  of  Offerman,  25  App.  Div.  (N.  Y.)  94; 
48  Supp.  993,  the  court  says  that  equitable  conversion 
should  not  be  invoked  merely  for  the  purpose  of  subjecting 
the  property  to  taxation.  To  the  same  effect  is  Matter  of 
Button,  3  App.  Div.  (N.  Y.)  208;  38  Supp.  277;  affirmed  in 
149  N.  Y.  618.  In  Pennsylvania  a  different  rule  is  estab- 
lished. Handlers  Estate,  181  Penn.  St.  339;  37  A.  587." 

c.    LAND  CONTRACTS. 

Money  due  on  land  contracts  to  pay  a  resident  deced- 
ent's estate  the  purchase  price  of  land  in  a  foreign  juris- 
diction is  not  taxable. 

Matter  of  Wolcott,  94  Misc.  73;  157  Supp.  268. 

And,  conversely,  land  contracts  to  sell  lands  in  Michi- 
gan owned  by  a  non-resident  decedent,  are  taxable  in 
Michigan. 

Ee  Stanton's  Estate,  142  Mich.  491;  105  N.  W.  1122. 


PART  IV  — THE  PROPERTY  239 

On  the  other  hand  it  has  been  held  in  Nebraska  that 
money  due  on  a  land  contract  is  a  debt  with  its  situs  at 
the  domicile  of  the  owner. 

Dodge  County  \.  Burns,  131  N.  W.  922. 

So,  where  there  was  a  contract  to  sell  real  estate  and 
the  deed  was  executed  by  the  decedent  but  not  delivered 
until  the  day  after  death  and  the  property  was  located 
out  of  the  state  it  was  held  that  there  was  no  conversion 
and  the  proceeds  of  the  sale  were  not  taxable  at  domicile. 
Matter  of  Baker,  67  Misc.  630 ;  124  Supp.  827. 

Of  a  nature  similar  to  land  contracts  are  shares  in  an 
unincorporated  real  estate  trust  where  real  estate  is  in 
Massachusetts ;  held,  taxable  against  a  non-resident  holder 
as  property  within  the  state. 

The  court  said:  "  It  is  not  necessary  to  analyze  with 
greater  nicety  the  precise  character  of  the  property  inter- 
est of  a  shareholder  under  each  of  the  trusts.  It  is  true 
of  all  of  them  that  their  rights  are  equitable  interests  in 
tangible  property  within  this  Commonwealth.  While  the 
legal  title  is  in  the  trustees,  their  ownership  is  fiduciary, 
and  the  certificate  holders  are  the  ultimate  proprietors  of 
the  property,  which  is  held  and  managed  for  their  benefit, 
and  which  must  be  divided  among  them  at  the  termination 
of  the  trust.  Their  rights  constitute  not  choses  in  action 
but  a  substantial  property  right.  In  this  respect  the  case 
is  indistinguishable  in  principle  from  shareholders  in  a 
domestic  corporation.  Greves  v.  Shmv,  173  Mass.  205; 
53  N.  E.  372.  The  fact  that  the  certificates  themselves 
were  not  within  the  Commonwealth  is  an  immaterial  cir- 
cumstance. ' ' 

Pedbody  v.  Treasurer,  215  Mass.  129 ;  102  N.  E.  435. 


240  INHERITANCE  TAXATION 

d.    LEASES. 

Obviously  a  lease  may  be  an  asset  or  a  liability,  a  debt 
or  property.  If  it  is  a  perpetual  lease,  reserving  rent, 
it  is  held  to  be  real  property. 

Matter  of  Vivianti,  138  App.  Div.  281;  122  Supp.  954;  146  App.  Div. 
942;  131  Supp.  1148;  aff.  206  N.  Y.  656. 

The  leasehold  interest  was  in  Japan  and  the  court  said, 
in  holding  it  not  taxable  as  against  a  resident  decedent 
in  New  York: 

"  It  would  seem  clear,  upon  all  the  testimony,  that  the 
premises  in  question  were  held  by  decedent  under  a  per- 
petual lease,  reserving  rent,  and  that  under  the  law  of 
Japan,  as  well  as  under  our  own,  the  interest  of  the 
decedent  therein  was  real  property  and  not  personal," 
and  the  transfer  thereof  not  taxable. 

On  the  other  hand  a  lease  for  twenty-one  years  from 
Columbia  College  of  property  in  New  York  was  held  per- 
sonal property. 

Matter   of  Althause,  63  App.   Div.   252;   71   Supp.   445;    aff.   168 
N.  Y.  670;  61  N.  E.  1127. 

The  fact  that  the  lease  is  physically  out  of  the  state  does 
not  change  its  situs. 

'"  The  fact  that  the  instrument  of  lease  was  located  in 
New  Jersey  is  immaterial,  as  it  was  merely  evidence  of 
the  decedent's  interest  in  the  premises  situate  in  this 
county.  A  lease  is  not  an  indebtedness  existing  in  favor 
of  either  of  the  parties  thereto,  but  evidence  of  a  con- 
tract or  agreement  by  which  each  of  the  parties  became 
entitled  to  certain  rights.  Like  a  certificate  of  stock  in 
a  corporation,  it  has  no  legal  situs  apart  from  the  property 
to  which  it  refers.  The  decedent's  interest  in  the  leasehold 
premises  therefore  constituted  property  in  this  state 
(Matter  of  Whiting,  150  N.  Y.  27;  44  N.  E.  715;  Matter 
Clinch,  180  N.  Y.  300;  73  N.  E.  35)." 

Matter  of  Bosenbaum,  N.  Y.  L.  J.,  Aug.  7,  1914. 


PART  IV  —  THE  PROPERTY  241 

2.  Tangibles. 

Cattle  in  another  state  are  held  not  taxable  as  against  a 
resident  decedent  in  Iowa  since  they  do  not  follow  the 
domicile  of  the  owner,  even  though  they  have  been  sold 
and  the  proceeds  brought  into  the  state  for  distribution. 
This  is  not  the  general  doctrine. 

Weaver  v.  State,  110  la.  328;  81  N.  W.  603. 

The  home  port  of  a  vessel  engaged  in  interstate  com- 
merce is  its  situs  for  purposes  of  taxation. 

Ayer  &  Lord  Co.  v.  Kentucky,  202  U.  S.  409;  26  S.  Ct.  Rep.  679. 

And  a  vessel  so  located  is  "  tangible." 
People  v.  State  Tax  Commission,  174  App.  Div.  320 ;  160  Supp.  854. 

So  a  yacht  of  a  nonresident  if  its  home  port  is  within 
the  state  is  tangible. 

Matter  of  Curry,  N.  Y.  L.  J.,  May  27,  1914. 

Antique  furniture  of  a  nonresident  is  taxable  when  in 
New  York. 

Matter  of  Can  field,  96  Misc.  119;  159  Supp.  735. 

The  New  York  Statute,  while  it  now  taxes  only  the 
tangible  personal  property  of  non-residents,  taxed  the 
tangibles  of  its  own  residents  in  a  foreign  jurisdiction, 
prior  to  1911,  so  when  machinery  in  a  factory  in  New 
Jersey  was  not  so  attached  to  the  building  that  it  could 
not  be  removed  without  injury  to  the  property  it  was  held 
personal  property  and  taxable  as  part  of  the  estate  of  a 
New  York  decedent. 

Matter  of  Gumbinner,  92  Misc.  104;  155  Supp.  188. 

3.  Mortgages,  Bonds  and  Commercial  Paper. 

As  to  the  situs  of  mortgages  for  purposes  of  inherit- 
ance taxation  there  are  three  different  theories.  The  mort- 
gage may  be  held  to  have  its  situs  at  the  domicile  of  the 


242  INHERITANCE  TAXATION 

owner,  or  where  the  land  is  situated,  or  where  the  bond 
and  mortgage  documents  happen  to  be  found.  It  is  possi- 
ble, under  these  conditions,  that  a  mortgage  held  by  a 
decedent's  estate  might  pay  taxes  in  three  states. 

a.     SITUS  AT  DOMICILE  OF  OWNER. 

The  original  view  of  the  New  York  courts  was  that  the 
situs  of  the  mortgage  debt  was  the  domicile  of  the  owner. 
The  court  said  in  Matter  of  Fearing,  200  N.  Y.  340;  93 
N.  E.  956,  "  whether  the  bonds  are  secured,  as  in  the 
Bronson  case,  by,  mortgages  of  corporate  property,  or,  as 
in  the  present  case,  by  mortgages  of  the  property  of  indi- 
viduals, they  represent,  equally,  debts  of  their  makers, 
which,  as  choses  in  action,  under  the  general  rule  of  law, 
are  inseparable  from  the  personalty  of  the  owner.  Under 
that  rule,  as  it  was  said  in  the  Foreign  Held  Bonds  Case 
(15  Wall.  300-320),  of  the  bonds  there,  they  '  can  have 
no  locality  separate  from  the  parties  to  whom  they  are 
due/  and  the  legal  situs  of  the  indebtedness,  which  they 
represent,  is  fixed  by  the  domicile  of  the  creditor.  The 
legal  title  of  these  bonds  in  question  was  transferred  by 
force  of  the  laws  of  Ehode  Island.  As  their  legal  and 
actual  situs  was  in  a  foreign  state,  upon  no  theory  were 
they  within  the  operation  of  our  Transfer  Tax  Law." 

This  doctrine  is  emphasized  in  several  of  the  other 
earlier  New  York  cases. 

Matter  of  Bronson,  150  N.  Y.  1;  44  N.  E.  707. 

Matter  of  Gibbes,  84  App.  Div.  510;  83  Supp.  53;  aff.  176  N.  Y.  565; 
68  N.  E.  1117. 

This  is  the  rule  adopted  by  the  courts  in  several  other 
states. 

Orcutt's  Appeal,  97  Pa.  St.  179. 
Gilbertson  v.  Oliver,  129  la.  568;  105  N.  W.  1002. 
Estate  of  Fair,  128  Cal.  607;  61  Pac.  184. 
Estate  of  McCahill,  171  Cal.  482;  153  Pac.  930. 


PAKT  IV  -  -  THE  PROPERTY  243 

But,  prior  to  the  repeal  of  the  tax  upon  the  intangible 
property  of  non-residents  within  the  state,  the  New  York 
courts  reversed  the  former  doctrine  and  held  that  the 
mortgage  debt  was  taxable  when  the  bonds  or  notes  were 
kept  within  the  state. 

Matter  of  Tiffany,  143  App.  Div.  327;  128  Supp.  106;  aff.  202  N.  Y. 
550,  sustained  sub.  nom.  Wheeler  v.  Sohmer,  233  U.  S.  434. 

b.     WHERE  THE  LAND  LIES. 

In  other  states  the  situs  of  the  mortgage  debt  is  regarded 
as  that  of  the  land  which  secures  it.  The  reasoning  upon 
which  this  doctrine  is  founded  is  set  forth  by  the  Massa- 
chusetts court  in  Kinney  v.  Stevens,  207  Mass.  368;  93 
N.  E.  586  as  follows: 

"  While,  for  general  purposes,  the  interest  of  the  mort- 
gagee is  treated  as  personal  property,  it  has  a  local  situs, 
and  carries  with  it  an  ownership  of  the  land  until  it  is 
redeemed  by  the  payment  of  the  debt  in  performance  of 
the  condition.  The  debt,  which  is  the  obligation  of  the 
debtor  to  pay,  and  the  land,  which  is  the  security  for  the 
payment  of  the  debt,  are  individual  parts  of  a  single 
valuable  property  in  the  mortgagee,  which  may  be  made 
available  in  different  ways.  The  debt  belongs  with  the 
mortgage,  and  it  must  coexist  to  give  the  mortgage  validity. 
For  that  purpose  it  has  a  situs  within  the  jurisdiction  of 
the  state  where  the  land  lies.  It  was  held  in  McCurdy  v. 
McCurdy,  197  Mass.  248;  83  N.  E.  881,  that  the  tax  upon 
the  succession  to  real  estate  in  this  Commonwealth,  which 
belonged  to  a  decedent  in  another  state  and  was  subject 
to  a  mortgage,  was  to  be  assessed  only  upon  the  value 
of  the  property  above  the  mortgage.  This  was  upon  the 
ground  that  what  passed  upon  the  death  of  the  mortgagor 
was  only  the  value  of  his  interest,  which  was  the  value 
of  the  real  estate  less  the  amount  of  the  debt  that  was 
a  charge  upon  it.  This  was  equivalent  to  holding  that, 
upon  the  death  of  the  mortgagee,  his  interest  in  the  real 


244  INHERITANCE  TAXATION 

estate,  to  the  amount  of  his  debt,  would  pass  in  succession 
to  his  representatives." 

This  rule  has  been  adopted  by  the  courts  of  Michigan 
and  MarjTland. 

Re  Rogers'  Estate,  149  Mich.  305;  112  N.  W.  93L 
Re  Merriam's  Estate,  147  Mich.  630 ;  111  N.  W.  196. 
Helser  v.  State,  128  Md.  228;  97  A.  539. 

On  a  similiar  theory  bonds  of  the  state  of  Massachu- 
setts kept  by  a  non-resident  at  his  domicile  are  held  tax- 
able. 

Bliss  v.  Bliss,  221  Mass.  201;  109  N.  E.  148. 

c.     WHERE  PHYSICALLY  PRESENT. 

' '  Bonds  and  commercial  paper  are  something  more  than 
mere  evidences  of  indebtedness  and  may  be  taxed  when 
they  are  physically  present  as  well  as  at  the  domicile  of 
the  owner/' 

State  ex  rel  Graff  v.  Probate  Court,  128  Minn.  371;  150  N.  W.  1004. 

And  so  in  New  York,  under  the  former  statute,  when 
the  bonds  themselves  were  physically  present  within  the 
state  as  well  as  the  property  it  was  held  that  they  were 
taxable  against  a  non-resident. 

Matter  of  Morgan,  150  N.  Y.  35 ;  44  N.  E.  1126. 

The  distinction  is  pointed  out  in  Matter  of  Bronson, 
150  N.  Y.  1 ;  44  N.  E.  707,  as  follows : 

"  Whatever  may  be  argued  in  support  of  the  right  to 
subject  the  bonds  of  domestic  corporations  to  appraise- 
ment for  taxation  purposes  under  this  act,  when  physi- 
cally within  the  state,  upon  some  theory  that  they  are 
something  more  than  the  evidences  of  a  debt  and  con- 
stitute a  peculiar  and  appreciable  species  of  property, 
within  the  recognition  of  the  law  as  well  as  of  the  business 
community,  such  argument  is  certainly  unavailing  in  this 
case;  where  the  bonds  themselves  were  at  their  owner's 
foreign  domicile." 


PART  IV  —  THE  PROPERTY  245 

This  doctrine  was  further  extended  and  the  Matter  erf 
Fearing,  200  N.  Y.  340,  overruled  in  Matter  of  Tiffany, 
143  App.  Div.  327;  128  Supp.  106,  aff.  202  N.  Y.  550;  sus- 
tained sub.  nom.  Wheeler  v.  Sohmer,  233  U.  S.  434. 

Here  notes  of  a  nonresident  decedent  secured  by  mort- 
gages on  nonresident's  land  were  in  the  safe  deposit  box 
of  decedent  in  New  York  and  were  held  taxable. 

In  the  course  of  its  discussion  the  United  States 
Supreme  Court  says: 

11  For  the  purposes  of  argument  we  may  assume  that 
there  are  limits  to  this  kind  of  power;  that  the  presence 
of  a  deed  would  not  warrant  a  tax  measured  by  the  value 
of  the  real  estate  it  conveyed,  or  even  that  a  memorandum 
of  a  contract  required  by  the  statute  of  frauds  would  not 
support  a  tax  on  the  value  of  the  contract  because  it 
happened  to  be  found  in  the  testator's  New  York  strong 
box.  But  it  is  plain  that  bills  and  notes,  whatever  they 
may  be  called  come  very  near  to  identification  with  the 
contract  that  they  embody.  An  endorsement  of  the  paper 
carries  the  contract  to  the  endorsee.  An  endorsement  in 
blank  passes  the  debt  from  hand  to  hand,  so  that  whoever 
has  the  paper  has  the  debt." 

To  the  same  effect : 
M otter  of  Wall,  104  App.  Div.  643 ;  94  Supp.  1166. 

So  mortgage  bonds  kept  by  a  nonresident  at  her  home 
in  New  Jersey  were  held  not  taxable  although  secured  by 
New  York  real  estate. 

Matter  of  Preston,  75  App.  Div.  250 ;  78  Supp.  31. 

But  a  mortgage  owned  by  a  resident  secured  by  foreign 
real  estate  was  held  taxable  although  in  the  hands  of  a 
nonresident  agent  of  the  deceased. 

Matter  of  Corning,  3  Misc.  160;  23  Supp.  285. 

Where  bonds  of  a  foreign  corporation  were  to  be  issued 
in  New  York  and  the  testator  died  before  they  were  issued, 


246  INHERITANCE  TAXATION 

held  that  the  title  was  in  the  foreign  corporation  and  that 
they  were  not  within  the  state  for  taxation  purposes. 
Matter  of  Hillman,  116  App.  Div.  186. 

d.     ' '  TRANSIENT  ' '  AND  ' '  HABITUAL  ' '  PRESENCE. 

The  courts  have  drawn  a  distinction  between  the  "  tran- 
sient "  presence  of  securities  within  the  state  and  their 
11  habitual  "  deposit  there. 

M after  of  Leopold,  35  Misc.  369 ;  71  Supp.  1032. 

When  paper  evidences  of  debt  are  in  the  possession  and 
control  of  an  agent  of  the  owner  in  some  state  other  than 
that  of  his  domicile  and  are  held  there  by  such  agent  for 
management  in  connection  with  business  there  carried  on 
they  are  regarded  as  property  within  the  state  for  inherit- 
ance tax  purposes. 

Estate  of  Fair,  128  Cal.  607;  61  Pac.  184. 
Matter  of  Morgan,  150  N.  Y.  35;  44  N.  E.  1126. 

When  a  resident  of  Minnesota  came  to  California  for 
his  health  and  brought  with  him  for  safe  keeping  Minne- 
sota securities  they  were  held  "  transiently  "  within  the 
state  and  not  taxable  in  California. 

Estate  of  McCaMl,  171  Cal.  482;  153  Pac.  930. 

In  discussing  this  distinction  the  Illinois  court  says  in 
People  v.  Griffith,  245  111.  532;  92  N.  E.  313  (supra) : 

"  There  was  no  evidence  in  the  record  showing  that  the 
money  that  was  used  in  purchasing  the  stocks  and  bonds 
found  in  the  safety  deposit  box  of  decedent  was  kept  here 
for  investment,  but  only  for  safe  keeping.  Under  the 
New  York  decisions  construing  the  statute  previous  to 
the  adoption  here,  as  well  as  from  the  wording  of  the 
statute,  there  is  a  basis  for  contending  that  the  bonds  of 
foreign  corporations  habitually  in  this  state,  even  though 
here  only  for  safe  keeping,  should  be  taxed.  In  reaching 
a  conclusion  on  this  question,  however,  it  is  necessary  to 
keep  in  mind  the  familiar  rule  applicable  to  all  forms  of 


PART  IV  -  -  THE  PROPERTY  247 

taxation,  and  particularly  special  taxes,  that  the  sovereign 
is  bound  to  express  its  intention  to  tax  in  clear  and  unam- 
biguous language.  If  there  be  doubt  whether  under  the 
language  it  was  intended  to  tax  certain  property  the 
language  should  not  be  extended  beyond  the  clear  import 
of  the  words  used." 

4.  Corporate  Stock. 

a.     OF  DOMESTIC  CORPORATIONS. 

All  the  authorities  agree  that  a  state  may  tax  the  trans- 
fer of  stock  owned  by  nonresidents  in  domestic  corpora- 
tions, even  though  the  certificates  are  physically  kept 
without  the  state. 

Hawley  v.  Maiden,  232  U.  S.  1;  34  S.  Ct.  R.  201. 
Ewald's  Exr.  v.  City  of  Louisville  (Ky.),  189  S.  W.  438. 
Matter  of  Clarkson  (Ark.),  188  S.  W.  834. 
Dixon  v.  Russell,  78  N.  J.  L.  296;  73  A.  51. 

This  was  the  rule  in  New  York  prior  to  the  repeal  of 
the  tax  on  intangibles  of  nonresidents  in  1911. 

"  The  attitude  of  a  holder  of  shares  of  capital  stock  is 
quite  other  than  that  of  a  holder  of  bonds,  towards  the  cor- 
poration which  issued  them.  While  the  bondholders  are 
simply  creditors,  whose  concern  with  the  corporation  is 
limited  to  the  fulfillment  of  its  particular  obligation,  the 
shareholders  are  persons  who  are  interested  in  the  opera- 
tion of  the  corporate  property  and  franchises  and  their 
shares  actually  represent  undivided  interests  in  the  cor- 
porate enterprise." 

Matter  of  Branson,  150  N.  Y.  1 ;  44  N.  E.  707. 

To  the  same  effect  is: 
Matter  of  Whiting,  150  N.  Y.  27;  44  N.  E.  715. 

"  The  situs  of  stock  in  a  corporation  is  the  state  of 
incorporation,  for  the  purposes  at  least  of  the  inheritance 
tax  law." 

McDongald  v.  Low,  164  Cal.  107 ;  127  Pac.  1027. 


248  INHEKITANCE  TAXATION 

So  it  was  held  in  Nebraska  that  stock  in  a  Nebraska  cor- 
poration, held  in  a  foreign  state  by  a  foreign  trustee  under 
the  deed  of  a  resident  decedent,  was  taxable. 
Douglas  County  v.  Kountze,  84  Neb.  506 ;  121  N.  W.  593. 

When  stock  of  domestic  corporations  is  found  in  the  safe 
deposit  box  of  a  nonresident  decedent  in  Illinois,  held 
taxable. 

People  v.  Griffith,  245  111.  532;  92  N.  E.  313. 

It  is  taxable  even  though  the  certificates  are  without  the 
state. 

Greves  v.  Shaw,  173  Mass.  205;  53  N.  E.  372. 

and  though  the  stock  is  held  in  another's  name 

Matter  of  Newcomb,  71  App.  Div.  606;  76  Siipp.  222;  aff.  172  N.  Y. 
608;  64  N.  E.  1123. 

The  tax  is  imposed  though  the  certificates  are  given  for 
life  to  mother  of  the  donor  with  remainder  to  a  niece. 

Matter  of  Bushnell,  73  App.  Div.  325;  77  Supp.  4;  aff.  172  N.  Y.  649; 
65  N.  E.  1115. 

When  the  life  tenant  dies  before  the  remainderman  they 
are  still  taxable  when  passing  under  the  latter 's  will  — 
Matter  of  Wright,  214  K  Y.  714;  108  N.  E.  1112. 

For  the  purposes  of  inheritance  taxation  a  national  bank 
located  within  the  state  is  a  domestic  corporation. 
Matter  of  Gushing,  40  Misc.  505;  82  Supp.  795. 

A  share  of  stock  in  a  corporation  may  be  defined  as  a 
right  which  its  owner  has  in  the  management,  profits  and 
ultimate  assets  of  the  corporation.  The  shares  of  stock 
represent  interests  in  the  earnings  or  the  property  of  the 
corporation  and  a  certificate  is  not  stock  itself,  but  only  a 
convenient  representation  of  it,  though  one  may  be  a  stock- 
holder without  having  a  certificate  issued  to  him.  The 
court  finds  that  the  decedent  owned  an  "  interest  "  in  the 


PAET  IV  — THE  PEOPEETY  249 

property  of  the  bank  within  the  meaning  of  the  inheritance 
statute  and  that  such  interest  is  property  within  the  juris- 
diction of  the  state. 

In  re  Culver,  145  Iowa  1,  123  N.  W.  743. 

b.  FOREIGN  CORPORATIONS  OWNING  PROPERTY  WITHIN  THE 

STATE. 

On  the  theory  that  a  certificate  of  stock  is  a  mere  muni- 
ment of  title,  like  a  title  deed,  not  the  stock  itself,  but  mere 
evidence  of  its  ownership  (Cook  on  Corporations  Sec.  13), 
many  states  tax  transfers  of  stock  in  foreign  corporations 
when  such  corporations  own  property  within  the  state  to 
the  proportion  that  such  value  bears  to  the  entire  assets 
of  the  company. 

A  recent  case  in  Idaho  illustrates  what  nice  questions 
may  arise  under  such  statutes. 

The  decedent,  E.  H.  Harriman,  a  resident  of  New  York, 
owned  shares  of  stock  in  the  Union  Pacific,  which  cor- 
poration owned  all  the  stock  of  the  Oregon  Short  Line 
Railroad  Company,  which  later  corporation  owned  large 
and  valuable  property  in  Idaho.  Held,  that  as  the  shares 
of  stock  of  the  Union  Pacific  owned  by  the  deceased  were 
not  physically  within  Idaho  at  the  time  of  his  death  and 
the  deceased  owned  no  stock  in  the  Oregon  Short  Line, 
his  interest  therein  because  of  his  ownership  of  Union 
Pacific  stock  wras  not  subject  to  tax  under  the  Idaho 
statute. 

State  v.  Dunlap,  28  Idaho,  784;  156  Pac.  1141. 

c.  FOREIGN  CORPORATIONS  NOT  OWNING  PROPERTY  WITHIN 

THE  STATE. 

As  a  general  rule  the  transfer  of  stock  in  such  corpora- 
tions is  not  taxed  as  against  a  nonresident  decedent  merely 
because  the  certificates  are  physically  within  the  state. 

Matter  of  James,  144  N.  Y.  6;  38  N.  E.  961. 
Matter  of  Bishop,  82  App.  Div.  112;  81  Supp.  474. 
People  v.  Griffith,  245  111.  532;  92  N.  E.  313;  followed  (1917)  276 
111.  44  and  73. 


250  INHERITANCE  TAXATION 

But  the  reasoning  of  modern  authorities  would  support 
such  a  tax  when  the  certificate  is  within  the  jurisdiction  of 
the  taxing  power.  For  example,  in  New  York,  though  the 
inheritance  tax  was  held  not  to  cover  the  certificates  of 
foreign  corporations  kept  in  New  York  by  nonresident 
decedents,  it  was  held  that  such  certificates  are  taxable 
property. 

In  People  ex  rel.  Hatch  v.  Reardon,  185  N.  Y.,  531,  450, 
the  court  said:  "  But  even  assuming  that  a  tax  on  the 
sale  of  property  is,  in  effect,  a  tax  upon  the  property  itself, 
what  are  certificates  of  stock  and  how  may  they  be  treated 
by  the  state  for  purposes  of  taxation?  They  may  be 
treated  as  property  from  the  function  they  perform  and 
the  use  that  is  made  of  them.  They  may  well  be  regarded 
as  a  distinct  species  of  property,  for  they  now  represent 
the  bulk  of  the  property  in  the  state  and  are  the  universal 
medium  of  transfer.  As  we  said  in  a  recent  case :  * '  The 
main  use  of  certificates  is  for  convenience  of  transfer,  and 
they  are  treated  by  business  men  as  property  for  all 
practical  purposes.  They  are  sold  in  the  market,  trans- 
ferred as  collateral  security  to  loans  and  are  used  in 
various  ways  as  property.  They  pass  by  delivery  from 
hand  to  hand,  are  the  subject  of  larceny,  and  are  taxable 
generally  in  this  state.'  " 

In  Simpson  v.  Jersey  City  Contracting  Company,  165 
N.  Y.  193,  the  plaintiffs  were  suing  a  foreign  corporation 
and  procured  a  warrant  of  attachment  and  a  levy  was 
made  on  certain  certificates  of  stock  in  another  foreign 
corporation,  which  certificates  were  physically  in  the  pos- 
session of  the  Produce  Exchange  of  the  city  of  New  York, 
and  the  question  was,  whether  an  attachment  could  be 
had  of  the  physical  pieces  of  paper.  The  court  said  at 
page  197 :  •* '  Jurisdiction  is  founded  on  the  presence  of  the 
thing  in  respect  to  which  it  is  exercised.  The  action  is  in 
rem  and  seeks  the  place  rei  sitae.  Did  it  not  therefore 


PART  IV  —  THE  PROPERTY  251 

clearly  have  rights  -or  interests  within  this  state  which 
could  be  impounded  by  our  courts  to  abide  the  result  of 
the  litigation  over  the  plaintiff's  claim?  I  think  so." 

d.  APPORTIONMENT  OF  CORPORATE  PROPERTY. 

When  a  corporation  is  incorporated  in  several  states 
and  the  tax  is  against  the  estate  of  a  nonresident  stock- 
holder it  is  based  not  on  the  market  value  of  the  stock  but 
upon  the  proportionate  value  of  the  property  of  the  cor- 
poration within  the  state. 

Matter  of  Cooley,  186  N.  Y.  220;  78  N.  E.  939. 
Matter  of  Thayer,  193  N.  Y.  490 ;  86  N.  E.  462. 
Kingsbury  v.  Chapin,  196  Mass.  533;  82  N.  E.  700. 
Gardiner  v.  Carter,  74  N.  H.  507;  69  A.  939. 

The  same  is  true  as  to  joint  stock  associations  organized 
in  several  states. 

Matter  of  Willmer,  75  Misc.  62;  134  Supp.  686;  aff.  153  App.  Div. 
804;  138  Supp.  649. 

But  when  the  corporation  is  incorporated  in  one  state 
only  the  value  of  a  nonresident's  interest  in  a  domestic 
corporation  is  fixed  by  the  market  price  and  not  by  the 
proportion  of  the  corporate  assets  within  the  state. 
Matter  of  Palmer,  183  N.  Y.  238;  76  N.  E.  16. 

e.  PLEDGED  SECURITIES. 

Securities  pledged  by  a  nonresident  decedent  within  the 
state  to  secure  a  debt  have  been  held  not  to  be  his  property 
for  the  purposes  of  taxation. 

Matter  of  Pullman,  46  App.  Div.  574;  62  Supp.  395. 
Matter  of  Ames,  141  Supp.  793. 

The  doctrine  of  the  Ames  and  Pullman  cases  has  just 
been  expressly  overruled  by  the  New  Jersey  Court  of 
Errors  on  the  ground  that  it  is  in  conflict  with  the  rule  as 
held  by  the  New  York  Court  of  Appeals. 

Security  Trust  Co.,  as  Exr.  of  Morse  v.  Edwards,  decided  June  18, 
1917,  and  not  yet  reported. 


252  IXHEEITANCE    TAXATION 


In  this  case  stock  in  a  New  Jersey  corporation  was 
pledged  by  a  Connecticut  decedent  in  Connecticut  but  the 
New  Jersey  comptroller  refused  to  allow  its  transfer 
unless  the  tax  was  paid.  The  court  said: 

'  '  The  New  York  courts  recognize  that  the  pledgor  has  a 
residuary  interest.  In  Warner  v.  Fourth  National  Bank, 
115  N.  Y.  251,  the  interest  of  a  nonresident  pledgor  of 
notes  held  in  pledge  by  a  resident,  was  held  to  be  subject 
to  attachment  in  New  York  state.  Judge  Gray  says: 
*  The  title  to  property  may  remain  in  the  pledgor,  but 
the  pledgee  has  a  lien,  or  special  property,  in  the  pledge, 
which  entitled  him  to  its  possession  against  the  world.' 
And  further:  *  The  pledger's  residuary  interest  in  the 
pledge  constitutes  a  claim  or  demand  upon  the  pledgee, 
which  is  property,  and  hence  may  become  the  subject  of 
attachment.  '  And  again  :  '  We  think  the  attachment  in 
question  here  operated  to  secure  to  the  (attaching  creditor) 
the  lien  upon  the  pledged  property,  to  the  extent  of  the 
interest  of  the  (pledgor),  and  that  interest  was  the  right 
to  the  pledged  property,  or  so  much  of  it  or  of  its  proceeds 
from  any  collection  as  remained  after  the  satisfaction  of 
the  pledgee's  claim  for  advances.' 

'  '  See  also  opinion  of  the  same  judge  in  Simpson  v.  Jer- 
sey City  Contracting  Co.,  165  N.  Y.  193,  where  it  is  said: 
'  The  pledgee  obtains  a  special  property  in  the  thing 
pledged,  while  the  pledgor  remains  general  owner.' 

"  The  most  distinguished  New  York  judge  of  all  times, 
Chancellor  Kent,  expressly  held  in  Cortelyou  v.  Lansing,  2 
Caines  Cases  200,  2  N.  Y.  Common  Law  Reports  802 
(1805),  that  the  legal  property  in  a  pledge  does  not  pass 
as  in  the  case  of  a  mortgage  with  defeasance;  that  the 
general  ownership  remained  with  the  pledgor  and  only  a 
special  property  passed  to  the  pledgee,  and  further  that 
the  pledger's  interest  passed  to  his  administrators. 


PART  IV  — THE  PROPERTY  253 

"  If  the  stock  had  a  situs  here,  where  else  can  be  the 
situs  of  the  residuum! 

"  If  the  interest  of  the  pledgee  is  less  than  absolute  and 
unqualified  ownership,  how  can  the  residuary  interest  of 
the  pledger  have  a  situs  other  than  that  of  the  subject  of 
the  pledge!  " 

The  opinion  thus  supports  its  ruling  from  other  author- 
ities after  an  extended  review  of  the  English  cases : 

"  In  Meisel  v.  Merchants  National  Bank,  85  N.  J.  L.  253, 
88  A.  1067  (Court  of  Errors,  1913),  it  was  said  in  effect 
that  the  pledger  has  the  right  to  bring  a  possessory  action 
against  the  pledgee  to  recover  the  stock  itself,  providing 
only  he  makes  and  keeps  good  a  tender  of  the  debt. 

11  In  McCrea  v.  Yule,  68  N.  J.  L.  465,  53  A.  210,  the 
Supreme  Court  in  1902,  in  a  case  of  an  assignment  of  a 
a  chose  in  action  as  collateral  security,  said  (p.  467) :  , 

"  'A  pledge  of  personal  property,  assigned  as  collateral 
security,  has  the  right  to  collect  the  interest,  dividends  and 
income  accruing  on  the  collateral  assigned,  accounting  to 
the  pledgor  upon  the  redemption  of  the  pledge.  In  making 
such  collections  the  pledgee  is  a  trustee  of  the  pledgor  to 
see  to  the  proper  applications  of  the  funds  collected  or  to 
refund  the  same  to  the  pledgor  if  the  debt  be  otherwise 
paid/  In  Mechanics'  B.  &  L.  v.  Conover,  14  N.  J.  Eq.  219 
(Reversed  on  the  other  grounds,  Herbert  v.  Mechanics' 
B.  &  L.  Assn;  17  N.  J.  Eq.  497)  the  court  said  that  when 
shares  of  stock  are  pledged,  they  *  remain  the  property  of 
the  shareholder  for  every  purpose  excepting  that  of 
defeating  the  lien  '  of  the  pledgee. 

"  In  the  United  States  Supreme  Court,  drawing  the 
familiar  distinction  between  a  chattel  mortgage  and  a 
pledge,  Mr.  Justice  Pitney  says,  in  Dale  v.  Pattison,  234 
U.  S.  399,  405;  34  S.  Ct.  R*  785: 

"  On  the  other  hand  where  title  to  the  property  is  not 
presently  transferred,  but  possession  only  is  given,  with 


254  INHERITANCE  TAXATION 

power  to  sell  upon  default  in  the  performance  of  a  con- 
dition, the  transaction  is  a  pledge,  and  not  a  mortgage. ' ' 

The  law  of  Connecticut  appears  to  be  to  the  same  effect. 
In  Robertson  v.  Wilcox,  36  Conn.  426  (1870),  the  highest 
court  of  that  state,  at  page  430,  said: 

"A  pledge  of  property  does  not  carry  with  it  the  title 
to  the  thing  pledged.  The  title  remains  as  before.  All 
that  passes  .to  the  pledgee  is  the  right  of  possession, 
coupled  with  a  special  interest  in  the  property,  in  order 
to  protect  the  right." 

The  method  of  computing  the  tax  in  the  above  case  is 
instructive.  The  court  thus  states  the  process: 

"  Morse  left  no  real  estate  whatever,  either  within  or 
without  New  Jersey.  His  gross  estate  amounted  to 
$64,523.85,  and  by  the  will  went  entirely  to  collaterals  or 
those  unrelated  to  the  testator.  The  estate  consisted 
largely  of  certain  securities,  viz.,  corporate  stock  and  four 
bonds  appraised  in  the  aggregate  at  $63,285.50.  All  of 
these  securities  had  been  pledged  by  Morse  in  his  lifetime, 
accompanied  by  a  power  of  attorney  in  blank,  to  the 
Phoenix  National  Bank  of  Hartford,  Connecticut,  to  secure 
his  promissory  note  of  $37,500  upon  which  there  was  due 
$5.21  of  interest,  together  with  all  of  the  principal  amount, 
at  the  time  of  his  death.  It  does  not  appear  that  this  note 
had  been  called  prior  to  the  death  of  Morse  or  that  the 
pledgee  had  caused  any  of  the  securities  to  be  transferred 
to  it  or  that  any  demand  had  been  made  upon  him  prior 
to  death  for  the  payment  of  the  note. 

"  Among  the  securities  so  pledged  were  New  Jersey 
stocks  appraised  in  aggregate  at  $28,249. 

"  The  Comptroller  appraised  the  New  Jersey  stocks  at 
the  figures  above  mentioned,  and  the  decedent 's  interest  in 
the  New  Jersey  stocks  at  the  sum  of  $11,507.  This  amount 
was  obtained  by  pro-rating  the  amount  of  the  loan  together 
with  such  portion  of  the  general  deductions  as  the  other 


PART  IV  -  -  THE  PROPERTY  255 

assets  were  insufficient  to  meet,  over  all  of  the  stocks 
pledged.  The  value  of  the  equity  in  the  New  Jersey  stocks 
was  arrived  at  by  applying  to  the  equity  in  all  of  the 
stocks  the  fraction  represented  by  the  value  of  the  New 
Jersey  stocks  over  the  value  of  all  the  securities  pledged. 

"  Treating  the  gross  estate  for  the  purpose  of  taxation 
as  the  value  of  the  equity  in  all  of  the  stocks,  plus  the 
value  of  the  other  assets  the  Comptroller  arrived  at  the 
proportion  demanded  by  the  method  of  computation  pre- 
scribed for  nonresident  estates  in  section  12  of  the  Act 
(namely,  the  ratio  of  the  New  Jersey  property  to  the  total 
property  wherever  situate),  which  proportion  was  found 
to  be  42.6  per  cent.  The  tax  was  then  calculated  in  the 
manner  prescribed  in  that  section  and  found  to  be  $527.55. 

"  The  Comptroller  refused  to  consent  to  the  transfer  of 
the  New  Jersey  stocks  to  executor  of  the  decedent,  unless 
such  tax  upon  the  decedent's  equity  therein  was  paid,  and 
accordingly  it  was  paid. 

"  The  amount  of  the  tax,  i.  e.,  the  method  of  computa- 
tion, is  not  challenged,  and  with  that  we  are  not  con- 
cerned. ' ' 

It  is  believed  that  the  New  Jersey  court  states  a  sounder 
doctrine  than  that  of  the  Pullman  and  Ames  cases  and  that 
it  will  be  sustained  in  New  York. 

But  in  any  event  when  redeemed  by  the  executor  the  title 
relates  back  to  the  date  of  death. 

Matter  of  Hurcomb,  36  Misc.  755;  74  Supp.  475. 

Where  the  court  said: 

"  While  the  debt  secured  by  the  pledge  of  collateral  is 
unliquidated,  and  the  extent  of  the  equity  is  unascertain- 
able,  as  was  the  case  in  the  Matter  of  Pullman,  it  may  well 
be  that  the  taxation  of  any  equity  therein  would  be  post- 
poned until  the  transaction  had  been  completed  and  the 
value  of  the  decedent's  interest  therein  determined.  But 
after  the  transaction  had  been  closed,  and  the  interest  of 


256  INHERITANCE  TAXATION 

the  estate  therein  fixed  by  redemption  of  the  collateral  — 
to  paraphrase  the  language  of  Justice  Patterson  —  those 
securities  are  no  longer  liable  to  be  resorted  to  by 
creditors ;  the  title  to  them  has  reverted  to  the  estate  of  the 
pledger,  and  they  are  in  a  situation  to  be  taxed  as  property 
of  the  estate.  They  can  no  longer  be  required  to  pay  the 
debts  to  which  they  were  pledged  as  collateral,  and  there 
is  no  longer  a  necessity  for  protecting  the  creditor's 
security,  his  relation  to  the  matter  having  terminated. ' ' 

The  pledged  property  cannot  be  redeemed  with  the 
proceeds  of  tangible  assets  which  are  taxable  within  the 
state  and  thus  free  exempt  property  from  the  lien,  but  the 
debt  must  be  deemed  to  be  paid  with  the  pledged  property 
for  purposes  of  taxation. 

Matter  of  Burden,  47  Misc.  329;  95  Supp.  972. 

And  the  surplus  value  of  the  pledged  assets  is  property 
within  the  state  for  purposes  of  taxation. 

Matter  of  Bennett,  N.  Y.  L.  J.,  Oct.  24,  1906;  aff.  120  App.  Div.  904; 
105  Supp.  1107. 

5.  Other  Choses  in  Action, 
a.     BANK  DEPOSITS. 

Money  deposited  in  banks  is  taxable  at  the  place  of 
deposit. 

Matter  of  Burr  (prior  to  1911),  16  M'isc.  89;  30  Supp.  811. 
Be  Rogers'  Estate,  149  Mich.  305;  112  N.  W.  931. 
Re  Speers,  4  Ohio  N.  P.  238. 

And  also  at  domicile  of  decedent,  even  though  it  involves 
double  taxation. 

Mann  v.  Carter,  74  N.  H.  345;  68  A.  130. 

In  discussing  the  theory  of  such  taxation  (prior  to  1911) 
the  New  York  Court  of  Appeals  said : 

"  If  he  had  deposited  in  specie,  to  be  returned  in  specie, 
there  can  be  no  doubt  that  the  money  would  be  property 


PART  IV  —  THE  PROPERTY  257 

in  this  state  subject  to  taxation.  But,  instead,  he  did  as 
business  men  generally  do,  deposited  his  money  in  the 
usual  way,  knowing  that,  not  the  same,  but  the  equivalent, 
would  be  returned  to  him  upon  demand.  While  the  relation 
of  debtor  and  creditor  technically  existed,  practically  he 
had  his  money  in  the  bank  and  could  come  and  get  it  when 
he  wanted  it.  It  was  an  investment  in  this  state  subject 
to  attachment  by  creditors.  If  not  voluntarily  repaid,  he 
could  compel  payment  through  the  courts  of  this  state. 
The  depositary  was  a  resident  corporation,  and  the  receiv- 
ing and  retaining  of  the  money  were  corporate  acts  in  this 
state.  Its  repayment  would  be  a  corporate  act  in  this 
state.  Every  right  springing  from  the  deposit  was  created 
by  the  laws  of  this  state.  Every  act  out  of  which  those 
rights  arose  was  done  in  this  state.  In  order  to  enforce 
those  rights,  it  was  necessary  for  him  to  come  into  this 
state.  Conceding  that  the  deposit  was  a  debt;  conceding 
that  it  was  intangible,  still  it  was  property  in  this  state 
for  all  practical  purposes,  and  in  every  reasonable  sense 
within  the  meaning  of  the  Transfer  Tax  Act. ' ' 
Matter  of  Houdayer,  150  N.  Y.  37;  44  N.  E.  718. 

The  rule  is  applied  even  though  depositor  holds  a  certi- 
ficate of  deposit  at  his  non-resident  domicile. 

Matter  of  Hewitt,  90  Supp.  1100 ;  aff.  181  N.  Y.  547. 

b.     DEBTS. 

When  due  from  residents  to  a  non-resident  decedent, 
debts  are  property  within  the  state  for  purposes  of  inheri- 
tance taxation. 

People  ex  rel.  Graff  v.  Probate  Court,  128  Minn.  371;  150  N.  W. 

1094. 

Blackstone  v.  Miller,  188  U.  S.  189. 
Matter  of  Page,  N.  Y.  Law  Journal,  April  13,  1912. 
Matter  of  Daly,  100  App.  Div.  373;  91  Supp.  858;  aff.  182  N.  Y.  524; 

74  N.  E.  1116. 

9 


258  INHERITANCE  TAXATION 

In  the  Daly  case  the  court  said : 

"  The  continous  tendency  of  the  courts  of  this  State  has 
been  to  embrace  within  the  Transfer  Tax  Law  directly  or 
indirectly  all  property  of  every  species  found  herein  upon 
the  death  of  the  decedent.  That  policy  and  rule  has  never 
been  departed  from  or  infringed  upon,  save  by  the  appli- 
cation of  what  the  court  regarded  as  an  inexorable  rule  of 
law,  which  upon  thorough  examination  turns  out  to  be  a 
fiction.  When  that  fact  appeared,  and  the  statute  is  the 
subject  of  construction  wherein  it  is  made  to  appear,  it 
becomes  controlling  not  only  as  an  adjudication  of  the 
highest  court  of  the  land,  but  also  as  an  adjudication  of 
the  construction  adopted  by  the  courts  of  this  state.  It  is 
not  so  much  a  difference  of  construction  as  it  is  of  reason 
producing  it,  and  when  the  reason  for  a  given  construction 
is  shown  to  fail,  and  the  policy  of  the  statute  is  clear,  the 
adjudication  of  the  United  States  court  becomes  supreme 
and  is  made  the  law  of  the  land  writh  respect  to  the  par- 
ticular questions  involved. 

"  Under  these  circumstances,  we  think  its  rule  must 
obtain,  and  so  obtaining  it  necessarily  follows  that  debts 
due  within  this  state  from  solvent  debtors,  which  are  con- 
verted into  money  herein,  and  must  of  necessity  be  enforced 
in  this  jurisdiction,  or  not  at  all,  become  property  within 
the  meaning  of  the  Transfer  Tax  Law,  and  as  such  are 
taxable. ' ' 

On  the  other  hand  it  has  been  held  that  the  situs  of  a 
debt  is  the  domicile  of  the  creditor. 

Citizens  Bank  v.  Sharp,  53  Md.  521. 
Kintzing  v.  Hutchinson,  Fed.  Cas.  7384. 

As  a  matter  of  fact  it  is  both  for  purposes  of  inheritance 
taxation. 

c.     LIFE  INSURANCE. 

A  policy  of  life  insurance  held  by  a  nonresident  in  a  local 
company  is  not  property  within  the  state  subject  to  the 
inheritance  tax. 


PART  IV-- THE  PROPERTY  259 

In  Matter  of  Gordon,  186  N.  Y.  471;  79  N.  E.  722,  the 
court  said: 

"  If  the  contract  in  this  case  is  subject  to  the  imposition 
of  a  transfer  tax,  then  any  contract  of  insurance  issued  to 
a  non-resident,  passing  to  and  held  by  his  non-resident 
representatives  or  assigns,  and  being  administered  and 
enforceable  in  a  foreign  jurisdiction,  whether  in  the  state 
of  Texas  or  California,  or  in  some  foreign  country,  would 
afford  the  basis  of  taxation  in  this  state,  provided  only 
the  policy  was  issued  by  a  New  York  corporation  and 
assess  could  be  obtained  by  the  tax  collector  to  its  pro- 
ceeds. No  distance  of  domicile  of  the  assured  and  his 
transferees  or  beneficiaries,  and  no  completeness  of 
foreign  jurisdiction  over  administration  and  enforcement, 
and  no  lack  of  anticipation  of  such  a  result  upon  the  part 
of  the  assured,  would  be  a  bar  to  the  attempted  appli- 
cation of  the  taxing  power.  It  requires  no  great  imagina- 
tive processes  to  picture  the  limits  and  disapproval  and 
friction  to  which  this  theory  would  lead  if  logically  carried 
to  its  full  length. 

"  It  was  undoubtedly  the  intent  of  the  legislature  that 
the  statute  under  consideration  should  be  liberally  con- 
strued to  the  end  of  taxing  the  transfer  of  all  property 
which  fairly  and  reasonably  could  be  regarded  as  subject 
to  the  same,  and  this  court  has  unequivocally  placed  itself 
upon  record  in  favor  of  construing  the  statute  in  the  light 
of  such  intent.  But  the  proposition  now  propounded,  if 
adopted,  would  lead  far  beyond  any  point  which  has  thus 
far  been  reached,  and  we  do  not  believe  that  it  would  be 
wise  or  practicable  to  adopt  it. ' ' 

To  the  same  effect  are : 
Matter  of  Horn,  39  Misc.  133 ;  78  Supp.  979. 
Matter  of  Rhoades,  190  N.  Y.  525 ;  83  N.  E.  1130. 
Matter  of  Abbett,  29  Misc.  567;  61  Supp.  1067. 

A  policy  on  the  life  of  a  resident  payable  to  the  estate  is 
taxable. 

Matter  of  Knoedler,  140  N.  Y.  377;  35  N.  E.  601. 


260  INHERITANCE  TAXATION 

But  not  if  assigned  to  a  beneficiary. 

Matter  of  Parsons,  117  App.  Div.  321;  102  Supp.  168. 
Matter  of  Elting,  78  Misc.  692;  140  Supp.  238. 

d.  SEAT  IN  THE  STOCK  EXCHANGE. 

This  is  universally  held  to  be  property. 

Nashw  Bank  v.  Abbott,  181  Mass.  531;  63  N.  E.  1085. 

Powell  v.  Waldron,  89  N.  Y.  328. 

People  v.  Feitner,  167  N.  Y.  1;  60  N.  E.  265. 

Page  v.  Edmunds,  187  U.  S.  596;  23  S.  Ct.  R.  200. 

It  is  taxable  as  such  in  New  York. against  a  resident. 

Matter  of  Glendinning,  68  App.  Div.  125;  74  Supp.  190. 
Matter  of  Curtis,  31  Misc.  83;  64  Supp.  574. 

And  also  when  owned  by  a  non-resident  prior  to  1911. 

Matter  of  Hellman,  174  N.  Y.  254;  66  N.  E.  809. 

e.  INTEREST  IN  THE  ESTATE  OF  ANOTHER. 

Where  a  non-resident  died  leaving  a  legacy  to  another 
non-resident  who  died  the  next  day  the  interest  of  the 
deceased  devisee  in  the  estate  of  the  testator  had  not  been 
determined  and  therefore  was  not  property  within  the 
state. 

Matter  of  Zefita,  167  N.  Y.  280;  60  N.  E.  508. 
Matter  of  Thomas,  3  Misc.  388;  240  Supp.  713. 

But  where  a  non-resident  bequeathed  the  residuary  to  his 
son  also  a  non-resident  and  the  son  died  after  the  amount 
of  the  residuary  estate  had  been  ascertained,  though  still 
in  the  hands  of  the  executors,  it  was  held  that  the  interest 
of  the  son  was  property  within  the  state  transferred  at  his 
death  and  taxable. 

Matter  of  Clinch,  180  N.  Y.  300;  73  N.  E.  35. 

The  distinction  thus  made  has  not  generally  been  fol- 
lowed. So  in  Pennsylvania,  when  a  brother  of  the 
decedent,  who  was  a  resident  of  New  York,  died  two  weeks 


PART  IV  —  THE  PROPERTY  261 

before  his  sister,  who  was  a  resident  of  Pennsylvania,  it 
was  held  that  the  sister  inherited  at  the  moment  of  the 
brother's  death,  and  that  it  was  wholly  immaterial  that  the 
net  amount  of  his  estate  had  not  been  ascertained. 
Milliken's  Estate,  206  Pa.  St.  149;  55  A.  853. 

f.     PARTNERSHIP  INTEREST. 

The  interest  of  co-partners  is  in  the  surplus  after  pay- 
ment of  debts,  and  is  therefore  intangible,  even  if  the 
co-partnership  owns  real  estate. 

Darrow  v.  Calkins,  154  N.  Y.  503;  49  N.  E.  61. 

Russell  v.  McCall,  141  N.  Y.  437. 

Preston  v.  Fitch,  137  N.  Y.  41. 

Menagh  v.  Whitehall,  52  N.  Y.  146. 

Secor  v.  Tradesmen's  National  Bank,  92  App.  Div.  241. 

Although  the  question  has  not  been  litigated  the  New 
York  state  comptroller  has  given  an  opinion  that,  under 
this  doctrine,  real  estate  owned  by  a  partnership  though 
situated  outside  the  state  is  to  be  included  in  the  valuation 
of  the  assets  of  the  firm  in  which  a  decedent  had  an 
interest 

Matter  of  Dusenberry,  2  N.  Y.  State  Dept.  R«p.  50L 

The  interest  of  a  nonresident  in  a  New  York  partner- 
ship is  taxable  under  the  present  N.  Y.  statute,  chapter 
664,  L.  1915. 

Matter  of  Du  Bois,  New  York  Law  Journal,  Feb.  9,  1917 ;  163  Supp. 
668. 

The  same  rule  prevails  in  Pennsylvania  by  judicial  con- 
struction. 

In  re  Small,  151  Pa.  St.  1 ;  25  A.  23. 

But  where  co-partners  take  title  to  real  estate  in  their 
individual  names,  as  tenants  in  common,  it  does  not  become 
partnership  property  in  the  absence  of  evidence  of  intent. 
Matter  of  Lowenfeld,  New  York  Law  Journal,  June  27,  1916. 


262  INHERITANCE  TAXATION 

But  where  real  estate  is  purchased  with  partnership 
funds  and  the  title  is  taken  in  the  name  of  one  of  the  part- 
ners a  resulting  trust  arises  in  favor  of  the  other  partners 
in  proportion  to  their  interest  in  the  partnership. 
People  v.  Sholem,  244  111.  502;  91  N.  E.  704. 

Local  assets  of  a  partnership  with  its  main  office  in  Bos- 
ton and  branch  office  in  New  York  are  taxable  in  New  York. 
Matter  of  Clark,  New  York  Law  Journal,  Feb.  9,  1912. 

B.— AS  TO  VALUE. 

Though  the  tax  is  on  the  transfer  and  not  upon  the  prop- 
erty the  value  of  the  property  transferred  is  used  as  a 
yard-stick  whereby  to  measure  the  value  of  the  transferred 
interest.  As  we  have  seen,  the  value  must,  unless  the 
statute  specifies  otherwise,  be  at  the  date  of  death  and  no 
subsequent  change  can  affect  it. 

Hanberg  v.  Morgan,  263  111.  616;  105  N.  E.  720. 
Matter  of  Penfold,  216  N.  Y.  163;  110  N.  E.  497. 

1.  Where  the  Value  at  Death  Cannot  be  Ascertained. 

It  is  often  impossible  to  ascertain  the  value  at  the  date  of 
death.  A  claim  of  the  estate  may  be  involved  in  litigation, 
in  which  case  taxation  must  be  suspended. 

Matter  of  Westurn,  152  N.  Y.  93,  103;  46  N.  E.  315. 
Matter  of  Skinner,  106  App.  Div.  217;  94  Supp.  144. 

Or  the  claim  may  be  an  interest  in  the  estate  of  another 
decedent  which  has  not  yet  been  settled. 

An  interesting  question  recently  arose  under  such 
suspension  of  taxation  in  the  estate  of  Mary  D.  Daly,  which 
consisted  chiefly  of  her  interest  in  the  estate  of  her 
deceased  husband,  Augustine  Daly,  the  playwright. 

The  surrogate's  opinion,  reported  in  the  New  York  Law 
Journal  of  July  28,  1916,  is  in  part  as  follows : 

"An  order  was  entered  on  a  transfer  tax  appraiser's 
report  on  December  30,  1908,  which,  among  other  things, 


PART  IV  — THE  PROPERTY  263 

suspended  from  appraisal  and  taxation  decedent's  interest 
in  the  estate  of  Augustine  Daly,  her  deceased  husband. 
The  grounds  of  such  suspension  were  stated  to  be  that  the 
value  of  this  interest  was  not  then  ascertainable.  A  sup- 
plemental report  was  subsequently  filed  from  which  it 
appears  that  said  interest  was  valued  at  $82,530.48,  and 
that  the  date  of  accrual  was  therein  fixed  as  of  June  30, 
1914.  From  this  report  and  the  order  entered  thereon 
fixing  tax  the  executor  appeals.  The  principal  question 
involved  in  the  appeal  is  whether  the  value  of  the  interest 
above  referred  to  should  be  considered  as  of  the  date  of 
decedent 's  death  or  at  the  time  the  last  payment  was  made 
under  the  terms  of  which  the  said  two  estates  settled  their 
differences  and  which  was  the  date  designated  by  the 
appraiser  to  be  the  date  of  accrual.  In  view  of  the  fact 
that  at  an  earlier  date  it  was  impossible  to  fix  the  value 
of  the  decedent's  interest  in  her  husband's  estate,  we  must 
then  inquire,  what  was  the  date  at  which  the  value  of  this 
interest  could  be  ascertained!  Apparently  the  date  when 
the  parties  by  the  agreement  mentioned  made  the  last  pay- 
ment. This  payment  represents  the  value  of  decedent's 
interest  in  her  husband's  estate  at  the  time  of  her  death, 
although  at  that  time  not  ascertainable. ' ' 

2.  Real  Estate. 

The  assessed  value  for  ordinary  taxation  is  not  con- 
trolling on  the  market  value. 

McGhee  v.  State,  105  la.  9;  74  N.  W.  695. 

But  in  practice  a  wide  discrepancy  between  the  value 
fixed  by  an  expert  appraiser  and  the  assessed  valuation 
equalized  to  the  100  per  cent,  basis  would  require  explana- 
tion. 

When  obtainable  an  actual  bona  fide  sale  of  property  in 
the  vicinity  prior  to  death  is  the  best  evidence. 
Matter  of  Arnold,  114  App.  Div.  244;  99  Supp.  704. 


264  INHEKITAXCE  TAXATION 

It  is  the  equity  of  redemption  only  that  is  taxed  and 
mortgages  should  be  deducted  from  the  value  of  the  real 
estate. 

Matter  of  Sutton,  3  App.  Div.  208;  38  Supp.  277;  aff.  149  K  Y.  618; 
44  N.  E.  1128. 

And  this  is  so  even  when  the  will  directs  that  the  mort- 
gage be  paid  out  of  personalty. 

Matter  of  Offerman,  25  App.  Div.  94;  48  Supp.  993. 
Hatter  of  Murphy,  32  App.  Div.  627;  53  Supp.  1110;  affirming  on 
opinion  in  matter  of  Offerman,  aff.  157  N.  Y.  679;  51  N.  E.  1092. 

When  testator's  will  directs  that  a  mortgage  on  foreign 
real  estate  be  paid  out  of  local  personal  assets  it  was 
allowed  as  a  debt  of  the  estate  by  the  Surrogate's  court  of 
New  York  County. 

Matter  of  Hunt,  97  Misc.  233;  160  Supp.  1115. 

This  case  is  of  doubtful  authority,  for  it  has  long  been 
held  that  even  taxes  due  on  foreign  real  estate  are  not  a 
deduction  from  the  personal  assets. 
McElroy  on  the  Transfer  Tax  Law,  p.  488. 

The  theory  is  that  for  the  purpose  of  the  transfer  tax 
the  parties  interested  in  the  estate  take  their  interest  in 
the  property  in  the  form  it  had  at  the  death  of  the  decedent, 
and  no  direction  in  the  will  as  to  the  application  of  the 
personalty  for  the  benefit  of  the  realty  can  defeat  or  qualify 
the  rights  of  the  State  in  the  imposition  and  collection  of 
the  tax. 

Matter  of  Livingston,  1  App.  Div.  568;  37  Supp.  463. 
Matter  of  Boudouine,  5  App.  Div.  622;  39  Supp.  112L 
Matter  of  Kemp,  7  App.  Div.  609;  40  Supp.  1144;  aff.  151  N.  Y. 
619;  45  N.  E.  1132. 

While  sales  of  property  in  the  neighborhood  shortly 
prior  to  the  testator's  death  are  the  best  evidence  of  value 
the  price  for  which  the  property  itself  sells  after  death  is 
no  evidence  at  all  and  the  fact  that  it  sells  for  less  than 


PART  IV  —  THE  PROPERTY  265 

the  amount  of  the  appraisal  is  not  ground  for  modifying 
the  taxing  order. 

Matter  of  Meyer,  209  N.  Y.  386;  103  N.  E.  713. 
Matter  of  Barnum,  127  App.  Div.  418;  114  Supp.  33. 

The  uncontradicted  affidavit  of  an  expert  is  sufficient 
proof  of  value. 

Matter  of  Gale,  83  Misc.  686;  145  Supp.  301. 

The  interest  of  the  decedent  and  its  nature  must  be 
established  before  the  "appraiser  by  competent  evidence. 

Matter  of  Willets,  119  App.  Div.  119;  100  Supp.  850;  104  Supp. 
1150;  aff.  190  N.  Y.  527;  83  N.  E.  1134. 

Where  the  decedent  owned  an  undivided  interest  in  real 
estate,  subject  to  certain  mortgages,  a  discount  of  15  per 
cent,  was  allowed  by  the  appraiser  on  the  value  of  the 
interest  because  a  judicial  sale  would  be  necessary  to 
realize  on  it.  It  was  claimed  on  appeal  to  the  Surrogate 
that  the  deduction  should  be  made  of  the  15  per  cent,  the 
equity  of  redemption  after  the  amount  of  the  mortgage  had 
been  deducted ;  but  it  was  held  that  it  was  the  entire  prop- 
erty that  must  be  sold  and  not  the  equity  and  therefore 
that  the  deduction  from  the  entire  value  was  correct.  This 
was  reversed  by  the  Appellate  Division. 
Matter  of  Gilbert,  176  App.  Div.  850. 

An  instructive  case  in  the  valuation  of  fractional  inter- 
ests in  real  estate  arose  before  the  New  York  county  surro- 
gate in  Matter  of  Meyer  Loeb,  N.  Y.  Law  Journal,  Janu- 
ary 13,  1914:  "  This  is  an  appeal  from  an  order  fixing 
tax  upon  the  ground  that  the  appraiser  erred  in  his  valu- 
ation of  decedent's  real  estate.  An  expert  employed  by  the 
State  Comptroller  submitted  an  affidavit  giving  his  esti- 
mate of  the  value  of  certain  real  estate  of  which  the 
decedent  was  entitled  to  a  one-half  interest,  but  he  did  not 
give  the  value  of  the  one-half  interest.  On  behalf  of  the 
estate  an  affidavit  was  submitted  giving  the  opinion  of 
another  expert  as  to  the  value  of  the  one-half  interest.  It 


266  INHERITANCE  TAXATION 

appeared  from  the  evidence  of  this  expert  that  the  value 
of  the  one-half  interest  is  less  than  one-half  the  value  of 
the  entire  plot.  The  appraiser  disregarded  this  evidence 
and  ascertained  the  value  of  decedent's  one-half  interest 
to  be  one-half  the  value  of  the  entire  plot  as  appraised  by 
the  State  Comptroller's  expert.  This  was  incorrect,  as  the 
only  evidence  before  him  was  to  the  effect  that  the  one- 
half  interest  is  worth  less  than  one-half  the  value  of  the 
entire  plot.  The  order  fixing  tax  will  be  reversed  and  the 
appraiser's  report  remitted  to  him  for  the  purpose  of 
ascertaining  the  value  of  decedent 's  one-half  interest  in  the 
real  estate  of  which  he  died  seized. ' ' 

3.  Tangibles. 

a.  PICTURES. 

The  valuation  by  an  expert  as  of  the  date  of  death  was 
held  the  best  evidence  and  the  price  for  which  the  pictures 
actually  sold  ten  months  afterwards  was  held  not  com- 
petent. 

Matter  of  Anderson,  New  York  Law  Journal,  Dec.  20,  1916. 

b.  FURNITURE. 

An  instructive  decision  was  recently  made  by  the  New 
York  County  Surrogate's  Court  on  the  valuation  of  the 
collection  of  antique  furniture  owned  by  the  late  Richard 
Canfield,  formerly  of  Saratoga,  New  York,  but  at  the  time 
of  his  death  a  non-resident. 

The  Surrogate's  opinion  as  reported  in  the  New  York 
Law  Journal,  June  22,  1916,  is  as  follows : 

"  At  the  time  of  his  death  he  had  his  domicile  in  Rhode 
Island.  He  owned  a  collection  of  antique  furniture  which 
was  located  in  this  state  and  a  competent  appraiser  made 
an  affidavit  in  which  he  alleged  that  the  market  value  of 
such  furniture  at  the  date  of  decedent's  death  was  $65,175. 
Testimony  disclosed  that  this  furniture  was  sold  in  August, 


PABT  IV  — THE  PROPERTY  267 

1915,  for  $159,999,  and  the  appraiser  accepted  these  figures 
as  the  value  of  the  furniture  for  the  purposes  of  the  trans- 
fer tax.  The  affidavit  submitted  by  the  expert  employed  by 
the  estate  was  the  only  evidence  as  to  the  value  of  the 
furniture  at  the  date  of  decedent's  death.  The  State 
Comptroller  did  not  produce  testimony  to  show  that  the 
appraisal  by  the  expert  was  incorrect  but  relied  upon  the 
testimony  as  to  the  price  for  which  the  furniture  sold  in 
August,  1915.  *  *  As  the  only  competent  testimony 
submitted  to  the  appraiser  in  regard  to  the  value  of  the 
furniture  showed  that  its  market  value  at  the  date  of 
decedent's  death  was  $65,175  he  should  have  accepted  that 
valuation  and  not  the  price  at  which  it  was  sold  nine  months 
later.  The  decedent  also  owned  certain  porcelains  which 
were  appraised  by  the  expert  employed  on  behalf  of  the 
estate  at  $12,915.  The  appraisal  represented  their  value 
at  the  date  of  decedent's  death.  The  executor  submitted 
an  affidavit  showing  that  the  porcelains  were  sold  for  much 
less  than  their  appraised  value  but  the  transfer  tax 
appraiser  accepted  the  value  of  $12,915.  This  was  correct. ' ' 

c.     JEWELRY. 

In  Matter  of  Moore,  97  Misc.  238,  the  question  of  the 
value  of  the  stock  of  Tiffany  &  Co.,  was  in  question.  On 
this  subject  the  Surrogate  said: 

"  The  par  value  of  this  stock  is  $1,000  a  share  and  the 
appraiser  reported  that  its  market  value  at  the  date  of 
decedent's  death  was  $7,683.45  per  share.  The  stock  is  not 
customarily  bought  and  sold  in  the  open  market.  The  sale 
of  three  shares  in  1914  at  an  average  price  of  $5,570  a 
share  cannot  be  accepted  as  the  market  value  of  the  stock 
on  the  30th  of  March,  1914,  the  date  of  decedent's  death, 
as  the  record  does  not  show  the  circumstances  under  which 
the  sale  was  made.  The  appraiser  was  therefore  obliged 
to  rely  upon  the  statement  of  assets  and  liabilities  of  the 


268 

company  in  ascertaining  the  value  of  the  stock.  In  this 
statement  the  company  claims  that  the  sum  of  $2,300,000 
should  be  deducted  from  the  assets  as  a  reserve  fund. 
The  appraiser  allowed  a  deduction  of  $2,102,463.48  as  a 
reserve  against  depreciation  and  refused  to  allow  the 
other  reduction.  The  value  of  the  assets  represented  the 
cost  price  of  the  goods  purchased  by  the  company,  plus  the 
expenditures  made  for  labor  in  preparing  them  for  sale. 
The  reserve  for  depreciation  represented  the  amount  which 
the  company  considered  reasonable  as  a  reserve  fund  in 
view  of  the  fact  that  the  goods  sold  by  the  company  con- 
sist almost  exclusively  of  luxuries.  Nothing  is  more  fickle 
than  fashion  and  the  taste  in  luxuries.  The  design  or 
style  of  many  of  the  most  costly  articles  may  suddenly 
become  obsolete  and  necessitate  the  employment  of  con- 
siderable labor  and  expense  in  making  such  articles  con- 
form to  the  fashion  or  popular  taste  for  the  time  being. 

This  reserve  for  depreciation  is  therefore  a  reasonable 
deduction  from  the  assets  of  the  company;  but  for  the 
purpose  of  ascertaining  the  value  of  the  stock,  the  reserve 
maintained  against  possible  loss  by  theft,  smoke,  etc., 
should  not  be  deducted,  as  this  is  a  reserve  for  contin- 
gencies that  may  never  happen,  and  no  evidence  was  sub- 
mitted to  the  appraiser  to  show  that  the  company  had 
ever  lost  any  of  the  amount  reserved  for  contingencies. 
The  appraiser  therefore  was  correct  in  refusing  to  deduct 
this  special  reserve  of  $2,300,000  from  the  assets  of  the 
company. ' ' 

4.  Stocks. 

a.     ACTIVE  SECURITIES. 

When  the  securities  are  actively  dealt  in  on  the  market 
the  average  price  for  a  reasonable  period  prior  to  deatii 
is  the  best  measure  of  value. 

Matter  of  Crary,  31  Misc.  72;  64  Supp.  566. 


PART  IV  — THE  PROPERTY  269 

And  this  is  so  even  though  the  estate  holds  large  blocks 
of  stock  which  might  depress  the  price  if  sold  all  at  once. 

In  discussing  this  question  the  Illinois  court  says  in 
Walker  v.  People,  192  111.  106  at  page  110;  61  N.  E.  489: 

"  Fair  market  value  has  never  been  construed  to  mean 
the  selling  price  of  property  at  a  forced  or  involuntary 
sale.  The  very  fact  that  the  market  would  be  depressed 
by  forcing  such  large  blocks  of  stock  to  sale  indicates  that 
such  a  sale  is  not  a  proper  test  of  the  fair  cash  value  of 
the  stock  ....  The  quotations  of  the  stock  exchange 

may  be  temporarily  uncertain  and  untrustworthy,  if  the 
sales  thereon  are  suddenly  affected  for  speculative  pur- 
poses or  by  the  forcing  upon  the  market  and  to  sale  of  large 
blocks  of  stock  in  an  extraordinary  manner  with  no  explan- 
ation of  such  action  and  when  the  purpose  of  it  is  left  to 
the  conjecture  of  those  dealing  in  the  stocks;  but  such 
quotations  may  be  a  fair  and  safe  guide  when  they  are  taken 
for  a  reasonable  period  of  sales  made  in  the  usual  and 
ordinary  course  of  business." 

Walker  v.  People,  192  111.  106, 110;  61  N.  E.  489. 

The  same  rule  prevails  in  New  York.  The  court  said 
in  Matter  of  Gould,  19  App.  Div.  352 ;  aff.  as  to  this  point 
156  N.  Y.  423;  51  N.  E.  287: 

"It  is  claimed  however  that  the  rule  should  be  con- 
strued that  when  the  value  of  large  blocks  of  stock  is 
involved  only  the  purchase  and  sale  in  markets  of  cor- 
respondingly large  blocks  of  stock  should  be  considered, 
upon  the  theory  that  such  large  blocks  would  necessarily 
sell  at  lower  rates  than  small  quantities  of  stock  sold  separ- 
ately, and  that  throwing  large  blocks  of  stock  upon  the 
market  all  at  once  would  have  a  tendency  to  produce  a 
break  in  the  market  and  perhaps  an  inability  to  get  more 
than  a  mere  nominal  price  offered  for  that  stock.  Under 
the  construction  contended  for  the  securities  involved  in 
this  proceeding  might  have  been  shown  to  be  of  little  or 
no  value." 


270  INHERITANCE  TAXATION 

To  the  same  effect  is  People  v.  Coleman,  107  N.  Y.  541 ; 
14  N.  E.  431,  where  the  court  said : 

"  The  market  value  of  shares  of  capital  stock  may 
sometimes  be  above  and  sometimes  below  the  actual  value. 
Such  value  may  be  greatly  advanced  or  depressed  for 
speculative  purposes  without  any  change  in  the  actual 
value;  but  the  market  value  of  any  stock  which  is  listed 
at  the  Stock  Exchange  in  New  York  and  largely  dealt  in 
from  day  to  day  for  a  series  of  months  will  usually  fur- 
nish the  best  measure  of  value  for  all  purposes.  The 
competition  of  sellers  and  buyers,  most  of  them  careful 
and  diligent  to  take  account  of  every  thing  affecting  the 
value  of  the  stock  in  which  they  deal,  and  each  mindful 
of  his  own  interests  and  seeking  for  personal  gain  or 
advantage,  will,  almost  universally,  if  time  sufficient  be 
taken,  furnish  the  true  measure  of  the  actual  value  of  the 
stock." 

See  also 

Matter  of  Chambers,  155  Supp.  153. 
Matter  of  Kennedy,  155  Supp.  192. 

b.    INACTIVE  SECURITIES. 

A  problem  is  often  presented  where  the  corporation  has 
a  large  number  of  stockholders  and  extensive  properties 
and  yet  its  shares  are  seldom  dealt  in  on  the  market.  For 
example  many  railroads  which  are  branch  or  connecting 
lines  seldom  appear  in  the  quotations,  yet  it  would  be 
absurd  for  an  appraiser  to  undertake  a  valuation  of  their 
properties  for  the  valuation  of  a  few  shares  unless  the 
circumstance  of  incorporation  in  several  states  required 
it  under  the  rule  established  in  New  York,  Massachusetts 
and  New  Hampshire  as  to  the  Boston  and  Albany  and 
Fitchburg  roads.  Stock  in  National  banks  is  of  a  similar 
nature,  held  by  many  stockholders  yet  not  an  active  or 
speculative  security.  Such  corporations  are  not  to  be  con- 
fused with  the  incorporated  co-partnerships  or  "  family 


PABT  IV  —  THE  PROPERTY  271 

corporations  "  whose  securities  are  classed  as  "  closely 
held  stock."  Their  values  have  been  established  by  time 
and  publicity.  Published  financial  statements,  dividends, 
private  sales  and  opinion  evidence  afford  sufficient  means 
for  ascertaining  their  worth. 

c.     CLOSELY  HELD  STOCK. 

Obviously  the  market  price  cannot  determine  its  value 
—  for  often  there  is  no  market  price.  An  entirely  differ- 
ent method  must  be  employed  in  ascertaining  its  vahie  and 
in  such  a  case  the  fact  that  the  estate  holds  large  blocks  of 
the  stock  and  whether  it  could  be  sold  are  elements  to  be 
considered. 

Matter  of  Chappell,  151  App.  Div.  774;  136  Supp.  271. 

and  the  selling  price  of  a  few  shares  of  such  stock  is  of 
little  value  in  determining  the  actual  worth. 

Matter  of  Curtice,  111  App.  Div.  230;  97  Supp.  444;  aff.  185  N.  Y. 
543;  77  N.  E.  1184. 

Where  there  had  been  but  two  sales  in  six  months  held 
error  to  take  the  average  price. 

Matter  of  Malcolmson,  N.  Y.  L.  J.,  June  20,  1912. 

But  where  there  were  four  sales  though  not  on  the 
exchange  of  100  share  lots  shortly  prior  to  death  the 
evidence  was  held  to  establish  a  market  price  and  in  such 
a  case  it  was  error  to  take  evidence  of  book  value. 
Matter  of  Eugene  Pitou,  N.  Y.  L.  J.,  Feb.  14,  1914. 

It  was  error  to  value  the  stock  at  the  price  bid  on  the 
date  of  death,  the  average  price  fixes  the  market  value. 

Matter  of  J.  S.  Kennedy,  N.  Y.  L.  J.,  Mar.  8,  1911. 

And  of  course  it  must  be  the  price  bid  and  not  the  price 
asked  in  the  absence  of  actual  sales. 
Matter  of  Clark,  163  Supp.  972. 


272  INHERITANCE  TAXATION 

Evidence  of  sales  two  years  prior  to  death  is  too  remote. 

Natter  of  Valentine,  147  Supp.  231. 

In  the  absence  of  sufficient  evidence  of  market  price  the 
intrinsic  value  from  the  assets  and  debts  must  be  ascer- 
tained. 

Matter  of  Achelis,  N.  Y.  L.  J.,  March  9, 1912. 

The  entire  subject  of  the  valuation  of  such  stock  and 
the  kind  of  evidence  by  which  it  may  be  determined  was 
recently  illustrated  in  the  valuation  of  stock  in  the  Pabst 
Brewery  which  was  owned  almost  exclusively  by  its 
founder  and  his  family.  In  Pabst  v.  State,  139  Wis.  561 
the  court  says,  at  page  593: 

"  The  court's  finding  as  to  the  value  of  the  stock  in  the 
brewing  company  is  excepted  to  as  erroneous.  The  court 
found  the  value  of  the  brewing  company's  stock  on  June 
1,  1904,  the  date  of  the  decedent's  death,  to  be  $1,150  per 
share.  The  appraiser's  appointed  by  the  County  court 
reported  the  same  value  in  January  1905.  The  County 
court,  upon  the  trial,  valued  it  at  $1,408.45  per  share.  The 
face  value  is  $1,000  per  share.  The  law  requires  that  the 
tax  shall  be  assessed  upon  the  clear  market  value  of  the 
property.  It  appears  that  there  had  been  no  general  sales 
of  this  stock  in  the  market.  On  various  occasions,  when 
he  secured  stock  for  the  corporation  or  when  there  were 
dealings  between  members  of  the  family,  the  decedent  had 
dealt  with  this  stock  on  the  basis  of  its  book  value.  The 
transfers  shown  were  apparently  made  in  reliance  on  the 
book  value.  The  evidence  adduced  showed  the  dividends 
declared  and  paid  for  the  years  1896-1904  inclusive,  and 
the  value  of  the  corporation's  assets  from  1896  to  1904 
inclusive,  exclusive  of  the  good  will  of  the  business.  In 
the  deed  of  gift  decedent  declared  the  book  of  2,840  shares 
of  stock  to  be  $4,000,000.  These  items  of  evidence  were 
offered  as  the  best  proof  attainable  to  show  the  value  of 


PABT  IV  —  THE  PBOPEBTY  273 

the  stock.  They  were  evidences  of  value  though  they  were 
not  direct  and  general  tests  of  market  value.  Many  and 
various  reasons  are  assigned  why  the  evidence  adduced 
on  stock  value  fails  to  sustain  the  court's  findings  as  to 
the  value  of  the  stock.  These  contentions  are  based  on 
the  claims  that  dividends  have  been  small,  that  the  brew- 
ing plant  has  no  convenient  shipping  facilities,  that  the 
stock  transfers  and  value  of  the  corporation's  assets  as 
shown  on  the  books  are  not  reliable  criteria  because  they 
represent  no  more  than  the  decedent's  estimate  of  his 
business  and  because  there  are  no  proper  and  necessary 
deductions  for  depreciation,  losses,  decrease  in  business 
and  other  causes  incident  to  the  conduct  and  operation  of 
so  large  and  extensive  an  enterprise  and  its  holdings. 
Special  probative  force  is  claimed  for  the  opinion  evidence 
of  values  adduced  by  appellants  as  tending  to  show  that 
the  stock  is  worth  less  than  its  face  value.  After  giving 
full  effect  to  these  considerations,  we  cannot  say  that  the 
court  erred  by  over-estimating  the  actual  value  of  the 
stock.  The  facts  and  circumstances  regarding  the  business 
of  the  corporation  and  its  properties,  the  progress,  growth, 
and  general  financial  results,  furnish  a  basis  for  valua- 
tion. These  evidences  of  the  value  of  the  stock  are  suffi- 
cient to  sustain  the  conclusion  of  the  trial  court,  and  the 
findings  of  fact  on  this  branch  of  the  case  must  stand. ' ' 
State  v.  Pabst,  139  Wis.  561,  593;  121  N.  W.  351. 

The  cases  in  New  York  when  similar  questions  have 
arisen  follow  similar  lines. 

The  price  at  which  such  stock  was  appraised  in  another 
state  or  even  in  another  proceeding  is  not  competent 
evidence. 

Matter  of  Willmer,  75  Misc.  62;  134  Supp.  686;  aff.  153  App.  Div. 
804;  138  Supp.  649. 

Dividends  actually  paid  are  to  be  considered  but  are  not 
controlling. 

Matter  of  Smith,  71  App.  Div.  602;  76  Supp.  185. 


274  INHERITANCE  TAXATION 

Earning  power  is  a  factor. 

Matter  of  Brandreth,  28  Misc.  468;  aff.  169  N.  Y.  437;  62  N.  E.  563. 

The  rule  to  determine  the  value  of  closely  held  stock 
is  the  same  as  with  co-partnerships. 

Matter  of  McMullen,  92  Misc.  637;  157  Snpp.  655. 

Proof  of  profits  or  losses  after  death  not  competent. 
Matter  of  Demarest,  157  Supp.  653. 

When  the  business  must  be  sold  executor's  commissions 
should  be  deducted  in  determining  the  value. 
Matter  of  Weatherbee,  157  Supp.  652. 

The  market  value  of  merchandise  on  hand  and  bills 
receivable  should  be  considered. 

Matter  of  Hyman,  N.  Y.  L.  J.,  May  22,  1914. 

Book  value  may  be  a  basis  for  the  valuation.    Appraiser 
sustained  and  surrogate  reversed  where  it  was  followed. 
Matter  of  Valentine,  163  App.  Div.  843;  147  Supp.  1146. 

But  book  value  may  be  a  very  uncertain  criterion 
especially  if  the  concern  has  over-valued  its  assets  for 
purpose  of  securing  credit  or  "  insurance  purposes  "  as 
some  business  men  naively  put  it. 

The  learned  surrogate  who  was  reversed  in  the  Valen- 
tine case  soon  had  an  opportunity  to  point  this  out.  In 
Matter  of  Pancost,  89  Misc.  110;  152  Supp.  724,  he  says: 

11  This  appeal  by  the  executor  of  decedent's  estate 
brings  up  for  review  the  finding  of  the  appraiser  as  to 
the  value  of  the  shares  .of  stock  in  the  Jersey  City  Gal- 
vanizing Company  held  by  the  decedent  at  the  time  of 
his  death.  It  is  conceded  by  the  executor  that  the  state- 
ment of  assets  and  liabilities  of  the  company  which  is 
attached  to  the  appraiser's  report  is  a  correct  transcript 
from  the  books  of  the  company.  If  the  valuations  con- 
tained in  this  statement  were  correct,  the  book  value  of 


PART  IV  —  THE  PROPERTY  275 

the  stock  would  be  about  $186  a  share.  The  president  of 
the  company  testified,  however,  that  the  value  of  the  assets 
as  entered  on  the  books  of  the  company  was  not  correct, 
that  these  values  were  25  to  50  per  cent,  higher  than  the 
actual  values,  and  that  they  were  retained  on  the  books 
for  the  purpose  of  assisting  the  company  in  obtaining 
credit. 

"  When  the  corporation  wishes  to  obtain  credit,  it 
refers  to  its  books,  which  show  net  assets  of  $149,022,  or 
a  value  of  $186  a  share.  When  the  state  attempts  to  assess 
a  tax  upon  the  interest  of  a  stockholder  in  the  company, 
the  president  of  the  company  testifies  that  the  actual  value 
of  the  assets  is  about  50  per  cent,  of  the  book  value,  and 
that  the  value  of  the  stock  is  only  about  $50  a  share.  I 
regret  to  say  that  in  law  little  credence  can  be  given  to  the 
evidence  of  persons  who  make  such  admissions  of  deliber- 
ate misrepresentation.  There  may  be  extenuating  facts 
not  presented  of  record.  It  is  difficult  for  the  surrogate 
to  reconcile  the  conflicting  statements  of  value,  and  there- 
fore it  is  practically  impossible  to  arrive  at  a  valuation 
that  is  more  than  approximately  correct.  The  testimony 
in  regard  to  alleged  sales  of  stock  is  not  conclusive,  as  such 
sales  were  not  made  in  the  open  market,  and  the  price  at 
which  the  sales  were  made  five  years  after  the  date  of 
decedent's  death  cannot  be  taken  into  consideration  in  a 
proceeding  to  ascertain  their  value  at  the  date  of  his  death. 
I  cannot,  therefore,  find  from  the  evidence  in  this  matter 
that  the  appraiser 's  valuation  of  $125  a  share  is  excessive. 
The  order  fixing  tax  will  be  affirmed. ' ' 

The  uncertainties  incident  to  appraisal  on  the  basis  of 
book  value  were  again  illustrated  before  the  same  Surro- 
gate in  Matter  of  Bach,  147  Supp.  229  where  the  appraiser 
had  deducted  50  points  from  the  book  value  in  fixing  the 
market  value  of  the  stock.  The  surrogate  remitted  the 
report  with  directions  to  reduce  the  book  value  by  20 
points  instead  of  50. 


276  INHERITANCE  TAXATION 

On  another  occasion  lie  thus  states  the  difficulties  of  the 
situation:  "  From  the  decision  of  the  Appellate  Division 
I  do  not  feel  that  there  is  any  legal  principle  which  would 
enable  me  to  decide  that  the  appraiser's  valuation  of  the 
stock  held  by  the  decedent,  although  it  varies  considerably 
from  the  book  value,  is  incorrect." 
Matter  of  Frost,  N.  Y.  L.  J.,  May  1,  1914. 

In  Matter  of  Roos,  90  Misc.  521;  154  Supp.  939,  the  sur- 
rogate said: 

"  The  corporation  was  a  close  one.  The  stock  was  not 
listed  and  no  sales  of  it  had  ever  occurred  prior  to  the 
death  of  the  decedent  other  than  those  when  the  corpor- 
ation was  originally  formed.  Where  such  a  condition 
obtains  it  is  difficult  to  fix  the  value  of  the  stock,  and  it 
is  often  possible  to  get  at  it  only  by  ascertaining  the  value 
of  the  property  which  it  represents  (Matter  of  Jones,  172 
N.  Y.  575;  65  N.  E.  570),  and  even  then  it  can  be  ascer- 
tained only  with  reasonable  certainty  (Matter  of  Rees, 
208  N.  Y.  590,  affirming  order  of  surrogate  without 
opinion)." 

The  corporate  books  should  be  put  in  evidence. 
Matter  of  Crawford,  85  Misc.  283;  147  Supp.  234. 

Prices  quoted  on  a  local  exchange  are  competent  evi- 
dence though  the  stock  is  not  listed  or  dealt  in  elsewhere. 

Matter  of  Cook,  50  Misc.  487;  100  Supp.  628;  aff.  187  N.  Y.  253, 
262;  79  N.  E.  991. 

But  it  must  be  the  price  bid  not  the  price  asked. 
Matter  of  E.  S.  Clark,  N.  Y.  L.  J.,  Feb.  4,  1914. 

Evidence  of  actual  sales  about  the  time  of  death  may 
outweigh  the  report  of  a  financial  investigator. 
Matter  of  Newman,  91  Misc.  200;  154  Supp.  1107. 

Statements  of  earnings  of  the  company  after  death  are 
not  competent  evidence. 

•Matter  of  Blackwell,  N.  Y.  L.  J.,  Feb.  3,  1917. 


PABT  IV  —  THE  PROPERTY  277 

The  fact  that  the  decedent  was  a  minority  stockholder 
will  not  justify  a  valuation  of  shares  of  minority  stock 
at  less  than  the  value  of  the  shares  of  stock  in  the  hands 
of  a  majority  owner. 

Matter  of  Delafield,  N.  Y.  L.  J.,  Jan.  24,  1916. 

5.  Bonds. 

Such  securities  are  subject,  to  the  same  classification  as 
stock.  Though  less  frequently  dealt  in  their  rate  of 
interest  and  the  value  of  the  security  give  them  easily 
ascertainable  value  when  issued  by  public  corporations  or 
railroads.  On  the  other  hand  when  they  are  issued  by  a 
corporation  substantially  as  preferred  stock  some  exam- 
ination of  the  corporate  assets  may  be  advisable.  These 
questions  present  so  few  practical  difficulties  that  the  val- 
uation of  bonds  has  produced  little  or  no  litigation. 

6.  Pledged  Securities, 
a.    As  TO  THE  PLEDGOR. 

In  the  Matter  of  Pullman,  46  App.  Div.  574;  62  Supp. 
395,  the  court  said:  "  These  securities  are  liable  to  be 
resorted  to  by  the  creditors.  In  pledge  the  title  to  them 
is  in  the  pledgee  and  they  are  not  in  a  situation  to  be  taxed 
now  as  property  of  the  estate  of  Mr.  Pullman.  All  of  their 
amount  may  be  required  to  pay  the  debts  to  which  these 
bonds  and  stocks  are  collateral  and  the  creditors'  security 
should  not  be  diminished  at  this  time." 

In  Matter  of  Havemeyer,  32  Misc.  416;  66  Supp.  722,  the 
surrogate  took  a  similar  view: 

"  The  stock  deposited  by  the  decedent  with  his  brokers 
as  extra  collateral  for  the  loan  of  $600,000  was  not  the 
property  of  the  decedent,  but  formed  a  portion  of  an  estate 
created  by  the  decedent  under  a  valid  trust  instrument, 
the  terms  of  which  were  not  revocable  at  his  election, 
except  with  the  consent  of  the  beneficiaries  of  the  trust." 


278  INHERITANCE  TAXATION 

To  the  same  effect  is, 

Matter  of  Parsons,  51  Misc.  370;  101  Supp.  430;  aff.  117  App.  Div. 
321;  102  Supp.  168. 

But  when  the  executor  has  redeemed  the  securities  prior 
to  the  institution  of  the  tax  proceedings  they  are  taxable ; 
and,  in  any  event,  the  better  theory  is  that  the  equity  of 
redemption  is  always  taxable  though  taxation  should  be 
suspended  until  the  value  of  the  equity  can  be  ascertained. 
Matter  of  Hurcomb,  36  Misc.  755;  74  Supp.  475. 

b.     As  TO  THE  PLEDGEE. 

The  difficulties  that  will  result  from  the  theory  that  the 
title  to  the  securities  is  in  the  pledgee  become  apparent 
when  we  consider  the  taxation  of  the  obligation  the  prop- 
erty is  pledged  to  secure ;  and  the  rule  in  the  Pullman  case 
was  properly  ignored  by  the  surrogate  in  Matter  of  Gug- 
genheim, New  York  Law  Journal,  July  29,  1916.  In  this 
case  a  note  belonging  to  decedent  was  secured  by  collateral. 
The  note  was  for  $261,119.60;  and,  at  the  date  of  death, 
the  collateral  was  worth  $158,200.  The  note  was  not  due 
until  a  year  after  the  death  of  the  testator.  At  its  maturity 
the  value  of  the  collateral  had  diminished  and  it  was  then 
worth  only  $62,000.  This  was  all  that  was  realized  on  the 
note,  the  maker  being  irresponsible.  On  the  theory  of  the 
Pullman  case  the  appraiser  held  that  the  value  of  the  note 
was  measured  by  the  value  of  the  collateral  at  the  date  of 
death  and  appraised  it  at  $158,200.  On  appeal  to  the  sur- 
rogate it  was  held  that  the  title  to  the  collateral  was  not 
in  the  decedent  and  did  not  pass  to  his  estate ;  that  the  loss 
in  the  value  of  the  collateral  was  not  a  loss  of  the  estate ; 
and  that  the  value  of  the  note,  at  the  death  of  the  testator, 
was  its  value  as  finally  determined  by  the  amount  received 
on  the  sale  of  the  collateral,  at  the  maturity  of  the  note. 
The  value  as  fixed  by  the  appraiser  was  therefore  reduced 
from  $158,200  to  $62,000. 


PAET  IV  — THE  PROPERTY  279 

7.  Partnerships. 

Generally  the  valuation  of  co-partnership  property 
involves  the  same  problems  as  to  book  value,  earning 
power,  depreciation  of  assets  and  value  of  good  will  that 
are  involved  in  appraising  closely  held  stocks. 

The  title  vests  in  the  surviving  partner  and  all  that 
the  executor  can  claim  is  the  equitable  interest  in  the  sur- 
plus after  the  payment  of  all  debts. 

Williams  v.  Whedon,  109  N.  Y.  333;  16  N.  E.  365. 

A  special  partner  is,  in  a  sense,  a  creditor. 
Matter  of  Clark,  N.  Y.  L.  J.,  Feb.  9,  1912. 

An  agreement  between  partners  as  to  the  value  of  the 
co-partnership  interest  and  what  a  retiring  partner  shall 
have,  whether  the  retirement  be  by  death  or  otherwise, 
often  has  a  material  bearing  upon  the  valuation. 

Matter  of  Borden,  95  Misc.  443;  159  Supp.  346. 
Matter  of  Vivianti,  138  App.  Div.  281;  122  Supp.  954. 

But  an  agreement  that  the  surviving  partner  shall  take 
all  or  a  material  portion  of  the  assets,  or  may  buy  the 
decedent's  share  for  a  materially  lower  valuation  than 
it  is  worth  is  an  agreement  to  take  effect  at  death  and 
would  seem  to  be  taxable. 

Matter  of  Cory,  164  Supp.  956;  aff.  221  N.  Y.  mem. 

Matter  of  Orvis,  App.  ,  166  Supp.  126.     See  ante,  p.  98. 

Where  the  testator  bequeathed  to  his  partners  his 
interest  in  the  partnership  assets  on  condition  that  they 
pay  ninety  per  cent,  of  its  appraised  value  to  his  executors 
in  fifteen  equal  annual  instalments,  the  probate  court 
made  a  finding  that  the  inheritance  tax  should  be  fixed 
from  time  to  time  as  the  money  or  property  of  the  estate 
should  come  into  the  hands  of  the  executors  and  not  at  the 
present  value  of  future  payments  to  be  made  by  the 
partners. 

Port  Huron  v.  Wright,  150  Mich.  279 ;  114  K  W.  76. 


280  INHERITANCE  TAXATION 

A  recent  case  before  the  New  York  County  Surrogate's 
court  illustrates  some  of  the  difficulties  in  the  valuation  of 
co-partnership  assets  from  the  examination  of  the  firm 
books  by  an  accountant.  The  court  thus  criticises  the 
methods  adopted: 

"  The  decedent  was  a  member  of  the  firm  of  Milmine, 
Bodman  &  Company,  which  has  been  established  in  this 
city  for  more  than  thirty  years.  For  the  purpose  of 
enabling  the  appraiser  to  ascertain  the  value  of  decedent's 
interest  in  the  firm  an  affidavit  was  submitted  by  an 
accountant  in  which  he  states  that  the  figures  given  by  him 
in  relation  to  the  assets  and  liabilities  of  the  firm  are 
1  accurate  statements  from  the  books  of  the  co-partner- 
ship.' He  subsequently  states  that  deduction  ranging 
from  5  per  cent,  to  10  per  cent,  had  been  made  by  him  as 
depreciation  from  the  value  of  the  assets.  If  the  figures 
given  by  him  are  *  accurate  statements  from  the  books  of 
the  co-partnership,'  then  his  conclusion  as  to  the  value 
of  decedent 's  interest  is  incorrect,  because  he  fails  to  make 
any  deductions  from  the  figures  supposed  to  have  been 
taken  from  the  books  of  the  firm.  If  he  has  made 
the  deductions,  then  the  figures  given  by  him  cannot  be 
1  accurate  statements  from  the  books  of  the  co-partner- 
ship.' In  ascertaining  the  value  of  the  merchandise  on 
hand  the  accountant  has  taken  the  cost  price  of  wheat, 
barley,  oats  and  grain.  This  is  incorrect,  as  it  is  the 
market  price  of  the  merchandise  at  the  date  of  decedent's 
death  which  should  be  taken  in  ascertaining  the  value  of 
decedent's  interest  in  the  firm.  The  accountant  states 
that  there  is  no  good  will,  because  the  firm  does  not  do 
business  with  the  public.  This  statement  seems  to  be  incon- 
sistent with  accounts  receivable  of  $297,320  and  accounts 
payable  of  $191,247.93.  There  should  be  some  explanation 
of  these  items.  In  ascertaining  the  value  of  the  stock  of 
the  Eochester  Cold  Storage  and  Ice  Company  the  account- 
ant has  deducted  5  per  cent,  from  the  cost  price  of  the 


PART  IV  — THE  PROPERTY  281 

real  estate  owned  by  the  company.  This  is  incorrect,  as 
the  real  estate  should  be  appraised  at  its  market  value 
upon  the  date  of  decedent's  death.  The  value  of  the  mer- 
chandise owned  by  the  Bodman-McConaughy  Company  is 
given  at  $295,909.29,  but  it  is  not  stated  whether  that 
amount  represented  the  market  value  of  the  merchandise 
at  the  date  of  decedent's  death.  To  justify  the  appraiser 
in  appraising  at  $68,151.58  the  value  of  the  note  given  by 
the  Elk  Creek  Ranch  Company  to  the  decedent  for  $81,594.- 
71  there  should  be  a  verified  statement  of  the  assets  and 
liabilities  of  the  company  as  of  the  date  of  decedent's 
death.  The  appraiser's  report  will  be  remitted  to  him 
for  further  testimony  in  regard  to  the  matters  above 
referred  to." 

Matter  of  Bodman,  100  Misc.  390. 

As  to  Partnership  real  estate  the  rule  seems  well 
established  that  the  interest  of  the  deceased  co-partner, 
being  in  the  surplus  after  the  payment  of  debts,  is  per- 
sonalty. 

McFarlane  v.  McFarlane,  82  Hun,  238 ;  31  Supp.  272. 
Fairchild  v.  Fairchild,  64  N.  Y.  471. 
Van  Brocklen  v.  Smeallie,  140  N.  Y.  70. 
Matter  of  Straus,  N.  Y.  L.  J.,  Oct.  9,  1911. 

On  the  other  hand  it  has  been  held  that,  unless  the 
partnership  agreement  expressly  or  impliedly  refers  to  it, 
the  co-partnership  real  estate  retains  its  character  as 
realty  with  all  the  incidents  of  that  species  of  property 
between  partners  themselves  and  also  between  a  sur- 
viving partner  and  the  real  and  personal  representatives 
of  a  deceased  partner,  except  that  each  share  is  impressed 
with  the  payment  of  debts  and  obligations  of  the  partner- 
ship. 

H uber  v.  Case,  93  App.  Div.  479 ;  87  Supp.  663. 
Barney  v.  Pike,  94  App.  Div.  199;  87  Supp.  1038. 

Partnership  ownership  is  not  a  legal  joint  tenancy. 

Matter  of  Wormser,  51  App.  Div.  441;  64  Supp.  897. 


282  INHERITANCE  TAXATION 

Money  loaned  to  a  firm  by  one  of  the  co-partners  is  cap- 
ital invested  and  not  a  mere  co-partnership  interest,  sub- 
ject to  accounting.  It  is  to  be  valued  like  any  other  asset 
on  the  death  of  the  creditor. 

Matter  of  Probst,  40  Misc.  431;  78  Supp.  983. 

Where  a  partner  in  a  firm  invested  the  profits  with  the 
firm  and  transferred  this  account  to  his  wife  to  protect 
his  wife  from  his  creditors,  on  the  death  of  the  wife  a 
transfer  tax  should  be  assessed  against  the  fund  as  her 
property. 

Matter  of  Anthony,  40  Misc.  497;  82  Supp.  981. 

A  non-resident  decedent  sold  his  interest  in  a  New  York 
co-partnership  shortly  before  his  death  and  took  as  part 
payment  notes  of  the  firm  indorsed  by  the  continuing  part- 
ners. These  notes  matured  after  death  and  were  paid  by 
the  firm  to  the  widow  in  her  individual  capacity  who  made 
affidavit  that  the  deceased  owned  no  property  within  the 
state,  held  not  taxable  as  there  was  no  proof  the  notes 
belonged  to  decedent  at  the  date  of  his  death. 
Matter  of  Wallace,  149  Supp.  354. 

Profits  due  but  not  withdrawn  held  a  part  of  the  part- 
nership assets  and  to  be  taken  into  account  in  the  valua- 
tion of  the  interest  of  the  deceased. 

Matter  of  DuBois,  163  Supp.  668. 

Interest  on  capital  invested  by  retired  partners  should 
not  be  included  in  estimating  net  profits. 

Matter  of  Weatherbee,  N.  Y.  L.  J.,  Nov.  5,  1913. 

8.  Good  Will. 

a.     A  TAXABLE  ASSET. 

When  Dr.  Johnson  was  selling  the  Thrale  brewery  he 
made  the  famous  statement  that  it  was  not  the  material 
assets  that  he  was  putting  up  at  auction  but  "  The  poten- 
tiality of  growing  rich  beyond  the  dreams  of  avarice," 


PABT  IV  —  THE  PROPERTY  283 

and  though  the  Thrale  brewery  no  longer  has  any  good 
will  it  was  obviously  a  valuable  commodity  a  hundred  years 
ago. 

Good  will  consists  of  various  elements : 

1.  The  probability  that  old  customers  will  resort  to  the 
old  place. 

2.  Or  if  they  do  not  "  resort  "  that  they  will  continue  to 
be  customers. 

3.  The  advantage  of  continuing  on  established  business 
at  the  "  old  stand." 

4.  The   advantage   of  continuing   a   familiar  name   or 
style. 

5.  Reputation  and  prior  advertising. 

6.  Pattern,  styles,  trademarks. 

Austen  v.  Boys,  27  L.  J.  Ch.  714. 

People  v.  Roberts,  159  N.  Y.  70;  53  N.  E.  685. 

Kramer  v.  Old,  119  N.  C.  1,  25  S.  E.  813. 

Matter  of  Silkman,  121  App.  Div.  202;  105  Supp.  872. 

Where  a  business  was  carried  on  by  an  administratrix 
in  the  name  of  the  decedent  the  good  will  was  held  to  be 
an  asset  in  her  hands. 

Matter  of  Mullon,  74  Hun,  358;  26  Supp.  683. 

The  succession  to  the  good  will  of  a  decedent 's  business 
in  which  he  had  an  interest  is  therefore  a  taxable  transfer. 

Matter  of  Jones,  28  Misc.  356;  59  Supp.  983;  69  aff.  Div.  237;  74 

Supp.  702;  172  N.  Y.  575,  586;  65  N.  E.  570. 
Matter  of  Vivianti,  138  App.  Div.  281;  122  Supp.  954;  same  case, 

146  App.  Div.  942;  131  Supp.  1148;  aff.  206  N.  Y.  656. 
Matter  of  Keahon,  60  Misc.  508;  113  Supp.  926. 

b.     RULES  FOR  COMPUTATION. 

Good  will  is  elusive  and  in  the  nature  of  things  cannot 
long  endure  as  a  thing  apart  from  the  enterprise  and  effort 
of  the  successors.  While  no  hard  and  fast  rules  could  be 
applied  to  the  valuation  of  anything  so  ephemeral,  several 
elements  necessarily  are  to  be  considered. 


284  INHERITANCE  TAXATION 

The  accepted  method  for  computation  is  to  take  gross 
profits  of  the  business  for  a  number  of  years  prior  to 
death,  usually  at  least  three,  and  obtain  an  average,  after 
deducting  the  reasonable  value  of  the  services  of  the 
deceased  and  6%  interest  on  the  capital  invested. 
Matter  of  Ball,  161  App.  Div.  79;  146  Supp.  499. 

The  valuation  of  the  services  of  the  deceased  is  often  a 
vexatious  problem  as  the  only  testimony  obtainable  is 
from  those  interested  in  the  estate  who  are  apt  to  exag- 
gerate their  importance.  Much  depends  upon  the  nature 
of  the  business  and  how  well  it  is  established.  The  better 
established  the  business  the  less  any  one  man's  services 
are  worth  to  it  and  proportionately  the  greater  the  value 
of  the  good  will.  The  principle  is  justly  founded  but  its 
application  is  often  difficult. 

In  a  recent  case  the  New  York  surrogate  fixed  the  value 
of  the  services  of  the  decedent  at  one-half  the  net  annual 
profits  or  $11,500  although  he  only  drew  out  $5,000  a  year 
as  salary. 

Matter  of  Crerand,  N.  Y.  L.  J.,  June  30,  1914. 

The  valuation  of  the  capital  and  the  profits  must  be 
ascertained  from  the  balance  sheets  of  the  years  prior  to 
death ;  but  the  subsequent  balance  sheets  may  be  competent 
for  purposes  of  comparison. 

Matter  of  Hirschberg,  N.  Y.  L.  J.,  Nov.  20,  1914. 

c.    NUMBER  or  YEAR'S  PURCHASE. 

The  annual  value  of  the  good  will  thus  obtained  must 
be  multiplied  by  the  number  of  years  the  evidence  shows 
it  may  be  expected  to  continue.  In  the  absence  of  evidence 
to  the  contrary  three  years'  purchase  is  customarily 
allowed. 

Page  v.  Ratcliffe,  75  L.  T.  Rep.  371. 

Matter  of  Silkman,  121  App.  Div.  202;  105  Supp.  872. 


PABT  IV  — THE  PROPEBTY  285 

But  six  and  even  ten  years  *  purchase  have  been  held  not 
excessive  when  the  evidence  war  rants  it. 

' '  Our  courts  have  not  adopted  the  rigid  rule,  established 
by  the  English  courts,  of  limiting  the  value  of  good  will 
to  one  year's  purchase  of  the  net  annual  profits  of  the 
business  calculated  on  an  average  of  three  years  (Mellersh 
v.  Keen,  28  Beav.  453)  or  that  three  years'  net  profits  of 
a  business  arbitrarily  represents  the  value  of  its  good  will 
(Page  v.  Radcliffe,  75  L.  T.  Rep.  371),  but  on  the  contrary 
incline  to  the  more  equitable  rule  that  the  value  of  good  will 
may  be  fairly  arrived  at  by  multiplying  the  average  net 
profits  by  a  number  of  years,  such  number  being  suitable 
and  proper,  having  reference  to  the  nature  and  character 
of  the  particular  business  under  consideration,  and  the 
determination  of  such  proper  number  of  years  should  be 
submitted  to  and  determined  by  the  jury  as  a  question  of 
fact,  dependent  upon  the  evidence  before  them  in  each 
action. ' ' 

Von  Au  v.  Magenheimer,  115  App.  Div.  84-87;  100  Supp.  659. 

On  the  second  appeal  of  the  same  case  a  verdict  for  six 
years'  purchase  was  sustained  in  126  App.  Div.  257;  110 
Supp.  629. 

In  Matter  of  Moore,  97  Misc.  238;  162  Supp.  213,  the 
value  of  the  good  will  of  Tiffany  &  Co.,  was  involved  and 
the  surrogate  held  that  ten  years'  purchase  was  a  fair 
multiple.  He  said: 

"  The  appraiser  ascertained  the  value  of  the  good  will 
by  deducting  interest  at  the  rate  of  6%  per  annum  on  the 
capital  employed  by  the  company  in  its  business  from  the 
average  annual  net  profits  and  multiplying  the  difference 
by  ten.  This  gave  the  value  of  the  good  will  as  $1,507,- 
922.40.  No  exception  was  taken  to  the  amount  which  the 
appraiser  adopted  as  the  annual  average  net  profits;  but 
it  is  contended  that  the  value  of  the  good  will  should  be 
ascertained  by  multiplying  the  average  net  profit  by  three 


286  INHERITANCE  TAXATION 

or  five  instead  of  ten.  The  cases  in  this  country  are  not 
uniform  in  regard  to  the  number  of  years'  purchase  by 
which  the  average  annual  net  profits  may  be  multiplied  for 
the  purpose  of  determining  the  value  of  the  good  will. 
Most  of  the  American  cases  adopt  a  period  ranging  from 
two  to  six  years,  the  number  being  dependent  upon  the 
nature  of  the  business,  the  length  of  time  during  which 
it  has  been  established  at  a  particular  place  and  the  extent 
to  which  it  is  known  to  the  public." 

The  court  then  held  that  as  Tiffany  &  Co.  had  been 
established  for  more  than  sixty  years  and  had  an  excellent 
and  wide  reputation,  ten  years  purchase  used  by  the 
appraiser  was  not  excessive. 

In  the  Matter  of  Rosenberg,  114  Supp.  726,  it  was  held 
that  the  business  conducted  by  the  decedent  in  premises 
rented  by  the  month,  owed  much  of  its  value  to  the  con- 
fidence inspired  in  customers  by  the  presence  of  the 
decedent,  and  fixed  the  value  of  the  good  will  at  $800,  or 
two  years '  purchase  of  the  net  profits,  after  allowing  $2,000 
per  year  for  the  decedent's  services. 

The  firm  name  of  a  partnership  under  which  it  has  done 
business  for  many  years  does  not  belong  to  the  surviving 
partner,  but  is  a  part  of  the  good  ivill  of  the  firm,  and  sub- 
ject to  sale  in  the  same  way  as  other  firm  property. 
Slater  \.  Slater,  175  N.  Y.  143;  67  N.  E.  224. 

General  public  patronage  is  an  element  of  the  good  will. 
Boon  v.  Moss,  70  N.  Y.  465. 

In  Matter  of  Joseph  Pulitzer,  N.  Y.  Law  Journal,  Decem- 
ber 10,  1912,  Surrogate  Cohalen  in  remitting  the  report  of 
the  appraiser  said:  "Among  the  items  of  personal  prop- 
erty are  the  following:  Four  thousand  nine  hundred  and 
ninety  shares  of  the  Press  Publishing  Company,  par  $100 
per  share,  appraised  at  $604.50  per  share,  $3,016,455 ;  9164 
shares  of  the  Pulitzer  Publishing  Company,  par  $100  per 
share,  appraised  at  $121.75,  $1,115.717. 


PABT  IV  — THE  PROPERTY  287 

"Among  the  affidavits  submitted  to  the  transfer  tax 
appraiser  in  regard  to  the  value  of  this  stock  appears  one 
of  Mr.  N.  H.  Hotsford,  auditor  of  the  Press  Publishing 
Company,  publisher  of  the  New  York  World,  dated  Jan- 
uary 29,  1912,  in  which  he  states  that  the  net  profits  of  the 
Press  Publishing  Company  for  the  year  1908  were  $333,- 
673;  for  the  year  1909  were  $662.391;  for  the  year  1910 
were  $702,374;  for  the  year  1911  were  $552,883;  total 
$2,251,321.  From  this  net  total  the  appraiser  deducted 
$105,000  alleged  to  have  been  paid  as  bonuses  to  employees 
of  the  newspaper.  The  nature  of  these  bonuses,  whether 
gifts  of  contractual  obligations,  is  not  shown.  Assuming 
these  bonuses  to  have  been  voluntary  contributions  to  the 
employees  of  the  newspaper,  in  my  opinion  they  have  been 
erroneously  deducted,  and  the  net  profits  for  the  four  years 
should  be  placed  at  $2,251.321  instead  of  $2,146,321.  This 
would  make  the  average  net  profits  for  the  four  years  pre- 
ceding decedent's  death  $562,830.25  instead  of  $536,580,  as 
shown  in  the  report  of  the  transfer  tax  appraiser. 

In  Matter  of  Ball,  161  App.  Div.  79;  146  Supp.  499,  the 
court  said: 

"  This  good  will  is  property,  and  although  intangible, 
the  transfer  thereof  is  taxable  under  the  law  relating  to 
taxable  transfers.  (Tax  Law  [Consol.  Laws,  chap.  60; 
Laws  of  1909  chap.  62],  §§  220,  243,  as  amended  by  Laws 
of  1910  chap.  706,  and  Laws  of  1911,  chap.  732;  Godley 
v.  Crandall  &  Godley  Co.,  153  App.  Div.  697,  713;  139  Supp. 
236;  Matter  of  Dun,  40  Misc.  Rep.  509;  82  Supp.  802; 
Matter  of  Bellman,  174  N.  Y.  254;  66  N.  E.  809;  Matter  of 
Vivanti,  138  App.  Div.  281;  122  Supp.  954;  appeal  dis- 
missed, 204  N.  Y.  413).  The  determination  of  the  value  of 
this  intangible  property  is  always  difficult,  and  any  rule 
adopted  with  respect  to  the  same  must  of  necessity  be  more 
or  less  arbitrary.  In  Allan  on  the  Law  of  Goodwill  (p. 
85)  the  rule  is  thus  stated:  *  The  usual  basis  of  valuation 


288  INHERITANCE  TAXATION 

is  the  average  net  profits  made  during  the  few  years  pre- 
ceding the  sale.'  In  Mellersh  v.  Keen  (28  Beav.  453)  Sir 
John  Romilly,  Master  of  the  Bolls,  determined  that  '  the 
average  of  three  years'  annual  profits'  was  a  fair  basis  of 
value.  In  Page  v.  Ratliffe  (75  L.  T.  Rep.  [N.  S.]  371) 
Mr.  Justice  Stirling,  of  the  High  Court  of  Justice,  said: 
'  It  is  assessed  at  so  many  years'  purchase,'  and  in  fixing 
the  value  of  the  good  will  of  a  brewery,  he  added:  i  It 
seems  to  me  that  competition  and  a  desire  to  exclude  rivals 
in  trade  would  lead  a  brewer  to  give  not  less  than  three 
years '  profits. '  In  Von  Au  v.  Magenheimer,  115  App.  Div. 
84;  100  Supp.  659,  this  court  said,  speaking  through  Mr. 
Justice  Rich,  that  as  a  general  rule  '  the  value  of  good  will 
may  be  fairly  arrived  at  by  multiplying  the  average  net 
profits  by  a  number  of  years,  such  number  being  suitable 
and  proper,  having  reference  to  the  nature  and  character 
of  the  particular  business  under  consideration,'  and  that 
the  proper  number  of  years  is  not  a  question  of  law,  but 
one  of  fact.  In  the  same  case,  on  a  second  appeal,  126  App. 
Div.  257;  110  Supp.  629,  it  was  held  not  to  be  error  to 
refuse  to  charge  that  in  estimating  good  will  by  the  net 
profits  the  number  of  years  cannot  exceed  five.  In  Matter 
of  Keahon,  60  Misc.  Rep.  508;  113  Supp.  926,  the  value  of 
the  good  will  was  determined  by  multiplying  the  average 
net  profits  for  a  series  of  years  by  three.  In  Matter  of 
Silkman,  121  App.  Div.  202 ;  105  Supp.  872,  the  average  net 
profits  for  the  three  years  immediately  preceding  the 
testator's  death  was  ascertained,  and  this  sum,  multiplied 
by  two,  was  held,  under  the  circumstances  there  disclosed, 
to  be  a  fair  basis  of  computation. ' ' 

d.    WHEN  THE  PROFITS  ARE  SPECULATIVE. 

When  the  profits  for  the  three  years  prior  to  death  con- 
tain a  purely  speculative  element  the  speculative  profits 
must  be  excluded.  This  was  illustrated  in  Matter  of  Brush, 
N.  Y.  Law  Journal,  Aug.  14, 1915,  when  the  surrogate  said : 


PAST  IV  —  THE  PROPEBTY  289 

' '  The  sum  of  $265  a  share  was  fixed  as  the  value  of  the 
stock  of  the  National  Exhibition  Company.  The  appellant 
contends  that  this  stock  should  be  valued  at  a  higher  figure. 
The  principal  items  upon  which  said  valuation  appears  to 
have  been  based  was  the  lease  of  the  playing  ground  used 
by  said  company  and  the  earning  power  of  the  company. 
The  appraiser,  Mr.  Day,  has  sworn  that  the  lease  is  of  no 
value  except  as  used  for  its  present  purpose.  I  think  his 
conclusion  is  correct.  While  the  earning  power  of  the  com- 
pany for  the  years  1910,  1911  and  1912  shows  a  large 
return  upon  the  capital  invested  I  find  that  this  return  is 
by  no  means  certain  by  reason  of  the  fact  that  it  is  made 
up  largely  of  money  paid  by  the  public  to  see  the  post 
season  games  called  the  '  world's  championship  series.7 
The  New  York  Base  Ball  Club,  the  popular  name  for  the 
company,  cannot,  in  the  very  nature  of  things,  be  a  certain 
contender  in  this  series  every  year, —  no  more  than  any 
one  of  the  other  seven  clubs  which,  with  it,  make  up  the 
clubs  of  the  national  league  circuit.  Hence  the  financial 
returns  as  a  result  of  being  a  participant  in  the  world's 
championship  series,  are  so  completely  speculative  that 
they  must  be  entirely  left  out  of  consideration  in  analyzing 
the  earning  power  of  said  company." 

But  this  rule  does  not  apply  merely  because  of  the 
ordinary  uncertainties  and  hazards  of  commercial  enter- 
prises. As  the  same  surrogate  said  in  Matter  of  Daly, 
N.  Y.  Law  Journal  July  28,  1916: 

' '  The  uncertainties  of  the  theatrical  business  referred  to 
in  the  notice  of  appeal  and  which  the  appraiser,  it  is 
alleged,  failed  to  take  into  account,  are,  in  my  opinion,  no 
greater  than  those  of  any  other  business,  and  the  appraiser 
was  justified  in  disregarding  them." 

e.     WHEN  NO  PROFITS  ARE  SHOWN. 

An  important  case  on  this  question  went  to  the  Court 
of  Appeals  without  eliciting  an  opinion  all  along  the  line. 
10 


290  INHERITANCE  TAXATION 

The  question  involved  was  the  valuation  and  taxation  of 
the  good  will  of  the  copartnership  in  which  the  decedent, 
Klauber,  had  an  interest. 

On  the  26th  day  of  April,  1907,  Klauber,  Horn  &  Com- 
pany was  dissolved  by  the  retirement  of  Horn.  It  had  a 
good  will  concededly  valued  at  $300,000. 

On  the  following  day  the  firm  of  Klauber  Brothers  & 
Company  was  organized.  The  decedent  had  substantially 
a  half  interest  in  both  firms.  The  new  firm  had  only  been 
organized  six  months  when  Klauber  died.  It  had  made  no 
profits  simply  because  in  its  trade  there  is  a  buying  season 
when  it  is  all  outgo  and  a  selling  season  when  it  is  all 
income  and  the  first  six  months  were  in  the  buying  season. 
The  firm  name  was  not  retained ;  but  Klauber  Bros  &  Co. 
was  idem  sonans. 

The  new  firm  bought  and  the  old  firm  sold  to  it : 

11  The  business;  The  embroidery  stock;  Goods  in  the 
warehouse ;  Stock  in  the  lace  department ;  Bills  receivable ; 
The  furniture  and  fixtures;  The  lease  of  the  premises 
where  the  business  was  done ;  All  contracts  with  the  travel- 
ing salesmen  whose  services  were  retained;  Books  of  the 
old  firm ;  The  office  supplies :  All  samples ;  The  designs  and 
cartoons ;  And  the  agreement  further  provided  *  Only  the 
said  David  Klauber  and  Samuel  Klauber  shall  have  the 
right  to  make  these  designs,  and  no  direct  or  indirect  copy 
of  such  design  shall  be  made  by  the  said  Michael  Horn,  or 
by  any  of  his  agents.' 

There  wras  no  specific  mention  of  "  good  will  "  eo  nomine. 

The  Surrogate  merely  made  a  memorandum  that  the 
new  firm  did  not  buy  the  good  will  of  the  old  firm  and  had 
made  no  profits  itself;  so  there  was  no  good  will.  On 
appeal  the  Comptroller's  counsel  protested  that  a  good 
will  of  $300,000  in  value  had  thus  been  made  to  disappear 
over  night.  The  Appellate  courts  affirmed  without  opinion. 

Matter  of  Klauber,  N.  Y.  L.  J.,  M"ay  17,  1913.    Affirmed  without  opin- 
ion, 171  App.  Div.  908;  218  N.  Y.  607. 


PART  IV  —  THE  PROPERTY  291 

Austin  Nichols  &  Co.  was  incorporated  to  take  over  the 
business  of  a  partnership  of  the  same  name.  Preferred 
stock  was  issued  for  all  assets  but  good  will,  which  the 
common  stock  represented,  with  the  proviso  that  no  divi- 
dends should  be  paid  on  the  common  stock  unless  7  per  cent, 
was  paid  on  the  preferred  and  a  sinking  fund  of  $150,000 
set  aside  from  surplus  profits.  In  the  year  and  a  half 
after  incorporation  these  conditions  had  not  been  complied 
with  and  no  dividends  were  paid  on  the  common  stock. 
Held  that,  as  of  the  date  of  death  of  testator,  the  com- 
mon stock  had  no  value. 

Matter  of  Ormiston,  N.  Y.  L.  J.,  Aug.  14,  1915. 

From  all  of  which  it  might  appear  that  good  will  is  an 
ephemeral  commodity  and  that  partnership  agreements 
may  easily  be  so  drawn  as  to  avoid  its  taxation. 

These  latter  authorities,  however,  rather  illustrate  the 
"  anfractuosities  "  of  the  judicial  mind  than  well  con- 
sidered rules. 

Macaulay's  "  Johnson  "  Essays,  vol.  Ill,  p.  314. 

In  the  Matter  of  Gearge  A.  Hearn,  decided  by  Surro- 
gate Cohalan  of  New  York  County  in  July,  1917,  the  value 
of  the  dry  goods  firm  of  James  A.  Hearn  &  Son  was  valued 
at  more  than  twice  its  tangible  assets  and  five  years'  pur- 
chase was  sustained.  The  valuation  of  the  interest  of 
decedent  in  the  good  will  after  death,  under  a  copartner- 
ship agreement,  was  involved  and  is  interesting  and 
important.  On  this  the  opinion  speaks  for  itself  and  is 
given  in  full  as  follows : 

Estate  of  George  A.  Hearn. —  The  deceased  died  on  the 
1st  of  December,  1913.  The  executors  of  his  estate  con- 
tend that  the  transfer  tax  appraiser  erred  in  appraising 
at  $1,520,014.67  the  good  will  of  the  business  conducted  by 
the  decedent  and  others  under  the  name  of  James  A. 
Hearn  &  Son,  and  they  have  appealed  from  the  order 
entered  upon  the  appraiser's  report.  The  firm  of  James 


292  INHERITANCE  TAXATION 

A.  Hearn  &  Son  has  conducted  a  drygoods  business  on 
West  Fourteenth  street  in  this  city  since  1879.  In  1906 
new  articles  of  copartnership  were  entered  into  between 
George  A.  Hearn,  the  decedent,  and  three  others.  They 
provided  that  the  partnership  should  continue  until  March 
1,  1916.  In  the  preamble  to  the  partnership  agreement  it 
it  stated  that ' '  the  good  will  and  assets  of  James  A.  Hearn 
&  Son  of  every  kind  and  description  belong  to  and  are 
vested  in  George  A.  Hearn  individually."  The  articles 
of  copartnership  defined  the  interest  of  each  of  the  part- 
ners in  the  firm,  but  provided  that  the  death  of  either  of 
the  partners  would  not  cause  a  dissolution  of  the  firm. 
The  articles  further  provided  that  in  the  event  of  the 
death  of  either  of  the  partners,  except  George  A.  Hearn, 
before  the  expiration  of  the  partnership  by  time  limitation, 
the  interest  of  the  one  so  dying  would  be  the  amount 
standing  opposite  his  name  on  the  books  of  the  firm  at  the 
last  preceding  trial  balance,  plus  interest  at  the  rate  of 
five  per  cent.  Upon  the  death  of  George  A.  Hearn  it  was 
provided  that  his  interest  or  share  in  the  business  should 
continue  until  the  termination  of  the  partnership  by  time 
limitation.  Upon  such  termination,  his  executors  were 
authorized  and  empowered  to  purchase  the  interests  of 
the  other  members  of  the  firm  at  the  amounts  standing 
opposite  their  names  on  the  books  of  the  firm,  as  ascer- 
tained by  the  last  preceding  trial  balance.  It  is  apparent 
from  the  articles  of  copartnership  that  George  A.  Hearn 
never  parted  with  the  good  will  of  the  business  of  James 
A.  Hearn  &  Son,  and  that  the  other  partners  never 
acquired  any  right  to  such  good  will.  The  value  of  their 
respective  interests  in  the  business  was  determined  by  the 
partnership  agreement,  and  that  instrument  excluded  the 
value  of  the  good  will  when  providing  for  the  method  of 
ascertaining  the  value  of  their  interests.  Therefore, 
George  A.  Hearn  was,  at  the  time  of  his  death,  the  sole 


PAET  IV  — THE  PROPERTY  293 

owner  of  the  good  will  of  the  business  of  James  A.  Hearn  & 
Son.  This  good  will  was  transferred  and  disposed  of  by 
his  will.  In  appraising  the  value  of  the  good  will  the 
appraiser  found  that  the  average  annual  net  profits  for  the 
three  years  immediately  preceding  the  date  of  decedent's 
death  was  $366,710.18,  and  he  multiplied  this  amount  by 
2%  for  the  two  years  and  nine  months  immediately  prior  to 
the  date  of  decedent's  death,  the  result  being  $1,008,452.98. 
He  also  multiplied  the  average  annual  net  profits  by  2^ 
for  the  time  which  elapsed  between  the  death  of  the  dece- 
dent and  the  termination  of  the  partnership  by  time  limita- 
tion, and  took  62  per  cent,  of  the  result,  making  $511,561.69. 
He  then  added  this  amount  to  the  $1,008,452.89  previously 
ascertained,  and  the  sum  of  $1,520,014.67  he  found  to  be 
the  value  of  the  good  will.  The  appraiser  explains  that  he 
took  62  per  cent,  of  the  net  earnings  after  the  date  of 
decedent's  death,  instead  of  the  whole  amount,  because 
the  decedent's  interest  in  the  assets  of  the  firm  was  62 
per  cent.  The  value  of  the  good  will  constituted  an  asset 
of  the  decedent's  estate,  and  its  value,  like  that  of  any 
other  asset,  must  be  ascertained  as  of  the  date  of  his 
death.  The  decedent  at  the  date  of  his  death  was  the 
owner  of  the  entire  good  will,  and  not  62  per  cent,  of  it; 
and  it  was  the  value  of  the  entire  good  will  that  was  trans- 
ferred by  his  will.  There  was  therefore  no  legal  justifi- 
cation for  the  appraiser  in  calculating  the  good  will  on 
the  basis  of  62  per  cent,  from  the  date  of  decedent's  death. 
The  profits  earned  or  losses  sustained  after  the  date  of 
decedent's  death  cannot  be  taken  into  consideration  in 
ascertaining  the  value  of  the  good  will  (Matter  of  Silkman, 
121  App.  Div.,  203) ;  it  must  be  based  upon  the  net  profits 
for  the  years  preceding  the  date  of  decedent's  death.  The 
appraiser  multiplied  the  average  annual  net  profits  for 
the  three  years  immediately  preceding  the  date  of  dece- 
dent's death  by  five.  In  view  of  the  length  of  time  during 
which  the  business  has  been  established,  its  reputation,  its 


294  INHERITANCE  TAXATION 

extensive  advertising  and  its  prominence  in  the  drygoods 
trade,  I  think  five  years'  average  of  the  annual  net  profits 
is  a  reasonable  value  of  the  good  will  of  the  business  (Von 
Au  v.  Magenheimer,  126  App.  Div.,  257) ;  but  in  order  to 
ascertain  the  average  net  annual  profits  which  is  to  be 
multiplied  by  five,  a  period  of  at  least  six  years  imme- 
diately prior  to  the  date  of  decedent's  death  should  be 
taken  into  consideration.  The  average  annual  profits  thus 
ascertained,  multiplied  by  five,  would  represent  the  value 
of  the  good  will  of  the  business  of  James  A.  Hearn  &  Son 
at  the  date  of  the  decedent's  death,  if  his  executors  could 
sell  it  on  that  day.  The  articles  of  copartnership,  how- 
ever, provided  that  decedent 's  interest  in  the  firm  could  not 
be  sold  at  the  date  of  decedent's  death,  but  should  con- 
tinue until  the  termination  of  the  partnership  on  March 
1,  1916.  Therefore  the  value  of  the  good  will  at  the  date 
of  decedent's  death  would  be  the  sum  which,  if  invested 
at  five  per  cent,  on  that  day,  would  equal  on  March  1,  1916, 
the  amount  obtained  by  multiplying  the  average  annual 
net  profits  by  five.  The  appeal  of  the  executors  is  confined 
to  the  value  of  the  good  will,  no  question  being  raised  as 
to  its  distribution  under  the  terms  of  the  will  of  the  dece- 
dent. It  is  therefore  unnecessary  to  inquire  whether  the 
persons  who  were  partners  of  the  copartnership  which 
expired  on  March  1,  1916,  and  who  were  entitled  to  receive 
a  certain  number  of  shares  of  stock  in  the  corporation 
directed  to  be  formed  by  the  will  of  the  decedent,  are 
beneficiaries  of  a  part  of  the  good  will  and  their  interests 
taxable  accordingly.  The  order  fixing  tax  will  be  reversed 
and  the  appraiser's  report  remitted  to  him  for  correction 
as  indicated. 

C.— DEDUCTIONS 

In  order  to  ascertain  the  value  of  the  interest  trans- 
ferred which  is  subject  to  the  tax  we  must  not  only  con- 
sider the  assets  but  also  the  liabilities,  consisting  of  the 


PART  IV  —  THE  PROPERTI-  295 

debts  of  the  estate  and  the  expenditures  which  must  be 
deducted  in  order  to  ascertain  the  net  value  of  the  estate 
passing  to  the  heir,  devisee  or  distributee.  Dower,  curtesy, 
family  allowance,  homestead,  community  interest,  have  all 
been  considered  because  they  are  not  deductions  from  the 
estate  of  the  decedent  but  never  in  fact,  became  a  part  of 
that  estate. 

1.  Mortgages. 

As  to  mortgages  we  have  seen  that  they  are  to  be 
deducted  from  the  value  of  the  realty  on  the  theory  that  it 
is  the  equity  of  redemption  and  not  the  gross  value  that 
is  subject  to  the  tax. 

Matter  of  Button,  3  App.  Div.  208;  38  Supp.  277;  aff.  149  N.  Y.  618. 
Matter  of  Offerman,  25  App.  Div.  94;  48  Supp.  993. 
Matter  of  Murphy,  32  App.  Div.  627;  53  Supp.  1110;  aff.  157  N.  Y. 
679. 

A  direction  by  testator  to  pay  certain  mortgages  out  of 
personalty  does  not  authorize  the  appraiser  to  deduct  the 
amount  from  the  value  of  the  personal  estate. 

Matter  of  Berry,  23  Misc.  230 ;  51  Supp.  1132. 
Matter  of  DeGraff,  24  Misc.  147 ;  53  Supp.  591. 
Matter  of  Livingston,  1  App.  Div.  368 ;  37  Supp.  463. 
Matter  of  Maresi.  74  App.  Div.  76;  77  Supp.  76. 

Under  chapter  41,  New  York  Laws  1903,  mortgages  are 
deducted  from  appraised  value  of  the  real  estate. 

A  devisee  of  land  which  is  subject  to  a  mortgage  takes 
it  cum  onere,  and  the  equity  therein  is  only  liable  to 
taxation. 

Matter  of  Kene,  8  Misc.  102;  29  Supp.  1078. 

In  the  case  of  a  blanket  mortgage  covering  several  pieces 
of  realty  where  testator  has  made  an  apportionment 
on  sale  of  one  of  the  parcels  it  is  binding  on  the  executor 
and  hence  on  the  appraiser. 

Matter  of  Tremberger,  N.  Y.  L.  J.,  Oct.  31,  1913. 


296  INHERITANCE  TAXATION 

2.  Debts. 

Debts  of  the  decedent  are,  of  course,  to  be  deducted  from 
his  assets  in  order  to  ascertain  the  net  value  of  his  estate, 
but  what  of  the  personal  liability  of  the  obligation  on  a 
mortgage  bond? 

a.  LIABILITY  ON  MORTGAGE  BOND. 

This  was  recently  illustrated  in  the  Matter  of  Prentiss, 
N.  Y.  Law  Journal,  Dec.  2,  1916.  Here  a  decedent  had 
deeded  the  real  estate  to  his  wife  subject  to  a  mortgage 
which  she  did  not  assume.  After  holding  his  liability  on 
the  bond  a  debt  of  the  testator 's  the  surrogate  said :  '  *  But 
on  the  other  hand  the  matter  of  its  payment  must  be  viewed 
as  differing  from  the  payment  of  an  ordinary  debt,  for  the 
reason  that  in  all  likelihood  it  will  fall  upon  the  real  estate 
under  the  terms  of  the  mortgage.  In  view  of  this  I  think 
that  the  proper  disposition  of  the  appeal  is  to  suspend 
giving  to  said  bond  the  status  of  a  debt  until  its  value  is 
irrevocably  fixed  by  the  final  disposition  of  the  mortgage. ' ' 

Under  similar  circumstances  the  Surrogate  was  sus- 
tained when  he  refused  to  allow  the  obligation  on  the  bond 
as  a  deduction. 

Matter  of  Caiman,  100  App.  Div.  517;  91  Supp.  1095. 

See  also 

Matter  of  Skinner,  45  Misc.  559;  92  Supp.  972;  aff.  as  to  this  point, 
106  App.  Div.  217;  94  Supp.  144. 

b.  REPAIRS  TO  REAL  ESTATE. 

The  cost  of  repairs  to  real  estate,  like  mortgages,  is  a 
charge  on  the  land  and  is  not  to  be  deducted  from  the 
personal  assets  when  the  repairs  were  contracted  for  dur- 
ing the  lifetime  of  the  decedent  though  not  completed  until 
after  his  death. 

Matter  of  Baudouine,<5  App.  Div.  622;  39  Supp.  1121. 
Matter  of  Kemp,  7  App.  Div.  609;  40  Supp.  1144;  aff.  151  N.  Y. 
619;  45  N.  E.  1132. 


PAET  IV  — THE  PROPERTY  297 

Surrogate  Fowler  of  New  York  County  took  an  opposite 
view  in  Matter  of  Amsinck,  New  York  Law  Journal,  Feb. 
21,  1913,  but  possibly  the  decision  of  the  Court  of  Appeals 
in  the  Kemp  case  was  not  called  to  his  attention.  The 
value  of  the  betterments  should,  at  all  events  be  taken  into 
consideration  in  valuing  the  real  estate. 

• 

c.     DEBTS  PAID  BY  WILL. 
When  a  debt  is  forgiven  by  will  the  transfer  is  taxable. 

Matter  of  Bartlett,  4  Misc.  380;  25  Supp.  990. 
Matter  of  Wood,  40  Misc.  155;  81  Supp.  511. 
Matter  of  Hirsch,  83  Misc.  681 ;  145  Supp.  305. 
Matter  of  Michaelis,  N.  Y.  L.  J.,  Aug.  11,  1915. 
Matter  of  Tuigg,  15  Supp.  548. 

If  not  outlawed,  they  must  be  appraised  at  their  fair 
market  value  and  not  their  face  value. 

Morgan  v.  Warner,  45  App.  Div.  424;  60  Supp.  963;  aff.  162  N.  Y. 
612;  57  N.  E.  1118. 

If  the  debt  is  valueless,  that  is,  if  the  beneficiary  is 
financially  irresponsible  no  tax  is  imposed,  the  mental 
relief  of  a  bankrupt  in  having  one  score  out  of  many  can- 
celed not  being  regarded  as  a  taxable  commodity. 

Morgan  v.  Warner,  45  App.  Div.  424;  60  Supp.  963;  aff.  162  N.  Y. 
612;  57  N.  E.  1118. 

And  where  not  forgiven  they  must  be  deducted  from  the 
distributive  shares. 

Matter  of  Smith,  14  Misc.  169;  35  Supp.  701. 

"It  is  against  conscience  that  the  legatee  should  receive 
anything  out  of  the  fund  without  deducting  therefrom  the 
amount  of  that  fund  which  is  already  in  his  hands,  as  a 
debtor  to  the  estate." 

Smith  v.  Kearney,  2  Bart.  Ch.  533. 


298  INHERITANCE  TAXATION 

Cited  and  followed  in 
Leask  v.  Hoagland,  64  N.  Y.  159. 

And  such  debts  will  not  be  construed  as  advancements 
rather  than  loans  on  the  testimony  of  interested  parties  as 
against  written  evidence  of  the  obligation. 

Matter  of  Dormitzer,  N.  Y.  L.  J.,  Feb.  6,  1913. 
Matter  of  Bennington,  67  Misc.  363;  124  Supp.  829. 
Bruce  v.  Griscom,  9  Hun,  280;  aff.  70  N.  Y.  612. 
Erbeling  v.  Erbeling,  61  Misc.  537;  115  Supp.  894. 

A  more  serious  question  arises  when  services  have  been 
rendered  to  the  decedent  and  are  paid  for  by  will.  The 
payment  of  the  debt  by  will  is  taxable.  Shall  the  legatee 
who  accepts  the  payment  still  be  permitted  to  prove  the 
value  of  the  services  and  have  them  allowed  as  a  deduction? 
A  New  York  Surrogate  has  so  held,  though  the  decision  is 
of  doubtful  authority. 

Matter  of  Enos,  61  Misc.  594;  115  Supp.  863. 

In  this  case,  where  a  niece  had  rendered  services  to 
testatrix  and  the  latter,  after  the  usual  clause  relative  to 
the  payment  of  debts  and  funeral  expenses,  devised  all 
her  property  to  said  niece;  held,  that  the  value  of  niece's 
services  was  a  proper  deduction. 

The  contrary  was  held  in  Kansas. 

State  v.  Mollier,  96  Kan.  514;  152  Pac.  771. 

And  in  New  York,  where  a  testatrix  left  a  sum  of  money 
to  her  daughter-in-law  pursuant  to  an  agreement  thus  to 
compensate  her  for  supporting  her  husband  (the  son  of 
the  testatrix),  and  where,  after  the  death  of  the  testatrix, 
the  daughter-in-law  presents  a  claim  against  her  estate 
based  upon  the  agreement,  and  the  claim  after  having 
been  rejected  by  the  executor  is  established  and  paid,  the 


PART  IV  — THE  PROPERTY  299 

claimant  is  not  entitled  also  to  the  legacy  under  decedent's 
will  intended  by  her  to  carry  out  her  agreement. 

Matter  of  Embury,  19  App.  Div.  214;  45  Supp.  881;.  aff.  154  N.  Y. 
746;  49  N.  E.  1096. 

The  creditor  must  accept  the  legacy.  So  where  the  will 
directed  the  executors  to  pay  a  debt,  but  the  creditor 
proves  his  claim  as  a  debt  and  the  executor  pays  it  as 
such,  it  is  a  proper  deduction  from  the  decedent's  estate, 
and  the  amount  thereof  is  not  liable  to  a  transfer  tax 
(citing  Matter  of  Gould,  156  N.  Y.  423;  51  N.  E.  287),  and 
the  direction  in  the  will  was  a  sufficient  acknowledgment 
to  remove  the  bar  of  the  statute  of  limitations. 

Matter  of  Levy,  N.  Y.  L.  J.,  May  15,  1907;  aff.  122  App.  Div.  919; 
107  Supp.  1134. 

d.     DOUBTFUL  CLAIMS. 

A  debt  not  collectible  because  the  statute  of  limita- 
tions has  intervened;  or  where  the  statute  of  frauds  may 
be  interposed  as  a  defense,  should  not  be  deducted;  and, 
generally,  claims  should  not  be  allowed  as  deductions 
unless  they  can  be  proved  against  the  estate  and  payment 
enforced  if  resisted. 

Matter  of  Wormser,  36  Misc.  434;  73  Supp.  748. 

If  the  claim  against  the  estate  is  of  doubtful  validity  the 
question  of  deduction  should  be  postponed  until  the  doubt 
is  resolved. 

Matter  of  Dimon,  82  App.  Div.  107 ;  81  Supp.  428. 

Matter  of  Rice,  56  App.  Div.  253;  61  Supp.  911;  68  Supp.  1147. 

3.  Funeral  and  Burial  Expenses. 

These  are  allowed  as  deductions  provided  they  are 
"  reasonable." 

Matter  of  Ludlow,  4  Misc.  594;  25  Supp.  989. 
Matter  of  Millward,  6  Misc.  425 ;  27  Supp.  286. 
Matter  of  Liss,  39  Misc.  123;  78  Supp.  969. 


300  INHEBITANCE  TAXATION 

The  cost  of  a  monument  is  included. 

Matter  of  Edgerton,  35  App.  Div.  125;  54  Supp.  700  j  aff.  158  N.  Y. 

671;  52  N.  E.  1124. 
Matter  of  Black,  5  Supp.  452. 

Also  the  cost  of  a  cemetary  lot. 

Matter  of  Maverick,  135  App.  Div.  44;  119  Supp.  914;  aff.  198  N.  Y. 

618;  92  N.  E.  1084. 
Matter  of  Vinot,  7  Supp.  517. 

As  to  what  may  be  regarded  as  "  reasonable  "  in  such 
cases  there  is  very  little  authority.  Probably  the  * '  station 
of  life  "  rule  as  to  necessaries  is  applicable.  If  a  man  can 
afford  a  silk  dress  for  his  wife  why  not  a  "  wake  "  and 
a  mausoleum? 

When  the  expenditure  is  provided  for  in  the  will  the 
rule  seems  to  be  that  the  testator  is  the  best  judge  of 
what  he  can  afford  to  spend  on  himself  when  he  dies. 

Out  of  an  estate  of  about  $6,000  testator  devised  $2,000 
for  a  tombstone  and  burial  expenses;  held,  that  the  fact 
that  the  testator  designated  that  amount  is  a  presumption 
of  its  reasonableness ;  and  that,  as  the  sum  did  not  pass  to 
any  collateral  heir,  it  was  not  taxable. 
Morrow  v.  Durant,  140  la.  437;  118  N.  W.  781. 

4.  Administration  Expenses  and  Counsel  Fees. 

These  are  generally  allowed  as  a  deduction  within  the 
rule  of  "  reasonableness." 

Matter  of  Westurn,  152  N.  Y.  93-102;  46  N.  E.  315. 

A  counsel  fee  of  $5,000  where  the  personal  estate 
amounted  to  only  $14,270  held  unreasonable  and  dis- 
allowed. 

Matter  of  Thomas  J.  Kennedy,  N.  Y.  L.  J.,  Aug.  11,  1915. 

Counsel  fees  and  expenses  may  be  estimated  in  advance 
by  the  appraiser. 

Matter  of  Gould,  19  App.  Div.  352. 


PART  IV  —  THE  PROPERTY  301 

"  The  expenses  of  administration  are  imposed  as  a 
matter  of  law  and  are  caused  by  the  use  of  the  legal 
machinery  provided  by  the  state  to  wind  up  the  affairs 
of  deceased  persons,  and  cannot  ordinarily  be  avoided; 
hence  it  is  just  that  they  should  be  deducted  from  the 
valuation  of  the  estate." 

State  v.  Prolate  Court,  112  Minn.  279 ;  128  N.  W.  18. 

Administration  expenses  should  be  paid  out  of  the  per- 
sonal property  of  a  nonresident  within  the  state  if  it  is 
sufficient  to  meet  them  and  should  not  be  deducted  from 
the  value  of  the  real  estate.  This  is  important  in  the 
states  that  tax  only  the  tangibles  and  real  property  of 
nonresidents. 

Matter  of  Steele,  98  Misc.  180 ;  162  Supp.  718. 

The  tax  itself  is  not  an  expense  of  administration. 
Cliesney's  Estate,  1  Cal.  App.  30 ;  81  Pac.  679. 

5.  Discount  on  Legacy. 

Under  most  of  the  statutes  a  legacy  cannot  be  paid  until 
one  year  has  elapsed  —  or  longer  —  in  order  to  give  time 
for  advertising  for  debts  and  collecting  assets.  It  seems 
to  be  a  necessary  "  moratorium  "  for  the  settlement  and 
adjustment  of  the  affairs  of  the  decedent.  But,  as  the 
legacy  is  presently  taxable  at  its  value  at  testator's  death, 
many  attorneys  have  been  inclined  to  the  view  that  the 
present  worth  of  the  legacy  is  its  true  value;  in  other 
words,  that  its  taxable  value  should  be  its  discount  value. 

The  answer  to  this  argument  is  that  the  statutes  work 
out  practical  justice  by  charging  no  interest  on  the  tax 
during  the  "  moratorium,"  such  at  least  is  the  effect  of 
the  only  decisions  on  the  question  to  which  our  attention 
has  been  called. 

Matter  of  Hutter,  N.  Y.  L.  J.,  Dec.  3,  1914;  aff.  167  App.  Div.  930; 

152  Supp.  1119. 
Matter  of  Bird,  11  Supp.  891. 


302  INHERITANCE  TAXATION 

These  authorities  overrule  the  earlier  cases  in  which 
such  a  discount  was  allowed. 

Matter  of  Peck,  2  Con.  201;  9  Supp.  465. 
Matter  of  Underhill,  2  Con.  262;  20  Sup.  134. 

6.  Expenses  of  Litigation. 

a.  WHEN  TO  CONSERVE  THE  ESTATE. 

When  the  purpose  of  such  litigation  was  to  protect  and 
conserve  the  estate  such  expenses  are  allowed  as  a 
deduction. 

Matter  of  Gihon,  169  N.  Y.  443;  62  N.  E.  561. 

So  the  expense  of  preparing  for  trial  to  meet  objections 
filed  to  the  probate  of  the  will  may  be  deducted. 
Matter  of  Reed,  98  Misc.  102;  162  Supp.  412. 

11  The  successful  defense  of  the  attack  upon  the  validity 
of  the  will  was  in  the  interest  of  the  state,  as  the  recipient 
of  the  tax  on  the  bequest  to  the  college ;  and  we  think  that 
in  ascertaining  the  amount  upon  which  the  tax  should  be 
computed  the  expenditures  in  defense  of  the  will  should 
have  been  deducted,  so  that  the  tax  should  not  be  com- 
puted upon  it." 

Connell  v.  Crosby,  210  HI.  380,  391;  71  N.  E.  350. 

b.  DISPUTES  AMONG  THE  BENEFICIARIES. 

On  the  other  hand  litigation  caused  by  disputes  among 
the  heirs  or  distributees  as  to  the  value  of  their  interest 
is  not  a  proper  deduction. 

Matter  of  Thrall,  157  N.  Y.  46;  51  N.  E.  411. 
Matter  of  Sanford,  66  Misc.  395;  123  Supp.  284. 
Re  Lines'  Estate,  155  Pa.  St.  378 ;  26  A.  728. 

"  The  fact  that  the  appellants  were  put  to  expense  in 
asserting  their  rights  and  were  embroiled  in  expensive 
litigation  to  obtain  them  was  their  misfortune.  It  did  not 
diminish  the  value  of  the  interests  which  devolved  upon 
them  on  Westurn's  death.  It  was  a  loss,  but  a  loss  to 


PART  IV  — THE  PROPERTY  303 

their  general  estate.  It  did  not  prevent  them  receiving 
the  whole  interest  transmitted  to  them.  The  fact  that  the 
court  charged  certain  costs  and  allowances  in  their  favor 
upon  the  estate  did  not  change  the  situation.  It  was 
practically  a  charge  upon  their  own  property  for  the 
benefit  of  their  attorneys." 

Matter  of  Westurn,  152  N.  Y.  93 ;  46  N.  E.  315. 

So,  money  paid  to  secure  the  withdrawal  of  a  will  con- 
test is  not  allowed  as  a  deduction. 

Matter  of  Marks,  40  Misc.  507;  82  Supp.  803. 
Matter  of  Baldwin,  N.  Y.  L.  J.,  Aug.  21,  1912. 

7.  Taxes. 

a.     OTHER  INHERITANCE  TAXES. 

The  Federal  government  allowed  the  deduction  of  state 
inheritance  taxes  in  ascertaining  the  net  estate  but  many 
of  the  states  did  not  return  the  compliment  and  Sept.  1, 
1917  the  Treasury  Department  reversed  its  ruling  State 
taxes  not  being  deducted  hereafter.  Under  the  Federal 
inheritance  tax  of  1898  the  amount  due  the  government  was 
not  allowed  as  a  deduction  in  New  York. 

Matter  of  Gihon,  169  N.  Y.  443;  62  N.  E.  561. 

Matter  of  Irish,  28  Misc.  647. 

Matter  of  Ely,  149  Supp.  90. 

Matter  of  Hoyt,  86  Misc.  696;  149  Supp.  91. 

The  Appellate  Division,  First  Department,  in  Matter  of 
Bierstadt,  decided  July  15,  1917,  has  held  that  these 
authorities  apply  if  the  tax  is  construed  as  a  tax  on  the 
transfer,  as  was  that  of  1898,  and  that  if  it  is  construed  as 
a  tax  on  property  it  is  unconstitutional  and  therefore  not 
a  deduction.  For  further  discussion  see  U.  S.  statute, 
post,  p.  484  et  seq. 

Massachusetts  allowed  the  Federal  tax  of  1898  as  a 
deduction  and  will  probably  follow  the  same  rule  as  to  the 
present  tax,  if  it  is  held  constitutional. 
Hooper  v.  Shaw,  176  Mass.  190;  57  N.  E.  361. 


304  INHERITANCE  TAXATION 

Inheritance  taxes  imposed  by  other  states  are  not 
allowed  as  a  deduction. 

Matter  of  W.  H.  Pen/old,  216  N.  Y.  171;  110  N.  E.  499. 

But  when  the  devisee  dies  and  the  interest  is  subject  to 
two  inheritance  taxes,  on  two  devolutions  of  the  property, 
the  first  tax  is  allowed  as  a  deduction. 

Estate  of  Williams,  23  Cal.  App.  285;  137  Pac.  1067. 

b.     GENERAL  TAXES  AND  ASSESSMENTS. 

These  are  allowed  as  a  deduction  if  they  have  become  a 
debt  of  the  estate;  so  when  they  are  so  far  complete  that 
the  name  of  the  person  assessed  as  the  owner  cannot  be 
changed  or  altered  by  the  assessment  officers  they  are  to 
be  deducted. 

Matter  of  Hoffman,  42  Misc.  90;  85  Supp.  1082. 
Matter  of  Babcock,  115  N.  Y.  450;  22  N.  E.  263. 

If  they  are  assessed  during  the  lifetime  of  the  testator 
they  have  the  status  of  debts. 

Matter  of  Liss,  39  Misc.  123;  78  Supp.  969. 

Taxes  levied  subsequent  to  testator's  death,  but  assessed 
prior  to  his  death,  should  be  deducted  if  paid  by  the 
executors. 

Matter  of  Brundage,  31  App.  Div.  348;  52  Supp.  362. 

Taxes  due  at  death  of  decedent  are  payable  out  of  his 
personal  estate,  and  taxes  accruing  subsequently  are 
chargeable  to  the  land. 

Sedbury  v.  Bowen,  3  Bradf.  207. 

Griswold  v.  Griswold,  4  Bradf.  216. 

Smith  v.  Cornell,  111  N.  Y.  564;  19  N.  E.  271. 

Under  the  Greater  New  York  charter  the  assessment- 
roll  is  not  completed  until  the  amount  chargeable  against 
each  parcel  of  land  is  computed  and  set  down,  when  the 
lien  attaches  and  it  is  a  debt  and  therefore  deductible. 
Burr  v.  Palmer,  53  App.  Div.  358 ;  65  Supp.  1056. 


PAKE  IV  —  THE  PROPEBTY  305 

Accordingly  held  in  the  Matter  of  Maresi,  74  App.  Div. 
76;  77  Supp.  76,  that  where  testator  died  January  30, 
1901,  taxes  for  the  year  1900  are  not  deductible  from  his 
personal  estate  and  the  tax  was  not  a  lien  at  the  time  of 
death. 

When  the  assessors  had  valued  the  property  but  the 
assessment  roll  had  not  been  closed  or  the  amount  of  the 
tax  determined  it  was  held  that  the  tax  was  not  a  debt 
of  the  decedent  and  so  no  deduction  was  allowed. 

Matter  of  Freund,  143  App.  Div.  335;  128  Supp.  48;  aff.  202  N.  Y. 
556;  95  N.  E.  1129. 

Taxes  levied  against  the  personal  property  of  a  non- 
resident must  be  paid  out  of  that  property  and  are  not  a 
deduction  from  the  value  of  the  real  estate. 
Matter  of  Steele,  98  Misc.  180;  162  Supp.  718. 

Unless  they  are  a  personal  liability  of  the  decedent. 

Matter  of  Lennox,  N".  Y.  L.  J.,  June  11,  1908. 

8.  Commissions, 
a.     To  EXECUTORS. 

Practically  all  the  statutes  provide  that  'bequests  to 
executors  in  lieu  of  commissions  are  taxable  when  in 
excess  of  reasonable  compensation  and  all  the  authorities 
are  agreed  that  the  reasonable  or  statutory  commissions 
of  executors  are  to  be  allowed  as  a  deduction. 

Where  each  of  three  executors  received  a  full  commis- 
sion under  "the  N.  Y.  Code  (Sec.  2730)  three  commissions 
were  deducted. 

Matter  of  Van  Pelt,  63  Misc.  616,  118  Supp.  65. 

Where  securities  of  decedent  pledged  at  the  time  of 
his  death  as  security  for  payment  of  his  indebtedness 
are  sold  by  order  of  executors  and  the  proceeds  applied 


306  INHERITANCE  TAXATION 

to  the  payment  of  the  debt  the  executors  are  entitled  to 
commissions  on  the  gross  proceeds. 

Matter  of  Williams,  N.  Y.  L.  J.,  Oct.  2,  1914. 
Matter  of  Bolles,  67  Misc.  40 ;  164  Supp.  620. 

Where  securities  are  specifically  bequeathed  no  commis- 
sions are  allowed  on  their  value. 

Matter  of  Robinson,  37  Misc.  336;  75  Supp.  490. 

Matter  of  Kings  County  Trust  Co.,  69  Misc.  531;  127  Supp.  879. 

But  if  securities,  although  not  specifically  bequeathed, 
were  accepted  by  the  legatees  in  satisfaction  of  their 
legacies,  the  executors  would  be  entitled  to  full  commis- 
sions. 

Matter  of  Curtiss,  9  App.  Div.  285;  37  Supp.  626;  41  Supp.  1111. 

Property  held  by  decedent  as  trustee  should  not  be 
included  in  the  assets  of  the  estate  and  carried  as  a  debt, 
so  as  to  increase  the  amount  of  the  deduction  for 
executor's  commissions. 

Matter  of  Russell,  148  Supp.  272. 

If   the   executors    renounce    their   commissions    a   nice 
question  arises  as  to  whether  there  is  a  gift.    If  they  have 
accrued  the  executors  may  give  away  what  is  theirs  if  not 
the  commissions  revert  to  the  estate  and  are  taxable. 
Matter  of  Van  Rensselaer,  N.  Y.  L.  J.,  Oct.  11,  1912. 

The  decedent  was  a  resident  of  New  Jersey.  The  sur- 
rogate said: 

"  No  proof  of  the  law  of  New  Jersey  in  regard  to  the 
particular  time  at  which  executors  become  entitled  to  com- 
missions was  adduced  before  the  appraiser.  In  the 
absence  of  such  proof  it  will  be  presumed  that  the  law  of 
New  Jersey  on  this  question  is  the  same  as  our  law 
(Hynes  v.  McDermot,  82  N.  Y.  41;  Savage  v.  O'Neill,  44 
N.  Y.  298).  Our  courts  hold  that  an  executor  is  not 
entitled  to  commissions  until  such  commissions  have  been 


PAKT  IV  -  -  THE  PROPERTY  307 

ascertained  by  the  court  and  a  decree  entered  author- 
izing their  payment  (Wheelwright  v.  Rhodes,  28  Hun,  57; 
Freedman  v.  Freedman,  4  Redf.  211).  If,  therefore  the 
executor  of  the  decedent's  estate  renounced  his  right  to 
commissions  before  a  decree  of  the  Orphan's  Court  of 
New  Jersey  was  made  determining  the  amount  of  such 
commissions  and  directing  their  payment,  he  renounced 
something  to  which  he  was  not  actually  entitled  and  to 
which  he  never  became  entitled.  The  estate  was  not  dimin- 
ished by  the  amount  of  such  commissions,  because  they 
were  never  deducted  from  the  estate  and  had  never  become 
the  lawful  property  of  any  individual.  The  property 
passed  without  any  deduction  for  commissions  to  the 
legatee  mentioned  in  decedent's  will  and  upon  the  privi- 
lege of  succeeding  to  the  entire  amount  of  the  property 
so  transferred  a  tax  may  be  imposed. 

"  If,  however,  the  renunciation  was  made  after  the 
entry  of  the  decree  in  the  -Orphan's  Court  ascertaining 
such  commissions  and  directing  their  payment,  then,  as 
such  commissions  would  be  the  property  of  the  executor, 
his  renunciation  of  them  would  constitute  a  gift  of  the 
amount  of  such  commissions  from  him  to  the  legatee  and 
they  would  not  form  a  part  of  the  taxable  assets  of  the 
estate. 

b.    As  TO  TRUSTEES. 

Where  the  executors  are  also  made  trustees  under  the 
provisions  of  the  will  there  is  a  difference  of  opinion. 

In  Minnesota  it  is  held  that  when  the  executors  also 
become  trustees  the  commissions  as  such  trustees  are  not 
a  proper  deduction.  The  court  reasons  thus: 

"  Trusts,  however,  of  the  character  of  that  here  before 
the  court,  are  created  for  the  benefit  of  those  to  whom 
the  property  ultimately  passes,  are  of  voluntary  creation, 
and  are  intended  for  the  preservation  of  the  estate.  No 


308  INHERITANCE  TAXATION 

sound  reason  is  given  to  support  the  contention  that  such 
expenses  should  be  taken  into  consideration  in  fixing  the 
value  of  the  estate  for  the  purposes  of  this  tax, ' ' 
State  v.  Prolate  Court,  112  Minn.  279;  128  N.  W.  18. 

In  New  York,  when  the  duties  as  executors  are  distinct 
and  severable  from  the  duties  as  trustees,  two  commis- 
sions are  allowed;  but  if  not  distinct  and  severable  only 
one  commission. 

Matter  of  Collard,  161  Supp.  455. 

This  distinction  often  involves  nice  questions  in  the  con- 
struction of  wills. 

In  Matter  of  Ziegler,  168  App.  Div.  735,  743;  154  Supp. 
652;  aff.  218  N.  Y.  544,  the  court  said: 

' '  They  must  show  that  they  are  required  as  executors : 
first,  to  conserve  the  entire  estate  that  they  may  set  aside 
the  personal  property  in  one  fund  for  the  purposes  of  an 
express  trust  established  by  the  will;  and  the  administra- 
tion of  that  trust  must  be  separate  and  severable  in  both 
act  and  time  from  the  administration  of  the  estate  as 
executors;  and  finally  they  must  show  that  they  are 
directed  in  both  of  the  above  particulars,  distinctly, 
definitely  and  expressly,  or  by  fair  intendment,  by  the 
will  under  which  they  assume  to  act." 

But  the  commission  may  be  postponed  until  the  exe- 
cution of  the  trust. 

"  The  testator  here  established  a  trust  fund  in  the 
administration  of  which  no  executorial  duties  are  to  be 
performed.  The  executors  can  pay  this  fund  over  to  them- 
selves as  trustees  and  be  discharged  from  any  liability 
therefore  as  executors.  They  will  therefore  be  entitled 
to  receive  commissions  for  receiving  and  paying  out  this 
sum  as  executors  and  for  receiving  the  same  as  trustees. 
The  trustees  will  not  be  entitled  to  commissions  for  pay- 
ing out  this  money  until  the  termination  of  the  life  estate. 


PART  IV  — THE  PROPERTY  309 

This  commission  is  not  a  proper  charge  in  diminution  of 
the  value  of  the  life  estate." 

Matter  of  Vanneck,  175  App.  Div.  363;  161  Supp.  893. 
Matter  of  Cadwalader,  96  Misc.  404;  160  Supp.  523. 

When  the  amount  of  the  trust  estate  cannot  be  deter- 
mined until  the  executorial  duties  have  been  performed 
commissions  are  allowed. 

Matter  of  Blun,  176  App.  Div.  189;  160  Supp.  731. 

In  Matter  of  James  P.  Tuttle,  N.  Y.  Law  Journal,  June 
9,  1914,  Surrogate  Cohalen  held:  "  The  executors  appeal 
from  the  order  fixing  tax  and  allege  that  the  appraiser 
erred  in  refusing  to  deduct  trustees'  commissions  from 
the  assets  of  the  estate.  The  testator  directed  his  execu- 
tors to  pay  his  debts,  to  deliver  the  specific  legacies  and 
to  satisfy  the  general  legacies.  He  then  directed  that  his 
residuary  estate  be  held  in  trust  during  the  life  of  his 
wife.  It  is  obvious  that  the  duties  of  the  executors  and 
trustees  are  entirely  distinct  The  trustees  therefore  are 
entitled  to  commissions  upon  the  residuary  estate  (Laytln 
v.  Davidson,  95  N.  Y.  263;  Olcott  v.  Baldwin,  190  N.  Y. 
99;82N.  E.  748)." 

c.     ON  SALE  OF  REAL  ESTATE. 

When  there  is  a  mere  power  of  sale  of  real  estate  given 
by  the  will  and  no  direction  to  sell  or  necessity  for  sale 
no  commissions  on  the  real  estate  are  allowed  to  the 
executor. 

Matter  of  Grain,  98  Misc.  496;  164  Supp.  751. 

When  the  will  gave  power  to  sell  real  estate  but  the 
power  has  not  been  exercised  at  the  date  of  the  tax  pro- 
ceedings commissions  on  the  real  estate  are  not  allowed 
as  a  deduction. 

Matter  of  Steele,  98  Misc.  180 ;  162  Supp.  718. 


310  INHERITANCE  TAXATION 

Brokers  commissions  are  also  allowed  as  a  deduction 
when  the  sale  of  the  real  estate  is  necessary  to  the  due 
administration  of  the  estate. 

Matter  of  Sounders,  77  Misc.  54,  68;  137  Supp.  438;  aff.  156  App. 
Div.  891. 

9.  Family  Allowance. 

Sec.  2670  of  the  New  York  Surrogate's  Act  (Former 
Section  2713),  reads  as  follows: 

If  a  person  having  a  family  die,  leaving  a  widow  or 
husband,  or  minor  child  or  children,  the  following  articles 
shall  not  be  deemed  assets,  but  must  be  included  and  stated 
in  the  inventory  of  the  estate  as  property  set  off  to  such 
widow,  husband  or  minor  child  or  children: 

1.  All  housekeeping  utensils,  musical  instruments,  sew- 
ing machine  and  household  furniture  used  in  and  about 
the   house   and  premises,   fuel   and  provisions,    and   the 
clothing  of  the  deceased,  in  all  not  exceeding  in  value  five 
hundred  dollars. 

2.  The  family  bible,  family  pictures  and  school-books 
used  by  or  in  such  family,  and  books  not  exceeding  in 
value  fifty  dollars,  which  were  kept  and  used  as  part  of 
the  family  library. 

3.  Domestic  animals  with  their  necessary  food  for  sixty 
days,  not  exceeding  in  value  one  hundred  and  fifty  dollars. 

4.  Money  or  other  personal  property  not  exceeding  in 
value  one  hundred  and  fifty  dollars. 

Such  property  so  set  apart  shall  be  the  property  of  the 
surviving  husband  or  wife,  or  of  the  minor  child  or  chil- 
dren if  there  be  no  surviving  husband  or  wife.  No  allow- 
ance shall  be  made  in  money  or  other  property  under  sub- 
divisions one,  two  and  three  if  the  articles  mentioned 
therein  do  not  exist. 

Former  section  2713  amended  and  renumbered,  L.  1914,  chap.  443. 

Most  of  the  states  have  similar  statutes. 


PART  IV  —  THE  PROPERTY  311 

The  above  exemptions  are  allowed  as  deductions  in 
transfer  tax  proceedings. 

Matter  of  Libolt,  102  App.  Div.  29;  92  Supp.  175. 

But  the  allowance  is  in  kind  only,  the  money  value  can- 
not be  estimated  and  deducted. 

Matter  of  Baird,  126  App.  Div.  439;  110  Supp.  708. 
Matter  of  Stiles,  64  Misc.  658;  120  Supp.  714. 
Matter  of  Williams,  31  App.  Div.  617;  52  Supp.  710. 
Matter  of  Keough,  42  Misc.  387;  86  Supp.  807. 
Baucus  v.  Stover,  24  Hun,  109. 

10.  Pro  Rating  Debts. 

More  serious  problems  arise  in  taxing  the  transfer  of 
property  of  non-residents  within  the  state.  The  estate 
might  be  bankrupt  and  yet  there  might  be  no  local  credi- 
tors and  all  the  assets  might  be  within  the  state.  The 
general  rule  is  to  apportion  or  pro  rate  the  assets  and 
total  debts; 

Matter  of  Baylies,  148  Supp.  912, 

as  well  as  the  funeral  expenses,  commissions  and  other 
deductions : 

Matter  of  Porter,  67  Misc.  19;  124  Supp.  676;  aff.  148  App.  Div.  896. 

The  commissions  of  a  foreign  executor  are  estimated 
at  the  rate  paid  in  New  York  unless  there  is  proof  of  a 
different  allowance  in  the  state  of  domicile. 

Matter  of  Kennedy,  20  Misc.  531 ;  46  Supp.  906. 
Matter  of  La  Farge,  149  Supp.  535. 

"  Under  the  decision  in  the  Matter  of  Porter  (67  Misc 
19;  124  Supp.  676;  aff.  148  App.  Div.  896)  the  appraiser 
should  have  deducted  from  the  New  York  assets  the  debts 
due  to  residents  of  this  State  and  then  deducted  the  foreign 
debts  and  administration  expenses  in  the  proportion  which 
the  New  York  assets  bore  to  the  entire  assets  of  the 
estate." 

Matter  of  Yerkes,  N.  Y.  L.  J.,  Dec.  5,  1912. 


312  INHERITANCE  TAXATION 

a.  WHEN  THE  LOCAL  DEBTS  EXCEED  THE  LOCAL,  ASSETS. 
In  Matter  of  King,  71  App.  Div.  581;  76  Supp.  220;  aff. 

172  N.  Y.  616;  64  N.  E.  1122,  the  non-resident  decedent's 
interest  was  in  a  firm  which  manufactured  in  New  York 
and  had  a  branch  selling  office  in  Illinois,  hence  its  assets 
were  mainly  in  Illinois,  and  its  debts  in  New  York  and 
the  New  York  debts  exceeded  the  local  assets. 

The  court  said: 

"  However  desirous  we  may  be  to  give  a  liberal  con- 
struction in  order  to  uphold  a  levy  under  the  Transfer 
Tax  Act  (Laws  of  1896,  chap.  908,  art.  10,  as  amd.),  we 
think  there  is  an  insuperable  objection  to  sustaining  the 
tax  fixed  in  this  proceeding.  Ordinarily  on  the  death  of  a 
member  of  a  firm  the  legal  title  to  the  assets  of  the  firm 
vests  in  the  surviving  members,  and  what  is  left  to  the 
representatives  of  the  deceased  partner  is  the  right  to  an 
accounting.  (Williams  v.  Whedon,  109  N.  Y.  333;  16  N.  E. 
365.)  Assuming,  however,  but  not  deciding,  that  the 
decedent  had  a  property  interest  in  the  assets  of  the  firm 
in  this  State  which  is  subject  to  taxation,  we  find  it  impos- 
sible to  get  away  from  the  conclusion  that  as  against  such 
property  the  right  exists  to  deduct  the  debts  due  to  credi- 
tors in  this  State.  In  the  present  instance,  upon  the  con- 
ceded facts,  this  would  leave  no  balance  subject  to  tax- 
ation. A  tax  on  personal  property  of  a  non-resident  is 
one  which  the  State  imposes  based  upon  its  dominion 
over  the  property  situated  within  its  territory,  and  as 
such  property  is  liable  to  be  appropriated  for  the  pay- 
ment of  debts  therein,  we  fail  to  see  upon  what  principle 
the  latter  can  be  entirely  disregarded.  Here  it  is  con- 
ceded that  the  liabilities  of  the  firm  in  this  State  exhaust 
its  assets  in  this  State." 

b.  WHEN  THERE  ARE  LOCAL  ASSETS  AND  NO  LOCAL  DEBTS. 
Conversely  the  same  rule  was  applied  when  the  assets 

were  in  California  and  the  debts  in  New  York. 


PABT  IV  — THE  PROPERTY  313 

"  In  determining  the  value  fixing  the  amount  of  the 
inheritance  tax  payable  in  this  state  of  property  having 
its  situs  therein  which  passes  in  kind  to  the  residuary 
legatees  under  the  will  of  a  non-resident  testator  who  left 
no  creditors  in  this  state  and  whose  estate  in  his  state  of 
domicile  is  ample  to  pay  all  debts  and  expenses  of  admin- 
istration, no  deduction  should  be  made  from  the  actual 
value  of  the  property  of  any  portion  of  the  debts  proved 
or  expenses  incurred  in  the  state  of  the  testator's 
domicile. ' ' 

McDongald  v.  Low,  164  Cal.  107;  127  Pac.  1027. 

c.    WHEN  LOCAL  DEBTS  ARE  PAID  WITH  FOREIGN  ASSETS. 

In  Tennessee  it  is  held  that  to  secure  a  deduction  of 
debts  of  a  non-resident  due  local  creditors  it  must  be  shown 
that  they  were  paid  from  local  assets.  So,  when  a  resi- 
dent of  Mississippi  owned  property  in  Tennessee,  and 
owed  debts  there,  and  the  debts  were  paid  out  of  Missis- 
sippi assets,  no  deduction  was  allowed. 

Memphis  Trust  Co.  v.  Speed,  114  Tenn.  677,  691;  88  S.  W.  321. 

In  New  York  however  a  deduction  is  allowed,  notwith- 
standing the  fact  that  the  local  debts  were  paid  with  foreign 
assets.  The  court  reasons  thus: 

"  The  principle  applicable  to  this  taxation  is  different 
from  that  applicable  to  the  taxation  of  personal  property 
of  residents  of  this  state,  for  here  the  tax  is  not  against 
the  individual  or  against  the  particular  property,  but  is 
a  tax  upon  the  transfer  of  that  property,  and  it  is  only 
by  reason  of  the  transfer  of  the  specific  personal  prop- 
erty in  this  state  from  the  testator  to  his  legatees  that 
the  state  undertakes  to  tax,  and  when  nothing  actually 
passes  by  virtue  of  that  transfer  no  tax  is  imposed.  The 
Code  having  made  this  property  within  the  state  applic- 
able to  the  payment  of  the  debts  of  the  decedent  to  resi- 
dent creditors  the  fact  that  to  release  them  the  executor 


314  INHERITANCE  TAXATION 

brought  money  of  the  decedent  from  out  of  the  state  and 
paid  the  debts  so  that  the  securities  in  this  state  could  be 
transmitted  to  be  administered  at  the  residence  of  the 
decedent  cannot  make  any  difference  as  to  what  actually 
was  transferred  upon  which  a  tax  was  imposed. 

11  If  the  securities  had  been  sold  and  the  proceeds  used 
to  pay  the  debts  to  resident  creditors  there  could  be  no 
question.  The  executors  have  procured  the  money,  paid 
the  debts,  and  released  these  securities  from  the  liability 
for  his  indebtedness,  in  substance  purchased  the  securi- 
ties for  the  estate.  This  result  is  within  Matter  of  King 
(71  App.  Div.  581,  76  Supp.  220;  aff.  on  opinion  below, 
172  N.  Y.  616,  64  N.  E.  1122),  and  Matter  of  Western  (152 
Id.  93,  46  N.  E.  315).  There  it  was  held  that  what  was 
transferred  and  what  was,  therefore,  taxable  was  the 
amount  of  the  property  of  the  testator  less  his  debts." 

Matter  of  Grosvenor,  124  App.  Div.  331;  108  Supp.  926;  126  App. 
Div.  953;  111  Supp.  1121;  aff.  193  N.  Y.  652;  86  N.  E.  1124. 

d.    WHEN   THERE  ARE   BOTH  LOCAL,  AND  FOREIGN   DEBTS 

AND  ASSETS. 

* '  The  deduction  to  be  made  for  debts  owing  to  non-resi- 
dent creditors,  mortuary  expenses,  commissions  on  prop- 
erty without  the  state,  and  other  administration  expenses 
in  respect  to  such  property,  should  be  in  the  proportion 
which  the  net  New  York  estate  (after  all  deductions  are 
made  for  debts  owing  to  resident  creditors,  New  York 
commissions,  and  New  York  administration  expenses) 
bears  to  the  entire  gross  estate  wherever  situated." 

Matter  of  Porter,  67  Misc.  19;  124  Supp.  676;  aff.  148  App.  Div.  896; 

132  Supp.  1143. 

Matter  of  Browne,  127   App.  Div.   941;   111  Supp.  1111;   aff.  195 
N.  Y.  522;  88  N.  E.  1115. 

So,  where  the  appraiser  merely  deducted  from  the  New 
York  assets  the  expenses  of  administration  and  commis- 
sions allowed  by  the  laws  of  New  York  it  was  held  that, 


PART  IV  —  THE  PROPERTY  315 

he  should  also  have  deducted  the  proportion  of  the  debts 
due  to  non-residents  and  the  administration  expenses  in- 
curred in  the  state  of  decedent's  domicile  which  the  net 
New  York  assets  bear  to  the  entire  assets  of  the  estate 
wherever  situated. 

Matter  of  Kirtland,  94  Misc.  58 ;  157  Supp.  378. 

When  a  deceased  non-resident's  total  estate  was  $489,- 
393.27  and  his  tangible  assets  in  New  York  were  valued 
at  $50,040.30  and  he  owed  the  Vichy  Company,  a  French 
Corporation,  $129,617.24  on  a  contract  payable  in  New 
York,  the  executors  contended  no  tax  was  due;  but  the 
surrogate  held  the  debts  should  be  pro-rated  against  the 
entire  assets.  That  is,  as  about  1-11  of  the  assets  were 
taxable  in  New  York  they  should  be  charged  with  about 
1-11  of  the  debt. 

Matter  of  Raimbouville,  N.  Y.  L.  J.,  July  27,  1916. 

e.    As  TO  PARTNERSHIPS. 

When  partnership  debts  are  paid  out  of  partnership 
assets  no  deduction  allowed  from  individual  estate. 
Memphis  Trust  Co.  v.  Speed,  114  Tenn.  677;  88  S.  W.  321. 

The  whole  subject  was  exhaustively  considered  by  the 
New  York  County  Surrogate  in  the  Matter  of  Clark,  N.  Y. 
Law  Journal  Feb.  9,  1912.  The  decedent's  firm  had  its 
main  office  in  Boston,  with  branch  offices  in  New  York 
and  Chicago.  The  deceased  was  owner  of  7/10  of  the  firm 
assets.  The  New  York  assets  amounted  to  $94,306.88, 
there  were  New  York  debts  of  $26,174.65  and  then  there 
was  a  special  partner,  residing  in  -New  York,  who  had 
$100,000  invested  in  the  firm.  In  dealing  with  the  problem 
thus  presented  the  court  said : 

"  It  is  true  that  the  legal  title  to  the  partnership  prop- 
erty in  this  state  vested  upon  the  death  of  the  decedent 
in  the  surviving  partners  for  the  purpose  of  liquidation 


316  INHERITANCE  TAXATION 

and  that  the  right  of  the  legal  representatives  of  the 
deceased  partner  in  the  assets  was  an  equitable  right  to 
the  decedent's  share  of  what  was  left  after  payment  of 
the  partnership  debts.  (Reinliardt  v.  Reinhardt,  134  App. 
Div.  440;  119  Supp.  285.  Joseph  v.  Herzog,  198  N.  Y.  456, 
92  N.  E.  103) ;  but  it  is  alleged  in  the  affidavit  submitted 
by  the  executors  that  the  net  value  of  the  partnership 
assets  in  this  state  was  the  sum  of  $94,306.88  and  that  the 
legal  representatives  of  the  decedent  were  entitled  to  seven- 
tenths  of  this  amount,  subject  to  any  claims  of  partnership 
creditors  in  other  states  which  remained  unsatisfied  after 
the  application  of  the  partnership  property  in  those  states 
to  the  payment  of  the  partnership  indebtedness.  When 
the  value  of  this  interest  was  actually  ascertained  and 
definitely  determined  its  transfer  became  taxable  in  the 
same  manner  and  to  the  same  extent  as  if  the  property 
had  belonged  to  the  decedent  individually  at  the  time  of 
his  death  (Matter  of  Clinch,  180  N.  Y.  300,  73  N.  E.  35). 
For  the  purpose  of  ascertaining  the  value  of  this  interest 
debts  due  by  the  partnership  to  New  York  creditors  must 
first  be  deducted  from  the  firm  assets  located  here  (Matter 
of  King,  71  App.  Div.  581,  76  Supp.  220  aff'd  172  N.  Y. 
616,  64  N.  E.  1122).  There  does  not,  however,  seem  to  be 
any  authority  for  holding  that  the  general  indebtedness 
of  a  partnership  to  creditors  in  different  states  should 
all  be  deducted  from  the  New  York  assets ;  it  would  seem 
to  be  more  equitable  and  reasonable  to  deduct  from  the 
net  assets  in  New  York  that  proportion  of  the  general 
indebtedness  of  the  partnership  to  foreign  creditors  which 
the  New  York  assets  bear  to  the  entire  assets  of  the  part- 
nership (Matter  of  Porter,  67  Misc.  19;  124  Supp.  676;  aff. 
148  App.  Div.  896, 132  Supp.  1143). 

"  The  executors  also  contend  that  the  contribution  of 
the  special  partner  constitutes  an  indebtedness  of  the  firm 
to  a  New  York  creditor,  and  that  the  amount  should  be 


PART  IV  —  THE  PROPERTY  317 

deducted  in  full  from  the  New  York  assets.  A  special 
partner  in  a  limited  partnership  is  not  entitled  to  pay- 
ment of  his  contribution  until  the  claims  of  all  the  partner- 
ship creditors  are  satisfied  (§  37,  Partnership  Law),  and 
if  payment  is  made  to  him  after  dissolution  of  the  firm, 
but  before  all  the  creditors  are  paid,  the  amount  so  paid 
to  him  may  be  reached  by  a  creditor  of  the  partnership 
who  has  exhausted  his  remedies  against  the  partnership 
assets  (Fuhrmann  v.  Von  Pustau,  126  App.  Div.  629;  111 
Supp.  34).  The  interest  of  a  special  partner  is  not  strictly 
a  debt  at  all  (Harris  v.  Murray,  28  N.  Y.  547;  Hayes  v. 
Meyer,  35  N.  Y.  226).  Up  to  the  time  of  dissolution  a 
special  partner  is  not  a  creditor  of  the  firm  in  any  sense 
(Matter  of  Price-McCormick  Co.,  69  App.  Div.  37 ;  74  Supp. 
624).  It  would  therefore  appear  that  the  special  partner 
is  not  a  New  York  creditor  within  the  meaning  of  the 
decision  in  the  Matter  of  King  (supra)  directing  that  debts 
due  to  New  York  creditors  should  be  deducted  in  full  from 
New  York  assets  for  the  purpose  of  ascertaining  the  value 
of  decedent's  interest  in  the  copartnership." 

11.  Marshaling  Assets  to  reduce  Tax. 
a.     WHEN  THE  EXECUTOR  CAN  DO  so. 

It  was  for  a  long  time  held  in  New  York  that  a  foreign 
executor  might  so  marshal  the  assets  of  the  estate  that 
legacies  to  collaterals  and  strangers  would  be  paid  out 
of  foreign  assets  and  so  escape  the  higher  rate  of  tax, 
leaving  the  New  York  assets  to  pass  to  lineals  and  exempt 
corporations. 

In  Matter  of  James,  144  N.  Y.  6;  38  N.  E.  961.  The 
court  said: 

"The  property,  which  the  testator  died  possessed  of  in 
Great  Britain,  is  largely  in  excess  of  the  amount  given  by 
him  in  legacies.  Some  portion  of  them  has  already  been 
paid  from  the  English  estate  and  the  executor  has  declared 


318  INHERITANCE  TAXATION 

his  determination  of  appropriating  that  part  of  the  testa- 
tor's property  to  their  payment;  so  that  the  American 
estate  shall  constitute  the  residuary  estate,  disposed  of  by 
the  will  in  favor  of  the  testator's  brothers.     This  he  may 
rightly  do  and  thus  save  the  estate  from  the  payment  of 
the  succession  tax  imposed  by  our  laws." 
To  the  same  effect  is: 
Matter  of  McEwan,  51  Misc.  455 ;  101  Supp.  733. 

This  has  been  followed  in  recent  years  in  Tennessee 
and  Illinois. 

The  Tennessee  statute  exempts  a  widow.  The  widow 
of  a  non-resident  owning  personal  property  within  Ten- 
nessee elected  to  take  that  property  as  her  half  and  the 
court  held  she  could  do  so,  citing  Matter  of  James,  144 
N.  Y.  6;38N.  E.  961. 

Memphis  Trust  Co.  v.  Speed,  114  Tenn.  677;  88  S.  W.  321. 

So  it  is  held  in  Illinois  that  an  Illinois  executor  cannot 
be  compelled  from  the  residuary  estate,  or  from  his  per- 
sonal funds,  to  pay  inheritance  taxes  assessed  by  the 
County  court  on  bequests  made  to  non-resident  benefici- 
aries whose  bequests  have  been  paid  by  an  ancillary  execu- 
tor out  of  proceeds  -of  sales  made  by  him  under  the  will 
and  approved  by  a  court  of  a  foreign  state,  of  real  estate 
in  such  state.  The  court  said: 

11  It  was  the  proper  exercise  of  a  sound  discretion  by 
those  representing  the  benevolent,  charitable  and  other 
similar  institutions  in  Ohio  to  elect  to  take  their  legacies 
from  proceeds  of  real  estate  in  that  state  and  so  give  the 
institutions  they  severally  represented  the  benefit  of  the 
laws  of  that  state  exempting  such  legacies  from  the  suc- 
cession tax  according  to  the  laws  of  that  state.  It  would 
be  inequitable  to  require  payment  of  the  tax  by  the  execu- 
tor from  his  personal  funds  or  from  the  residuary  estate 
in  view  of  our  conclusion  that  the  action  of  the  Ohio  bene- 


PART  IV  —  THE  PROPERTY  319 

ficiaries  of  Barber's  will  was  lawfully  taken  and  relieved 
the  funds  bequeathed  to  them  from  the  operation  of  the 
inheritance  tax  of  the  laws  of  Illinois." 

People  v.  Kellogg,  268  111.  489,  501;  109  N.  T.  304. 

b.     WHEN  HE  CANNOT. 

In  New  York  the  rule  no  longer  obtains.  It  was  first 
modified  in  Matter  of  Ramsdill,  190  N.  Y.  492;  83  N.  E.  584. 
Where  a  distinction  was  made  in  cases  of  intestacy.  The 
court  said: 

11  When  a  specific  foreign  legatee  of  a  foreign  testator 
can  obtain  satisfaction  of  his  legacy  in  a  foreign  juris- 
diction, the  executor  cannot  be  compelled  to  pay  such  a 
legacy  out  of  the  assets  within  our  jurisdiction.  This  is 
the  necessary  result  of  the  practical  and  obvious  distinc- 
tion between  testacy  and  intestacy  as  applied  to  this  sub- 
ject of  taxation.  If  a  specific  legatee  needs  not  the  inter- 
vention of  our  laws  or  courts  to  obtain  what  comes  to 
him  under  a  foreign  will  through  foreign  assets,  in  a  for- 
eign jurisdiction,  our  laws  cannot  coerce  an  executor  into 
paying  his  legacy  out  of  funds  within  our  jurisdiction  for 
the  sole  purpose  of  exacting  a  tax. 

11  But  in  a  case  of  intestacy  the  rule  is  essentially  dif~ 
ferent,  because  the  distributee  takes  an  undivided  interest 
in  the  whole  estate ;  and  if  part  of  it  happens  to  be  within 
our  jurisdiction,  he  can  only  get  his  share  of  what  is  here 
under  our  laws  and  through  our  courts.  This  is  the  theory 
upon  which  the  nephews  and  nieces  of  the  intestate  in  the 
case  at  bar  are  clearly  taxable  under  our  statute." 

By  chapter  310  L.  1908.  (subd.  3,  §  220,  of  the  present 
act),  it  was  provided  that  all  taxable  non-resident  prop- 
erty within  the  state  not  specifically  bequeathed  is  deemed 
to  be  transferred  proportionately;  and  foreign  executors 
are  no  longer  permitted  to  marshal  the  assets  as  to  defeat 
or  lessen  the  tax. 


320  INHERITANCE  TAXATION 

The  same  result  has  been  attained  in  Massachusetts 
through  judicial  construction.     The  court  thus  reasons : 

"  The  remaining  question  is  whether  the  executors,  by 
using  the  stock  in  Massachusetts  corporations  for  the  pay- 
ment of  debts  and  legacies,  to  the  exemption  of  the  prop- 
erty in  New  Hampshire,  could  relieve  it  from  liability  to 
a  tax  upon  succession  imposed  by  our  law.  We  are  of 
opinion  that  they  could  not.  It  was  decided  in  Hooper  v. 
Bradford,  178  Mass.  95;  59  N.  E.  678;  that  taxes  under 
this  statute  are  to  be  assessed  on  the  value  of  the  testator's 
property  at  the  time  of  his  death.  The  rights  of  all 
parties,  including  the  rights  of  the  Commonwealth  to  its 
tax,  vest  at  the  death  of  the  testator.  It  is  true  that  the 
interest  of  a  legatee  is  subject  to  an  accounting;  but  it  is 
an  interest  in  the  existing  fund,  and  it  is  analogous  to 
that  of  a  cestui  que  trust.  The  executors  cannot,  by  inde- 
pendent action  in  attempting  to  marshal  assets  according 
to  their  personal  wishes,  enlarge  or  dimmish  the  rights 
of  legatees,  or  of  the  Commonwealth.  The  property  in 
Massachusetts  is  subject  to  the  jurisdiction  of  our  courts, 
and  the  executors  must  use  and  appropriate  it  according 
to  law.  Greves  v.  Shaw,  173  Mass.  205 ;  53  N.  E.  372,  209. 
Callahan  v.  Woodbridge,  171  Mass.  595;  51  N.  E.  176. 
The  debts,  the  legacies  in  Massachusetts  exempt  from 
taxation  and  the  expenses  of  administration  are  charge- 
able upon  the  general  assets,  as  well  those  in  New  Hamp- 
shire as  those  in  Massachusetts,  and  only  a  proportional 
part  of  the  property  in  Massachusetts  should  be  used  in 
paying  them.  The  balance  is  subject  to  the  payment  of 
a  tax  under  the  statute.  The  decision  of  the  Probate 
Court  upon  this  part  of  the  case  was  correct. ' ' 
Kingsbury  v.  Chapin,  196  Mass.  533;  82  N.  E.  700. 


PART  V— PROCEDURE 


A.  Preliminaries. 

1.  Motions  to  Exempt. 

2.  In  Case  of  Nonresidents. 

a.  Officials  to  be  Addressed  by  Nonresident  Attorneys. 

b.  Companies  Incorporated  in   States   that   Tax   Nonresident 

Transfers. 

c.  Companies  Incorporated  in  States  that  Do  Not  Tax  Non- 

resident Transfers. 

3.  The  Safe  Deposit  Box. 

a.  Comptroller  May  Inspect. 

b.  May  Not  Impose  Arbitrary  Conditions. 

c.  Consent  for  Transfer  of  Funds. 

d.  Property  Belonging  to  Another. 

4.  Inventory. 

a.  Must  be  Filed  by  Executor. 

b.  Form  of  Affidavit. 

c.  Preparation  of  Inventory. 

d.  Form  of  Inventory. 

B.  Proceedings  Before  Appraiser. 

1.  Appraisers. 

a.  Appointment  and  Removal. 

b.  Powers  and  Duties. 

2.  Notice. 

a.  Notice  is  Jurisdictional. 

b.  Notice  by  Mail  Sufficient. 

c.  Where  Notice  is  Impossible. 

d.  Presumption  of  Notice. 

3.  Hearings. 

a.  Informal  Upon  Affidavits. 

b.  Burden  of  Proof. 

c.  Witnesses. 

d.  Corporate  Books. 

e.  Objections. 

f.  Proof  of  Foreign  Law. 

4.  Report. 

a.  What  It  should  contain. 

b.  What  It  Must  Show. 

c.  Where  Taxation  is  Suspended. 

d.  Form  of  Report. 

11  [321] 


322  INHERITANCE  TAXATION 

C.  Proceedings  on  Appeal. 

1.  Jurisdiction  of  Probate  Court. 

a.  Effect  of  Probate  Decree. 

b.  Decree  of  Distribution. 

c.  Jurisdiction  of  the  Tax  Proceedings. 

2.  Assessment  of  the  Tax. 

a.  The  Judge  Acts  as  Taxing  Officer. 

b.  The  Taxing  Order. 

c.  Report  May  be  Remitted  to  Appraiser. 

d.  Forms  of  Taxing  Order. 

(1)  Where  There  are  no  Contingent  Remainders. 

(2)  Present  Taxation  of  Contingent  Remainders. 

e.  Effect  of  Decree  Assessing  Tax. 

3.  Appeal  to  the  Surrogate. 

a.  Notice  of  Appeal. 

b.  Form  of  Notice. 

4.  Determination  by  Surrogate. 

a.  Hearings  on  Appeal. 

b.  On  Motions  to  Exempt. 

c.  Order  Remitting  Report. 

d.  Supplemental  Report  of  Appraiser. 

e.  Second  Taxing  Order. 

f.  Notice  of  Appeal  from  Second  Taxing  Order. 

g.  Taxing  Order  Upon  Second  Appeal, 
h.  Notice  of  Appeal  to  Appellate  Division. 

5.  Before  the  Appellate  Courts. 

a.  Who  May  Appeal. 

b.  Order  Appealed  From. 

c.  Service  of  Notice  of  Appeal. 

d.  Papers  on  Appeal. 

e.  Costs. 

f.  Appeals  to  Court  of  Appeals. 

g.  To  Supreme  Court  of  United  States. 

D.  Subsequent  Proceedings. 

1.  Motions  to  Modify  Decree. 

a.  Where  There  Was  a  Mistake  of  Fact. 

b.  Where  There  Was  Lack  of  Jurisdiction. 

c.  May  Not  Correct  an  Error  of  Law. 

d.  Laches. 

e.  Bad  Faith. 

f .  Statute  of  Limitations. 

2.  Motions  to  Remit  Penalty. 

3.  Mandamus. 

a.  When  Writ  Allowed. 

b.  When  Refused. 

4.  Proceedings  to  Collect  Delinquent  Taxes. 

5.  Personal  Liability  of  Executors  and  Beneficiaries. 


PART  V  —  PROCEDURE  323 


PART  V-PROCEDURE 


A.—  PRELIMINARIES 

'  *  It  is  not  enough  for  the  legislature  to  declare  that  such 
interests  are  taxable.  If  no  mode  is  provided  for  assessing 
and  collecting  the  tax  the  law  is  imperfect  and  cannot,  as 
to  such  interests,  be  executed.  A  tax  cannot  be  legally 
imposed  unless  the  statute,  in  addition  to  creating  the  tax, 
provided  an  officer  or  tribunal  who  shall  appraise  and 
assess  the  property  on  notice  to  the  owner.  Stuart  v. 
Palmer,  74  N.  Y.  188;  Remsen  v.  Wheeler,  105  N.  Y.  575. 
The  principle  decided  in  the  cases  cited  applies  to  the 
transfer  tax  as  well  as  to  the  assessments  for  public 
improvements.  Matter  of  McPherson,  104  N.  Y.  321." 
Matter  of  Stewart,  131  N.  Y.  274;  30  N.  E.  184. 

So,  when  a  non-resident  decedent  owned  both  real  and 
personal  property,  the  surrogate  had  jurisdiction  under 
the  New  York  Act  of  1887 ;  but  unless  he  owned  real  estate 
no  machinery  was  provided  for  collecting  tax;  and  hence 
his  estate  escaped  taxation.  This  was  remedied  by  amend- 
ment; but  even  such  a  distinction,  if  intentional,  was  held 
constitutional. 

Seers  v.  Glynn,  211  U.  S.  477. 

Matter  of  Lord,  111  App.  Div.  152;  97  Supp.  553;  aff.  186  N.  Y. 

459;  79  N.  E.  1110. 
Matter  of  Embury,  19  App.  Div.  214;  45  Supp.  881;  aff.  154  N.  Y. 

746;  49  N.  E.  1096. 

1.  Motions  to  Exempt. 

When  the  estate  is  too  small  to  be  taxed  there  are  pro- 
visions in  nearly  all  the  statutes  for  a  motion,  upon 
affidavit  setting  forth  the  facts,  for  an  exemption;  or,  if 


324  INHERITANCE  TAXATION 

the  tax  only  amounts  to  a  few  dollars,  for  a  motion  to  fix 
the  tax  without  the  formality  of  inventory  or  appraisal. 
The  county  treasurer  or  local  comptroller's  representa- 
tive will  always  have  blank  forms  for  such  applications. 
Notice  of  such  an  application  must  be  given  to  the  comp- 
troller or  tax  commission. 

Matter  of  Collins,  104  App.  Div.  184;  93  Supp.  342. 

A  motion  to  exempt  is  not  entertained  where  the  taxing 
order  has  already  been  entered;  it  must  then  be  accom- 
plished by  a  motion  to  modify  the  decree. 
Matter  of  Rothfeld,  N.  Y.  L.  J.,  Jan.  4,  1914. 

Following  is  the  form  of  a  motion  used  before  the  Sur- 
rogate of  New  York  county. 

SURROGATE  's  COURT  —  NEW  YORK  COUNTY. 

In  the  Matter  of  the  Estate  of  

Deceased. 

PLEASE  TAKE  NOTICE,  that  on  the  petition  of 

,  dated  and  verified  the   day  of 

,  and  the  affidavit  of  

,  verified  the day  of ,  and 

on  all  other  papers  and  proceedings  herein,  I  will  move 
this  Court,  at  Chambers  thereof,  to  be  held  in  the  Hall  of 
Records,  in  the  Borough  of  Manhattan,  City  of  New  York, 

County  of  New  York,  on  the day  of 

at  10:30  o'clock  in  the  forenoon  of  that  day,  or  as  soon 
thereafter  as  counsel  can  be  heard,  for  an  order  exempting 

the  estate  of ,  deceased, 

from  the  tax  imposed  by  the  article  of  the  Tax  Law 
relating  the  Taxable  Transfers  of  Property. 

Dated  New  York,  


PART  V  —  PROCEDURE  325 

To  LAFAYETTE  B.  GLEASON, 

Attorney  for  the  State  Comptroller, 

233  Broadway,  Borough  of  Manhattan, 
City  of  New  York. 

SURROGATE'S  COURT — COUNTY  OF  NEW  YORK. 

In  the  Matter  of  the  Estate  of 

Deceased. 

To  THE  SURROGATE'S  COURT  OF  THE  COUNTY  OF  NEW  YORK. 

The  petition  of respectfully 

shows : 

FIRST. —  That  he  is  one  of  the  Executors  of  the  last  will 

and  testament  of  ,  deceased ; 

that  said  decedent  died  a  resident  of  the  State  of  New 

York  on  the day  of ,  leaving 

a  last  will  and  testament,  copy  of  which  is  hereby  annexed, 
which  was  duly  admitted  to  probate  by  the  Surrogates' 

Court  of  the  County  of  New  York,  on  the day  of 

,  and  that  Letters  Testamentary  were  duly 

issued  by  the  said  Surrogates '  Court  of  the  County  of  New 

York,  on  the day  of to  your  petitioner, 

whose  post  office  address  is 

,  Borough  of  Manhattan,  City  of 

New  York,  and  to ,  whose  post 

office  address  is  

SECOND. —  That  no  order  has  been  made  herein  appoint- 
ing an  appraiser. 

THIRD. —  That  as  such  Executor,  deponent  is  personally 
familiar  with  the  affairs  of  said  estate  the  property  con- 
stituting the  assets  thereof  and  their  fair  market  value  and 
with  the  debts,  expenses  and  charges  properly  and  legally 
liable  as  deductions  therefrom;  that  decedent  at  the  time 
of  his  death  had  no  safe  deposit  box;  that  to  the  best  of 
deponent's  knowledge,  information  and  belief,  there  is  no 
person  better  informed  than  deponent  upon  the  said  affairs 
of  this  estate. 


326  INHERITANCE  TAXATION 

FOURTH. —  That  Schedule  A,  hereunto  annexed,  sets  forth 
fully  and  in  detail  all  the  personal  property  wheresoever 
situated,  owned  by  the  decedent,  or  in  which  said  decedent 
had  any  right,  title  or  interest  at  the  time  of  his  death,  or 
which,  by  reason  thereof,  fell  into  or  became  part  of  the 
assets  of  this  estate  by  reversion,  remainder  or  otherwise. 
That  decedent  owned  no  real  estate  at  the  time  of  his  death, 
and  decedent  made  no  gift,  grant  or  conveyance  in  contem- 
plation of  death,  or  to  take  effect  at  or  after  death,  and 
decedent  had  no  power  of  appointment  vested  in  him  by 
the  will  or  deed  or  other  instrument  of  another. 

That  decedent  left  no  money  at  the  time  of  his  death, 
either  in  his  immediate  possession,  standing  to  his  credit, 
or  in  which  he  had  any  right,  title  or  interest,  in  banks  of 
deposit,  savings  banks,  trust  companies,  or  other  institu- 
tions, except  as  set  forth  in  said  Schedule  A.  That  dece- 
dent left  no  wearing  apparel,  jewelry,  silverware,  pictures, 
books,  works  of  art,  household  furniture,  horses,  carriages, 
automobiles,  boats,  or  any  other  personal  chattels  of  any 
kind  or  nature,  no  bonds  or  mortgages  or  claims  due  and 
owing  decedent  at  the  time  of  his  death,  and  no  promi- 
sory  notes  or  other  instruments  in  writing  for  the  payment 
of  money,  except  as  stated  in  said  Schedule  A. 

That  decedent  was  in  the  employ  of 

and  was  not  interested  in  any  copartnership  or  business. 

That  decedent  carried  no  life  insurance  policy  or  policies 
payable  to  himself  or  his  estate,  but  was  insured  in  the 

for  the 

sum  of ,  and  also  insured  in  the 

for  the  sum  of 

and  that  both  policies  were  payable  to 

,  your  petitioner,  as  beneficiary. 

That  decedent  owned  no  corporate  stocks  or  bonds,  or  other 
investment  securities,  and  no  property  of  any  kind  or 
description  except  as  set  forth  in  said  schedule  A. 

FIFTH. —  That  Schedule  B  hereto  annexed  sets  forth  the 


PART  V  —  PROCEDURE  327 

funeral  expenses,  administration  expenses  and  counsel  fees 
paid  or  incurred  in  connection  with  the  estate.    That  dece- 
dent left  no  debts  or  claims  against  the  decedent.     The 
Executors  also  claim  to  be  allowed  as  a  deduction  herein 
their  lawful  commissions  as  Executors. 

SIXTH.  —  That  the  only  person  beneficially  interested  in 
this  estate  at  the  time  of  decedent's  death  was  and  is  your 
petitioner,    .........................................    a 

....  ..........  of  decedent,  who  resides  at  ............. 

and  that    T1*    is  of  full  age  and  sound  mind. 

SEVENTH.  —  That  decedent  left  no  property  held  by  the 
decedent  in  trust  for  or  jointly  with  another  or  others. 

EIGHTH.  —  That  petitioner  has  made  due  and  diligent 
search  for  property  of  every  kind  and  description  left  by 
the  decedent,  and  has  been  able  to  discover  only  that  set 
forth  in  Schedule  A,  and  that  no  information  of  other  prop- 


erty  of  the  decedent  has  come  to  knowledge,  and  that 

,  his 

she 
,       verily  believes  that  the  decedent  left  no  property 

except  as  therein  set  forth. 

That  all  the  sums  claimed  as  deductions  in  Schedule  B 
are  lawful,  just  and  fair. 

WHEREFORE,  your  petitioner  prays  that  an  order  be  made 
exempting  the  estate  of  ............................... 

from  the  tax  imposed  by  the  article  of  the  Tax  Law  relating 
to  Taxable  Transfer  of  Property. 

Dated,  .................... 


Petitioner. 
2.  In  Case  of  Non-Residents. 

If  there  are  assets  situated  in  another  state,  or  the 
deceased  owned  stock  in  a  corporation  incorporated  in 
another  state,  the  attorney  for  the  executor  or  administra- 
tor should  write  to  the  proper  official  in  that  state  for  blank 
forms  and  information. 


328  INHERITANCE  TAXATION 

a.     OFFICIALS  TO  BE  ADDRESSED  BY  NON-RESIDENT  ATTORNEYS. 

Following  is  a  list  of  the  official  or  department  in  the 

several  states  to  whom  inquiries  should  be  addressed  by 

non-resident  attorneys  for  information  as  to  the  taxation 

of  non-resident  transfers,  blank  forms,  etc. 

Arkansas. —  Gordon  Huffmaster,  Inheritance  Tax  Attor- 
ney, Little  Rock,  Arkansas. 

Arizona. —  D.  F.  Johnson,  State  Treasurer,  Phoenix, 
Arizona. 

California. —  John  S.  Chambers,  Comptroller,  Attention 
Inheritance  Tax  Department,  Sacramento,  Cal. 

Colorado. —  Attorney-General,  Denver,  Colo. 

Connecticut. —  Hon.  Wm.  H.  Corbin,  Tax  Commissioner, 
Hartford,  Conn. 

Delaware. —  Register  of  Wills  of  New  Castle  County, 
Wilmington,  Del.;  Register  of  Wills  of  Kent  County, 
Dover,  Del. ;  Register  of  Wills  of  Sussex  County,  George- 
town, Del. 

Georgia. —  Hon.  H.  Clifford  Walker,  Attorney-General, 
State  Capitol,  Atlanta,  Ga. 

Idaho. —  Probate  Judge  or  County  Treasurer  where  prop- 
erty is  situated. 

Illinois. —  Hon.  Edward  J.  Brundage,  Attorney-General, 
Springfield,  111. 

Indiana. —  Hon.  Albert  E.  Humke,  Inheritance  Tax  Investi- 
gator, State  House,  Indianapolis,  Ind. 

Iowa. —  Hon.  E.  W.  Hoyt,  State  Treasurer,  Des  Moines, 
Iowa. 

Kansas. —  State  Tax  Commission,  Topeka,  Kan. 

Kentucky. —  Hon.  Robert  L.  Greene,  Auditor,  Frankfort, 
Ky. 

Louisiana. —  Edward  H.  Rightor,  Esq.,  Hennen  Bldg.,  New 
Orleans,  for  Parish  of  New  Orleans.  For  other  parishes, 
District  Attorney  of  Parish. 

Maine. —  Attorney-General,  Office,  Augusta,  Me. 


PART  V  —  PBOCEDUHE  329 

Maryland. —  Hon.  Albert  C.  Ritchie,  Attorney-General, 
Title  Bldg.,  Baltimore,  Md. 

Massachusetts. —  Hon.  George  S.  Hatch,  State  Tax  Com- 
missioner, State  House,  Boston,  Mass. 

Michigan. —  Hon.  0.  B.  Fuller,  Auditor  General,  Lansing, 
Mich. 

Minnesota. —  Hon.  Egbert  S.  Oakley,  Assistant  Attorney- 
General,  St.  Paul,  Minn. 

Missouri. —  Hon.  Frank  McAllister,  Jefferson  City,  Mo. 

Montana. —  Hon.  H.  L.  Hart,  State  Treasurer,  Helena, 
Mont. 

Nebraska. —  Hon.  Willis  E.  Reed,  Attorney-General,  Lin- 
coln, Neb. 

Nevada. —  Hon.  Geo.  A.  Cole,  State  Comptroller,  Carson 
City,  Nev. 

New  Hampshire. —  Hon.  Joseph  S.  Mathews,  Assistant 
Attorney-General,  Concord,  New  Hampshire. 

New  Jersey. —  Comptroller  of  the  Treasury,  State  House, 
Trenton,  N.  J. 

New  York. —  Hon.  Eugene  M.  Travis,  State  Comptroller, 
Capitol,  Albany,  N.  Y. 

North  Carolina. —  Corporation  Commission,  Raleigh,  N.  C. 

North  Dakota. —  Tax  Commission,  Bismarck,  N.  Dak. 

Ohio. —  State  Tax  Commission,  Columbus,  Ohio. 

Oklahoma. —  Hon.  E.  B.  Howard,  State  Auditor. 

Oregon. —  Hon.  Thos.  B.  Kay,  State  Treasurer,  Attention 
Inheritance  Tax  Department,  Salem,  Oregon. 

Pennsylvania. —  Hon.  Chas.  A.  Snyder,  Auditor  Gen., 
Harrisburg,  Pa. 

Rhode  Island. —  Board  of  Tax  Commissioners,  State  House, 
Providence,  R.  I. 

South  Dakota. —  Hon.  H.  C.  Preston,  Tax  Commission, 
Pierre,  S.  Dakota. 

Tennessee. —  Hon.  John  B.  Thompson,  Comptroller,  Nash- 
ville, Tenn. 


330  INHERITANCE  TAXATION 

Texas. —  Hon.  H.  B.  Terrell,  Comptroller,  Austin,  Texas. 
Utah. —  Hon.  D.  B.  Shields,  Attorney-General,  Salt  Lake 

City,  Utah. 
Vermont. — Hon.    Chas.    A.    Plumley,    Commissioner    of 

Taxes,  Northfield,  Vt. 
Virginia. —  Hon.  V.  Lee  Moore,  Auditor  Public  Accounts, 

Kichmond,  Va. 
Washington. —  State  Board  of  Tax  Commissioners,  Olym- 

pia,  Wash. 

West  Virginia. —  Hon.  W.  S.  Hollanan,  State  Tax  Com- 
missioner, Charleston,  W.  Va. 

Wisconsin. —  Wisconsin  Tax  Commission,  Madison,  Wis. 
Wyoming. —  County  Treasurer  of  County  where  property 

is  situated. 
United  States. —  Collector  of  Internal  Revenue  for  your 

district.    Names  and  addresses  being  as  follows: 

DISTRICTS  AND  COLLECTORS  OF  INTERNAL  REVENUE 

1.  Alabama  District,  States  of  Alabama  and  Mississippi; 

John  D.  McNeel,  collector,  Birmingham,  Ala. 

2.  Alaska.     (See  Washington.) 

3.  Arizona.    (See  New  Mexico.) 

4.  Arkansas  District ;  Jack  Walker,  collector,  Little  Rock, 

Ark. 

5.  First  California  District;  John  M.  Platt,  acting  col- 

lector, San  Francisco,  Cal. —  The  counties  of 
Alameda,  Alpine,  Amador,  Butte,  Calaveras,  Colusa, 
Contra  Costa,  Del  Norte,  Eldorado,  Fresno,  Glenn, 
Humboldt,  Inyo,  Kings,  Lake,  Lassen,  Madera, 
Marin,  Mariposa,  Mendocino,  Merced,  Modoc,  Mono, 
Monterey,  Napa,  Nevada,  Placer,  Plumas,  Sacra- 
mento, San  Benito,  San  Francisco,  San  Joaquin,  San 
Mateo,  Santa  Clara,  Santa  Cruz,  Shasta,  Sierra, 
Siskiyou,  Solano,  Sonoma,  Stanislaus,  Sutter, 
Tulare,  Tehama,  Trinity,  Tuolumne,  Yolo,  Yuba. 


PART  V  —  PROCEDURE  331 

6.  Sixth  California  District;  John  P.  Carter,  collector, 

Los  Angeles,  Cal. —  The  counties  of  Imperial,  Kern, 
Los  Angeles,  Orange,  Riverside,  San  Bernardino, 
San  Diego,  San  Luis  Obispo,  Santa  Barbara,  and 
Ventura. 

7.  Colorado  District,  States  of  Wyoming  and  Colorado; 

Mark  A.  Skinner,  collector,  Denver,  Col. 

8.  Connecticut  District,  States  of  Rhode  Island  and  Con- 

necticut ;  James  J.  Walsh,  collector,  Hartford,  Conn. 

9.  Delaware.     (See  Maryland.) 

10.  Florida  District;  Henry  Hayes  Lewis,  collector,  Jack- 

sonville, Fla. 

11.  Georgia  District;  Aaron  0.  Blalock,  collector,  Atlanta, 

Ga. 

12.  Hawaii  District;  John  F.  Haley,  collector,  Honolulu, 

Hawaii. 

13.  Idaho.    (See  Montana.) 

14.  First  Illinois  District;  Julius  F.  Smietanka,  collector, 

Chicago,  111. —  The  counties  of  Boone,  Carroll,  Cook, 
Dekalb,  Dupage,  Grundy,  Jo  Daviess,  Kane,  Kanka- 
kee,  Kendall,  Lake  Lasalle,  Lee,  McHenry,  Ogle, 
Stephenson,  Whiteside,  Will,  and  Winnebago. 

15.  Fifth  Illinois;  District;  Edward  D.  McCabe,  collector, 

Peoria,  111. — The  counties  of  Bureau,  Henderson, 
Henry,  Knox,  Marshall,  Mercer,  Peoria,  Putnam, 
Rock  Island,  Stark,  and  Warren. 

16.  Eighth  Illinois  District;  John  L.  Pickering,  collector, 

Springfield.  111. — The  counties  of  Adams,  Bond, 
Brown,  Calhoun,  Cass,  Champaign,  Christian,  Coles, 
Cumberland,  Dewitt,  Douglas,  Edgar,  Ford,  Fulton, 
Greene,  Hancock,  Iroquois,  Jersey,  Livingston, 
Logan,  McDonough,  McLean,  Macon,  Macoupin, 
Mason,  Menard,  Montgomery,  Morgan,  Moultrie, 
Piatt,  Pike,  Sangamon,  Schuyler,  Scott,  Shelby,  Taze- 
well,  Vermilion,  and  Woodford. 


332  INHERITANCE  TAXATION 

17.  Thirteenth  Illinois  District;  John  M.  Rapp,  collector, 

East  St.  Louis,  111. — The  counties  of  Alexander, 
Clark,  Clay,  Clinton,  Crawford,  Edwards,  Effingham, 
Fayette,  Franklin,  Gallatin,  Hamilton,  Hardin,  Jack- 
son, Jasper,  Jefferson,  Johnson,  Lawrence,  Madison, 
Marion,  Massac,  Monroe,  Perry,  Pope,  Pulaski, 
Randolph,  Richland,  St.  Clair,  Saline,  Union,  Wa- 
bash,  Washington,  Wayne,  White,  and  Williamson. 

18.  Sixth   Indiana  District;   Peter  J.   Kruyer,   collector, 

Indianapolis,  Ind. — The  counties  of  Adams,  Allen, 
Bartholomew,  Benton,  Blaekf  ord,  Brown,  Cass,  Dear- 
born, Decatur,  Dekalb,  Delaware,  Elkhart,  Fayette, 
Franklin,  Fulton,  Grant,  Hamilton  Hancock,  Hen- 
dricks,  Henry,  Howard,  Huntington,  Jackson,  Jas- 
per, Jay,  Jefferson,  Jennings,  Johnson,  Kosciusko, 
Lagrange,  Lake,  Laporte,  Lawrence,  Madison, 
Marion,  Marshall,  Miami,  Monroe,  Morgan.  Newton, 
Noble,  Ohio,  Porter,  Pulaski,  Randolph,  Ripley, 
Ruch,  St.  Joseph,  Shelby,  Starke,  Steuben,  Switzer- 
land, Tipton,  Union,  Wabash,  Wayne,  Wells,  White, 
and  Whitley. 

19.  Seventh  Indiana  District;  Isaac  R.  Strouse,  collector, 

Terre  Haute,  Ind. — The  counties  of  Boone,  Carroll, 
Clark,  Clay,  Clinton,  Crawford,  Daviess,  Dubois, 
Floyd,  Fountain,  Gibson,  Greene,  Harrison,  Knox, 
Martin,  Montgomery,  Orange,  Owen,  Parke,  Perry, 
Pike,  Posey,  Putnam,  Scott,  Spencer,  Sullivan,  Tip- 
pecanoe,  Vanderburg,  Vermilion,  Vigo,  Warren, 
Warrick,  and  Washington. 

20.  Third  Iowa  District ;  Louis  Murphy,  collector,  Dubuque, 

Iowa. 

21.  Kansas  District;  Wm.  H.  L.  Pepperell,  collector,  Wich- 

ita, Kans. 

22.  Second  Kentucky  District;  Josh  T.  Griffith,  collector, 

Owensboro,  Ky. — The  counties  of  Allen,  Ballard, 
Barren,  Breckenridge,  Butler,  Cal dwell,  Galloway, 


PART  V  —  PBOCEDURE  333 

Carlisle,  Christian,  Clinton,  Crittenden,  Cumberland, 
Daviess,  Edmonson,  Fulton,  Graves,  Grayson,  Han- 
cock, Hart,  Henderson,  Hickman,  Hopkins,  Living- 
ston, Logan,  Lyon,  McCracken,  McLean,  Marshall, 
Metcalfe,  Monroe,  Muhlenberg,  Ohio,  Eussell,  Simp- 
son, Todd,  Trigg,  Union,  Warren,  and  Webster. 

23.  Fifth  Kentucky  District;  Thomas  S.  Mayes,  collector, 

Louisville,  Ky. —  The  city  of  Louisville  and  the 
counties  of  Adair,  Bullitt,  Casey,  Green,  Hardin, 
Henry,  Jefferson,  Larue,  Marion,  Meade,  Nelson, 
Oldham,  Owen,  Shelby,  Spencer,  Taylor,  and  Wash- 
ington. 

24.  Sixth  Kentucky  District ;  Charlton  B.  Thompson,  collec- 

tor, Covington,  Ky. —  The  counties  of  Boone,  Brack- 
en, Campbell,  Carroll,  Gallatin,  Grant,  Harrison, 
Kenton,  Pendleton,  Robertson,  and  Trimble. 

25.  Seventh  Kentucky  District;  Ben  Marshall,  collector, 

Lexington,  Ky. —  The  counties  of  Bath,  Bourbon, 
Boyd,  Carter,  Clark,  Elliott,  Fayette,  Fleming, 
Franklin,  Greenup,  Johnson,.  Lawrence,  Lewis, 
Martin,  Mason,  Menifee,  Montgomery,  Morgan, 
Nicholas,  Powell,  Rowan,  Scott,  and  Woodford. 

26.  Eighth  Kentucky  District ;  John  W.  Hughes,  collector, 

Danville,  Ky. — The  counties  of  Anderson,  Bell, 
Boyle,  Breathitt,  Clay,  Estill,  Floyd,  Garnard,  Har- 
lan,  Jackson,  Jessamine,  Knott,  Laurel,  Lee,  Leslie, 
Letcher,  Lincoln,  Madison,  Magoffin,  Mercer, 
McCreary,  Owsley,  Perry,  Pike,  Pulaski,  Rock- 
castle,  Wayne,  Whitley,  and  Wolfe. 

27.  Louisiana    District;    John    Y.    Fauntleroy,    collector, 

New  Orleans,  La. 

28.  Maine.     (See  New  Hampshire.) 

29.  Maryland  District ;  States  of  Maryland  and  Delaware. 

the  District  of  Columbia,  and  the  counties  of  Acco- 
mac,  and  Northampton,  of  the  State  of  Virginia; 
Joshua  W.  Miles,  collector,  Baltimore,  Md. 


334  INHERITANCE  TAXATION 

30.  Massachusetts  District ;  John  F.  Malley,  collector,  Bos- 

ton, Mass. 

31.  First  Michigan  District;  James  J.  Brady,  collector, 

Detroit,  Mich. — Counties  of  Aleona,  Alpena,  Arenac, 
Bay,  Branch,  Calhoun,  Cheboygan,  Clare,  Clinton, 
Crawford,  Genesee,  Gladwin,  Gratiot,  Hillsdale, 
Huron,  Ingham,  losco,  Isabella,  Jackson,  Lapeer, 
Lenawee,  Livingston,  Macomb,  Midland,  Monroe, 
Montmorency,  Oakland,  Ogemaw,  Oscoda,  Otsego, 
Presque  Isle,  Roscommon,  Saginaw,  Sanilac,  Shia- 
wassee,  St.  Clair,  Tuscola,  Washtenaw,  and  Wayne. 

32.  Fourth  Michigan  District ;  Emanuel  J.  Doyle,  collector, 

Grand  Rapids,  Mich. — Counties  of  Alger,  Allegan, 
Antrim,  Baraga,  Barry,  Benzie,  Berrien,  Cass, 
Charlevoix,  Chippewa,  Delta,  Dickinson,  Eaton,  Em- 
met, Gogebic,  Grand  Traverse,  Houghton,  Ionia, 
Iron,  Kalamazoo,  Kalkaska,  Kent,  Keweenaw, 
Lake,  Leelanau,  Luce,  Mackinac,  Manistee,  Mar- 
quette,  Mason,  Mecosta,  Menonominee,  Missaukee, 
Montcalm,  Muskegon,  Newaygo,  Oceana,  Ontonagon, 
Osceola,  Ottawa,  St.  Joseph,  Schoolcraft,  Van 
Buren,  and  Wexford. 

33.  Minnesota  District;  Edward  J.  Lynch,  collector,   St. 

Paul,  Minn. 

34.  Mississippi.     (See  Alabama.) 

35.  First  Missouri  District;  George  H.  Moore,  collector, 

St.  Louis,  Mo. —  The  counties  of  Adair,  Audrain, 
Bellinger,  Boone,  Butler,  Callaway,  Cape  Girardeau, 
Carter,  Clark,  Crawford,  Dent,  Dunklin,  Franklin, 
Gasconade,  Howard,  Iron,  Jefferson,  Knox,  Lewis, 
Lincoln,  Linn,  Macon,  Madison,  Maries,  Marion, 
Mississippi,  Montgomery,  Monroe,  New  Madrid, 
Oregon,  Osage,  Pemiscot,  Perry,  Phelps,  Pike, 
Pulaski,  Rails,  Randolph,  Reynolds,  Ripley,  St. 
Charles,  St.  Francois,  Ste.  Genevieve,  St.  Louis, 


PAST  V  -  -  PROCEDURE  335 

Schuyler,  Scotland,  Scott,  Shannon,  Shelby,  Stod- 
dard,  Warren,  Washington,  and  Wayne. 

36.  Sixth  Missouri  District;  Edgar  M.  Harger,  collector, 

Kansas  City,  Mo. — The  counties  of  Andrew,  Atchi- 
son,  Barry,  Barton,  Bates,  Benton,  Buchanan,  Cald- 
well,  Camden,  Carroll,  Cass,  Cedar,  Chariton, 
Christian,  Clay,  Clinton,  Cole,  Cooper,  Dade,  Dallas, 
Daviess,  Dekalb,  Douglas,  Gentry,  Greene,  Grundy, 
Harrison,  Henry,  Hickory,  Holt,  Howell,  Jackson, 
Jasper,  Johnson,  Laclede,  Lafayette,  Lawrence, 
Livingston,  McDonald,  Mercer,  Miller,,  Moniteau, 
Morgan,  Newton,  Nodaway,  Ozark,  Pettis,  Platte, 
Polk,  Putnam,  Ray,  St.  Clair,  Saline,  Stone.  Sulli- 
van, Taney,  Texas,  Vernon,  Webster,  Worth,  and 
Wright. 

37.  Montana  District;  States  of  Idaho,  Utah,  and  Mon- 

tana; William  C.  Whaley,  collector,  Helena,  Mont. 

38.  Nebraska    District;     George    L.    Loomis,    collector, 

Omaha,  Nebr. 

39.  Nevada.     (See  First  California  District.) 

40.  New  Hampshire  District,  States  of  Maine,  Vermont, 

and  New  Hampshire ;  Seth  W.  Jones,  collector,  Port- 
land, Me. 

41.  First  New  Jersey  District;  Samuel  Iredell,  collector, 

Camden,  N.  J. — The  counties  of  Atlantic,  Burling- 
ton, Camden,  Cape  May,  Cumberland,  Gloucester, 
Mercer,  Monmouth,  Ocean,  and  Salem. 

42.  Fifth  New  Jersey  District ;  Charles  V.  Duffy,  collector, 

Newark,  N.  J. —  The  counties  of  Bergen,  Essex, 
Hudson,  Hunterdon,  Middlesex,  Morris,  Passaic, 
Somerset,  Sussex,  Union,  and  Warren. 

43.  New  Mexico  District,  States  of  New  Mexico  and  Ari- 

zona; Lewis  T.  Carpenter,  collector,  Phoenix,  Ariz. 

44.  First  New  York  District;  Henry  P.  Keith,  collector, 

Brooklyn,  N.  Y.  — The  counties  of  Kings,  Nassau, 
Queens,  Richmond,  and  Suffolk. 


336  INHERITANCE  TAXATION 

45.  Second  New  York  District ;  Win.  H.  Edwards,  collector, 

NCAV  York,  N.  Y. — All  that  part  of  the  Borough  of 
Manhattan  south  of  a  line  running  from  the  East 
Eiver,  northwest  through  Catharine  Street,  to  the 
Bowery,  north  on  the  Bowery  to  Canal  Street, 
west  on  Canal  Street  to  Mott  Street,  north  on  Mott 
Street  to  Bleecker  Street,  east  on  Bleecker  Street 
to  the  Bowery,  northwest  on  the  Bowery  and  Fourth 
Avenue  to  Fourteenth  Street,  wrest  on  Fourteenth 
Street  to  Sixth  Avenue,  north  on  Sixth  Avenue  to 
Twenty-fourth  Street,  and  west  on  Twenty-fourth 
Street  to  the  Hudson  River. 

46.  Third  New  York  District ;  Mark  Eisner,  collector,  New 

York,  N.  Y.— All  that  part  of  the  Borough  of  Man- 
hattan north  of  the  Second  District  and  south  of 
the  Harlem  Eiver. 

47.  Fourteenth  New  York  District ;  Eoscoe  Irwin,  collector, 

Albany,  N.  Y. — The  counties  of  Albany,  Clinton, 
Columbia,  Dutchess,  Essex,  Fulton,  Greene,  Hamil- 
ton, Montgomery,  Orange,  Putnam,  Eensselaer, 
Eockland,  Saratoga,  Schenectady,  Schoharie,  Sulli- 
van, Ulster,  Warren,  Washington,  and  Westchester, 
and  all  that  part  of  New  York  City  north  of  the 
Third  District. 

48;  Twenty-first  New  York  District;  Neal  Brewster, 
collector,  Syracuse,  N.  Y. — The  counties  of  Broome, 
Cayuga,  Chenango,  Cortland,  Delaware,  Franklin, 
Herkimer,  Jefferson,  Lewis,  Madison,  Oneida,  Onon- 
daga,  Oswego,  Otsego,  St.  Lawrence,  Schuyler, 
Seneca,  Tioga,  Tompkins,  and  Wayne. 

49.  Twenty-eighth  New  York  District ;  Vincent  H,  Eiordan, 
collector,  Buffalo,  N.  Y. — The  counties  of  Allegany, 
Cattaraugus,  Chautauqua,  Chemung,  Erie,  Genesee, 
Livingston,  Monroe,  Niagara,  Ontario,  Orleans, 
Steuben,  Wyoming,  and  Yates. 


PART  V  —  PROCEDURE  337 

50.  Fourth  North   Carolina  District;   Josiah  W.  Bailey, 

collector,  Raleigh,  N.  C. — The  counties  of  Alamance, 
Beaufort,  Bertie,  Bladen,  Brunswick,  Camden,  Car- 
teret,  Caswell,  Chatham,  Chowan,  Columbus,  Cra- 
ven, Cumberland,  Currituck,  Dare,  Duplin,  Durham, 
Edgecombe,  Franklin,  Gates,  Granville,  Greene, 
Halifax,  Harnett,  Hertford,  Hyde,  Johnston,  Jones, 
Lenoir,  Martin,  Montgomery,  Moore,  Nash,  New 
Hanover,  Northampton,  Onslow,  Orange,  Pamlico, 
Pasquotank,  Pender,  Perquimans,  Person,  Pitt, 
Richmond,  Robeson,  Sampson,  Scotland,  Tyrrell, 
Vance,  Wake,  Warren,  Washington,  Wayne,  and 
Wilson. 

51.  Fifth    North    Carolina    District;    Alston    D.    Watts, 

collector,  Statesville,  N.  C. — The  counties  of  Alex- 
ander, Allegany,  Anson,  Ashe,  Buncombe,  Burke, 
Cabarrus,  Caldwell,  Catawba,  Cherokee,  Clay, 
Cleveland,  Davidson,  Davie,  Forsyth,  Gaston, 
Graham,  Guilford,  Haywood,  Henderson,  Iredell, 
Jackson,  Lincoln,  McDowell,  Macon,  Madison,  Meck- 
lenburg, Mitchell,  Polk,  Randolph,  Rockingham, 
Rowan,  Rutherford,  Stanly,  Stokes,  Surry,  Swain, 
Transylvania,  Union,  Watauga,  Wilkes,  Yadkin, 
and  Yancey. 

52.  North  and  South  Dakota  District;  James  Coffey,  col- 

lector, Aberdeen,  S.  Dak. 

53.  First  Ohio  District ;  Andrew  C.  Gilligan,  collector,  Cin- 

cinnati, Ohio. — The  counties  of  Brown,  Butler, 
Clarke,  Clermont,  Clinton,  Fayette,  Greene,  Hamil- 
ton, Highland,  Miami,  Montgomery,  Preble,  and 
Warren. 

54.  Tenth  Ohio  District ;  Frank  B.  Niles,  collector,  Toledo, 

Ohio. — The  counties  of  Allen,  Auglaize,  Champaign, 
Crawford,  Darke,  Defiance,  Erie,  Fulton,  Hancock, 
Hardin,  Henry,  Huron,  Logan,  Lucas,  Mercer, 


338  INHERITANCE  TAXATION 

Ottawa,  Paulding,  Putnam,  Sandusky,  Seneca,  Shel- 
by, Van  Wert,  Williams,  Wood,  and  Wyandot. 

55.  Eleventh  Ohio  District;  Beriah  E.  Williamson,  Collec- 

tor, Columbus,  Ohio. — The  counties  of  Adams, 
Athens,  Coshocton,  Delaware,  Fairfield,  Franklin. 
Gallia,  Guernsey,  Hocking,  Jackson,  Knox,  Law- 
rence, Licking,  Madison,  Marion,  Meigs,  Morgan, 
Morrow,  Muskingum,  Noble,  Perry,  Pickaway,  Pike, 
Eoss,  Scioto,  Union,  Vinton,  and  Washington. 

56.  Eighteenth  Ohio  District;  Harry  H.  Weiss,  collector, 

Cleveland,  Ohio — The  counties  of  Ashland,  Ashta- 
bula,  Belmont,  Carroll,  Columbiana,  Cuyahoga, 
Geauga,  Harrison,  Holmes,  Jefferson,  Lake,  Lorain, 
Mahoning,  Medina,  Monroe,  Portage,  Richland, 
Stark,  Summit,  Trumbull,  Tuscarawas,  and  Wayne. 

57.  Oklahoma  District;  Hubert  L.  Bolen,  collector,  Okla- 

homa City,  Okla. 

58.  Oregon  District;  Milton  A.  Miller,  collector,  Portland, 

Oregon. 

59.  First  Pennsylvania  District;  Ephraim  Lederer,  collec- 

tor, Philadelphia,  Pa. — The  counties  of  Berks, 
Bucks,  Chester,  Delaware,  Lehigh,  Montgomery, 
Philadelphia,  and  Schuylkill. 

60.  Ninth  Pennsylvania  District;  Benjamin  F.  Davis,  col- 

lector, Lancaster,  Pa. — The  counties  of  Adams, 
Bedford,  Blair,  Cumberland,  Dauphin,  Franklin, 
Fulton,  Huntingdo'n,  Juniata,  Lancaster,  Lebanon, 
Miffin,  Perry,  Snyder,  York. 

61.  Twelfth  Pennsylvania  District;  Fred  C.   Kirkendall, 

collector,  Scranton,  Pa. — The  counties  of  Bradford, 
Carbon,  Center,  Clinton,  Columbia,  Lackawanna, 
Luzerne,  Lycoming,  Monroe,  Montour,  Northamp- 
ton, Northumberland,  Pike,  Potter,  Sullivan,  Susque- 
hanna,  Tioga,  Union,  Wayne,  Wyoming. 


PART  V  —  PROCEDURE  339 

62.  Twenty-third  Pennsylvania  District;  C.   Gregg  Lew- 

ellyn,  collector,  Pittsburgh,  Pa. — The  counties  of 
Allegheny,  Armstrong,  Beaver,  Butler,  Cambria, 
Cameron,  Clarion,  Clearfield,  Crawford,  Elk,  Erie, 
Fayette,  Forest,  Greene,  Indiana,  Jefferson,  Law- 
rence, McKean,  Mercer,  Somerset,  Venango,  War- 
ren, Washington,  and  Westmoreland. 

63.  Rhode  Island.     (See  Connecticut.) 

64.  South  Carolina ;  Duncan  C.  Heyward,  collector,  Colum- 

bia, S.  C. 

65.  South  Dakota.     (See  North  and  South  Dakota.) 

66.  Tennessee  District;  Edward  B.  Craig,  collector,  Nash- 

ville, Tenn. 

67.  Third  Texas  District;  Alexander  S.  Walker,  Austin, 

Tex. 

68.  Utah.     (See  Montana.) 

69.  Vermont.    (See  New  Hampshire.) 

70.  Second  Virginia  District;  Richard  C.  L.  Moncure,  col- 

lector, Richmond,  Va. — The  counties  of  Amelia,  Ap- 
pomattox,  Brunswick,  Buckingham,  Carolina, 
Charles  City,  Chesterfield,  Cumberland,  Dinwiddie, 
Elizabeth  City,  Essex,  Fluvanna,  Gloucester,  Gooch- 
land,  Greensville,  Hanover,  Henrico,  Isle  of  Wight, 
James  City,  King  and  Queen,  King  George,  King 
William,  Lancaster,  Louisa,  Lunenburg,  Mathews, 
Middlesex,  Nansemond,  New  Kent,  Norfolk,  Nor- 
thumberland, Nottoway,  Powhatan,  Prince  Edward, 
Prince  George,  Princess  Anne,  Richmond,  Stafford, 
Southampton,  Spottsylvania,  Surry,  Sussex,  War- 
wick, Westmoreland,  and  York. 

71.  Sixth    Virginia    District;    John    M.    Hart,    collector, 

Roanoke,  Va. — The  counties  of  Albemarle,  Alex- 
andria, Alleghany,  Amherst,  Augusta,  Bath,  Bed- 
ford, Bland,  Botetourt,  Buchanan,  Campbell,  Car- 
roll, Charlotte,  Clarke,  Craig,  Culpeper,  Dickenson, 


340  INHERITANCE  TAXATION 

Fairfax,  Fauquier,  Floyd,  Franklin,  Frederick, 
Giles,  Grayson,  Greene,  Halifax,  Henry,  Highland, 
Lee,  Loudoun,  Madison,  Mecklenburg,  Montgomery, 
Nelson,  Orange,  Page,  Patrick,  Pittsylvania,  Prince 
William,  Pulaski,  Rappahannock,  Roanoke,  Rock- 
bridge,  Rockmgham,  Russell,  Scott,  Shenandoah, 
Smyth,  Tazewell,  Warren,  Washington,  Wise,  and 
Wythe. 

72.  Washington  District,  State  of  Washington  and  Terri- 

tory of  Alaska;  David  J.  Williams,  collector,  Ta- 
coma,  Wash. 

73.  West  Virginia  District;   Samuel  A.   Hays,  collector, 

Parkersburg,  W.  Va. 

74.  First  Wisconsin  District;  Paul  A.  Hemmy,  collector, 

Milwaukee,  Wis. — Counties  of  Brown,  Calumet, 
Dodge,  Door,  Florence,  Fond  du  Lac,  Forest,  Green 
Lake,  Kenosha,  Kewaunee,  Manitowoc,  Marinette, 
Marquette,  Milwaukee,  Oconto,  Outagamie,  Ozaukee, 
Racine,  Shawano,  Sheboygan,  Walworth,  Washing- 
ton, Waukesha,  Waupaca,  Waushara,  Winnebago, 
and  county  of  Langlade  with  exception  of  the  eight 
townships  of  said  county  which  were  formerly  in 
Lincoln  County. 

75.  Second  Wisconsin  District;  Burt  Williams,  collector, 

Madison,  Wis. —  Counties  of  Adams,  Ashland,  Bar- 
ron,  Bayfield,  Buffalo,  Burnett,  Chippewa,  Clark, 
Columbia,  Crawford,  Dane,  Douglas,  Dunn,  Eau 
Claire,  Grant,  Green,  Iowa,  Iron,  Jackson,  Jefferson, 
Juneau,  La  Crosse,  Lafayette,  Lincoln,  Marathon, 
Monroe,  Oneida,  Pepin,  Pierce,  Polk,  Portage,  Price, 
Richland,  Rock,  Rusk,  St.  Croix,  Sauk,  Sawyer, 
Taylor,  Trempealeau,  Vernon,  Vilas,  Washburn, 
Wood,  and  the  eight  townships  in  the  western  part 
of  Langlade  County  which  were  formerly  in  Lincoln 
County. 

76.  Wyoming.    (See  Colorado.) 


PART  V  -  -  PROCEDURE  341 

"b.  COMPANIES  INCORPORATED  IN  STATES  THAT  TAX  NONRESI- 
DENT TRANSFERS. 

Following  is  a  list  of  the  principal  corporations  and 
joint  stock  companies  incorporated  or  formed  under  the 
laws  of  states  that  tax  transfers  of  their  stock  in  the 
estates  of  non-residents.  Those  marked  *  are  incorporated 
in  states  that  tax  transfers  to  collaterals  and  strangers 
only. 

State  where 
Name   of   Company.  Corporation   organized. 

Adventure  Consolidated  Copper  Co Mich. 

Algomah  Mining  Co Mich. 

Allis-Chalmers  Co N.  J. 

Allouez  Mining  Co Mich. 

Amalgamated  Copper  Co N.  J. 

American  Beet  Sugar  Co N.  J. 

American  Brake  Shoe  &  Foundry  Co N.  J, 

American  Can  Co N.  J. 

American  Car  &  Foundry  Co N.  J. 

American  Cotton  Oil  Co.  (The) N.  J. 

American  Hide  &  Leather  Co N.  J. 

American  Ice  Securities  Co N.  J. 

American  Light  &  Traction  Co N.  J. 

American  Linseed  Co N.  J. 

American  Malt  Corp N.  J. 

American  Radiator  Co N.  J. 

American  Sewer  Pipe  Co N.  J. 

American  Shipbuilding  Co N.  J. 

American  Smelters  Securities  Co.. .' N.  J. 

American  Smelting  &  Refining  Co N.  J. 

American  Snuff  Co N.  J. 

American  Steel  Foundries  Co N.  J. 

American  Sugar  Refining  Co.  (The) N.  J. 

American  Tobacco  Co.  (The) N.  J. 

American  Type  Founders  Co N.  J. 

American  Woolen  Co.  .N.  J. 


342  INHERITANCE   TAXATION 

State  where 
Name   of   Company.  Corporation    organized. 

American  Writing  Paper  Co N.  J. 

Anaconda  Copper  Mining  Co Mont. 

Ann  Arbor  Railroad  Co Mich. 

Arnold  Mining  Co Mich. 

Associated  Oil  Co Cal. 

Atlantic  Coast  Line  Railroad  Co Va. 

Atlantic  Mining  Co Mich. 

*Atchison,  Topeka  &  Santa  Fe  Railway  Co.  (The) . .  .Kan. 
*Baltimore  &  Ohio  Railroad  Co.  (The) Va.,  Md. 

Bethlehem  Steel  Corp N.  J. 

Bonanza  Development  Co Colo. 

Butte-Ballaklava  Copper  Co : . . .  .Ariz. 

Butte  Coalition  Mining  Co N.  J. 

Calumet  &  Arizona  Mining  Co Ariz. 

Calumet  &  Hecla  Mining  Co Mich. 

Centennial  Copper  Mining  Co Mich. 

Central  Coal  &  Coke  Co Mo. 

Central  of  Georgia  Railway  Co Ga. 

Central  Leather  Co N.  J. 

Central  Pacific  Railway  Co Utah 

Central  Railroad  of  New  Jersey N.  J. 

Chesapeake  &  Ohio  Railway  Co.  (The) Va. 

Chicago  &  Alton  Railroad  Co 111. 

Chicago  &  Eastern  Illinois  Railroad  Co 111. 

Chicago  &  Northwestern  Railway  Co 111.,  Wis.,  Mich. 

.Chicago,  Burlington  &  Quincy  Railroad  Co 111. 

Chicago  Great  Western  Railroad  Co 111. 

Chicago  Junction  Railways  &  Union  Stock  Yards  Co. 
(The) " , N.  J. 

Chicago,  Milwaukee  &  St.  Paul  Railway  Co Wis. 

Chicago  Pneumatic  Tool  Co N.  J. 

Chicago  Railways  Co 111. 

Chicago,  St.  Paul,  Minneapolis  &  Omaha  Railway  Co .  Wis. 

NOTE. —  Iowa.  Kansas,  Kentucky,  Maryland,  Ohio  and  Texas  tax  only  Inheritance 
of  collaterals  and  strangers,  see  statutes  of  those  States.  Appendix. 


PART  V  —  PROCEDURE  343 

State  where 
Name   of   Company.  Corporation    organized. 

Chicago  Subway  Co N.  J. 

Chicago  Telephone  Co 111. 

*  Cincinnati,  Hamilton  &  Dayton  Railway  Co.  (The) .  .Ohio 
*Cleveland,  Cincinnati,  Chicago  &  St.  Louis  Railway. Ohio 

Colorado  Fuel  &  Iron  Co.  (The) Colo. 

Colorado  &  Southern  Railway  Co.  (The) Colo. 

*  Columbus  &  Hocking  Coal  &  Iron  Co Ohio 

Commonwealth  Edison  Co 111. 

Consolidated  Coal  Co.  (The) Md. 

Consolidated  Mercur  Gold  Mines  Co N.  J. 

Crucible  Steel  Co.  of  America N.  J. 

Cuban- American  Sugar  Co.  (The) N.  J. 

*Cumberland  Telegraph  and  Telephone  Co Ky. 

Daly  West  Mining  Co Col. 

Denver  &  Rio  Grande  Railroad  Co Col.,  Utah 

Detroit  United  Railway  Co Mich. 

Diamond  Match  Co.  (The) .111. 

Distillers  Securities  Corp N.  J. 

Duluth,  South  Shore  &  Atlantic  Railway  Co.  .Mich.,  Wis. 

Du  Pont  (E.  I.)  De  Nemours  Powder  Co .  .N.  J. 

East  Butte  Copper  Mining  Co.  (The) Ariz. 

Eastman  Kodak  Co N.  J. 

Electric  Storage  Battery  Co.  (The) N.  J. 

Elgin  National  Watch  Co 111. 

Franklin  Mining  Co Mich. 

General  Asphalt  Co N.  J. 

General  Motors  Co N.  J. 

Goldfield  Consolidated  Mines  Co.  (The) Wyo. 

Great  Northern  Iron  Ore  Properties Minn. 

Great  Northern  Railway  Co Minn. 

Greene  Cananea  Copper  Co Minn. 

Hancock  Consolidated  Mining  Co Mich. 

Havana  Electric  Railway  Co N.  J. 

NOTE. —  Iowa.  Kansas,  Kentucky.  Maryland.  Ohio  and  Texas  tax  only  inheritance 
of  collaterals  and  strangers,  see  statutes  of  those  States,  Appendix. 


344  INHERITANCE  TAXATION 

State  where 
Name   of  Company.  Corporation   organized. 

Helvitia  Copper  Co.  (The) Ariz. 

*Hocking  Valley  E.  R.  Co Ohio 

Illinois  Brick  Co 111. 

Illinois  Central  Eailroad  Co 111. 

Indiana  Mining  Co Mich. 

Ingersoll-Eand  Co N.  J. 

international  and  Great  Northern  E.  E.  Co Texas 

International  Harvester  Co N.  J. 

International  Mercantile  Marine  Co N.  J. 

International  Nickel  Co N.  J. 

International  Power  Co N.  J. 

International  Smelting  &  Eefining  Co N.  J. 

International  Steam  Pump  Co N.  J. 

Iowa  Central  Eailway  Co Dl. 

Isle  Eoyale  Copper  Co N.  J. 

Kansas  City  Eailway  &  Light  Co N.  J. 

*  Kansas  City,  Fort  Scott  &  Memphis  Ey.  Co. (The) .  .Kan. 

*  Kansas  City,  Mexico  &  Orient  Eailway  Co.  (The) . .  .Kan. 

Kansas  City  Southern  Eailway  Co.  (The) Mo. 

Keweenaw  Copper  Co Mich. 

Laclede  Gas  Light  Co.  (The) Mo. 

Lake  Copper  Co Mich. 

Lake  Erie  &  Western  Eailroad  Co • 111. 

'Lake  Shore  &  Mich.  Southern  Eailway  Co.. Ohio.,  111.,  Mich. 

Lake  Superior  Corp.  (The) N.  J. 

La  Salle  Copper  Co Mich. 

*Louisville  &  Nashville  E.  E.  Co Ky. 

Mayflower  Mining  Co Mich. 

Metropolitan  West  Side  Elevated  Eailway  Co.  (The) .  .111. 

Michigan  Central  Eailroad  Co Mich. 

Michigan  Copper  Mining  Co Mich. 

Michigan  State  Telephone  Co Mich. 

*  Minneapolis  &  St.  Louis  Eailroad  Co Minn.,  la. 

NOTE. —  Iowa,  Kansas,  Kentucky,  Maryland,  Ohio  and  Texas  tax  only  inheritance 
of  collaterals  and  strangers,  see  statutes  of  those  States,  Appendix. 


PART  V  —  PROCEDURE  345 

State  where 
Name   of   Company.  Corporation    organized. 

Minneapolis  General  Electric.  (The) N.  J. 

Minneapolis,  St.  Paul  &  Sault  Ste.  Marie  Railway  Co. 

Minn.,  Wis.  &  Mich. 

^Missouri,  Kansas  &  Texas  Railway  Co Kan. 

Missouri  Pacific  Railway  Co.  (The) Mo.,  Neb.,  Kan. 

Mohawk  Mining  Co Mich. 

Nashville,  Chattanooga  &  St.  Louis  Railway  Co Tenn. 

National  Biscuit  Co N.  J. 

National  Carbon  Co N.  J. 

National  Enameling  &  Stamping  Co N.  J. 

National  Lead  Co N.  J. 

New  Arcadian  Copper  Co Mich. 

New  York  Air  Brake  Co.  (The) N.  J. 

Norfolk  &  Western  Railway  Co Va. 

North  American  Co.  (The) N.  J. 

North  Butte  Mining  Co Minn. 

North  Lake  Mining  Co Mich. 

Northern  Central  R.  R.  Co Md. 

Northern  Pacific  Railway  Co Wis. 

Northern  Securities  Co N.  J. 

Ojibway  Mining  Co Mich. 

Old  Colony  Copper  Co Mich. 

Osceola  Consolidated  Mining  Co Mich. 

Otis  Elevator  Co N.  J. 

Pacific  Coast  Co.  (The) N.  J. 

Pacific  Telephone  &  Telegraph  Co.  (The) Cal. 

Parrot  Silver  &  Copper  Co Mont. 

Pennsylvania  Steel  Co N.  J. 

People's  Gas  Light  &  Coke  Co HI. 

Peoria  &  Eastern  Railway  Co 111. 

Pere  Marquette  Railroad  Co Mich. 

Philadelphia  Electric  Co N.  J. 

NOTE. —  Iowa,  Kansas,  Kentucky,  Maryland,  Ohio  and  Texas  tax  only  inheritance 
of  collaterals  and  strangers,  see  statutes  of  those  States,  Appendix. 


346  INHERITANCE  TAXATION 

State  where 
Name   of   Company.  Corporation    organized. 

Pittsburgh,  Cincinnati,  Chicago  &  St.  Louis  Railway 

Ohio,  W.  Va.,  HI. 

Pittsburgh  Coal  Co N.  J. 

Pittsburgh,  Fort  Wayne  &  Chicago  Railway  Co . .  Ohio.,  111. 

Pressed  Steel  Car  Co N.  J. 

Pullman  Co.  (The)  111. 

Quincy  Mining  Co Mich. 

Railway  Steel-Spring  Co N.  J. 

Republic  Iron  &  Steel  Co N.  J. 

Rock  Island  Co.  (The) N.  J. 

St.  Joseph  &  Grand  Island  Railway  Co.  (The) . .  Neb.,  Kan. 

St.  Louis  &  San  Francisco  Railroad  Co Mo. 

St.  Louis  Southwestern  Railway  Co Mo. 

St.  Mary's  Mineral  Land  Co N.  J. 

San  Pedro,  Los  Angeles  &  Salt  Lake  Railroad  Co. . .  .Utah 

Santa  Fe  Gold  &  Copper  Mining  Co N.  J. 

Savannah  Electric  Co Ga. 

Shattuck  Arizona  Copper  Co Minn. 

Sloss  Sheffield  Steel  &  Iron  Co N.  J. 

Southern  Pacific  Co Ky. 

Southern  Railway  Co Va. 

Standard  Oil  Co N.  J. 

Superior  &  Boston  Copper  Co Ariz. 

Superior  &  Pittsburgh  Copper  Co Minn. 

Superior  Copper  Co Mich. 

Swift  &  Co 111. 

Tamarack  Mining  Co Mich. 

Tennessee  Coal,  Iron  &  Railroad  Co Tenn. 

Tennessee  Copper  Co N.  J. 

*Texas  Co Texas 

*Texas  Pacific  Land  Trust Texas 

*Toledo  Railways  &  Light  Co Ohio. 

Twin  City  Rapid  Transit  Co N.  J. 

NOTE. —  Iowa,  Kansas,  Kentucky.  Maryland,  Ohio  and  Texas  tax  only  inheritance 
of  collaterals  and  strangers,  see  statutes  of  those  States,  Appendix. 


PART  V  -  -  PROCEDURE  347 

State  where 
Name   of   Company.  Corporation    organized. 

Union  Bag  and  Paper  Co N.  J. 

Union  Pacific  Railroad  Co Utah 

United  Boxboard  Co N.  J. 

United  Fruit  Co N.  J. 

United  Railways  Investment  Co N.  J. 

United  Shoe  Machinery  Corp N.  J. 

United  States  Cast  Iron  Pipe  &  Foundry  Co N.  J. 

United  States  Realty  &  Improvement  Co N.  J. 

United  States  Reduction  &  Refining  Co N.  J. 

United  States  Rubber  Co N.  J. 

United  States  Steel  Corp N.  J. 

Utah  Consolidated  Mining  Co N.  J. 

Utah  Copper  Co N.  J. 

Vandalia  Railroad  Co 111. 

Victoria  Copper  Mining  Co Mich. 

Virginia-Carolina  Chemical  Co N.  J. 

Virginia  Iron,  Coal  &  Coke  Co Va. 

Virginia  Railway  Co. . .  '. Va. 

Wabash  Pittsburgh  Terminal  Railway  Co.   (The) . . 

W.  Va.,  Ohio. 

Wabash  Railroad  Co 111.,  Mich.,  Mo.,  Ohio 

Wells  Fargo  &  Co Col. 

Western  Electric  Co 111. 

*Western  Maryland  R.  R.  Co Md. 

Western  Telephone  &  Telegraph  Co N.  J. 

*  Wheeling  &  Lake  Erie  Railroad  Co Ohio 

Winona  Copper  Co Mich. 

Wisconsin  Central  Railway  Co Wis. 

Wolverine  Copper  Mining  Co Mich. 

Wyandot  Copper  Co Mich. 

NOTE. —  Iowa,  Kansas,  Kentucky,  Maryland,  Ohio  and  Texas  tax  only  Inheritance 
of  collaterals  and  strangers,  see  statutes  of  those  States,  Appendix. 


348  INHERITANCE  TAXATION 

c.     COMPANIES  INCORPORATED  IN  STATES  THAT  DO  NOT  TAX 
NONRESIDENT  TRANSFERS. 

Following  is  a  list  of  the  principal  corporations  and 
joint  stock  companies  incorporated  or  formed  under  the 
laws  of  states  that  do  not  tax  nonresident  transfers. 

State  where 
Name   of   Company.  Corporation    organized. 

Adams  Express  Co N.  Y. 

American  Agricultural  Chemical  Co.  (The) Conn. 

American  Express  Co N.  Y. 

American  Locomotive  Co N.  Y. 

American  Pneumatic  Service  Co Del. 

American  Telephone  &  Telegraph  Co N.  Y. 

*American  Zinc,  Lead  &  Smelting  Co Me. 

Amoskeag  Manufacturing  Co N.  H. 

*  Arizona  Commercial  Copper  Co Me. 

Associated  Merchants-Co Conn. 

*  Atlantic,  Gulf  &  West  Indies  Steamship  Lines Me. 

Batopilas  Mining  Co.  (The) N.  Y. 

Boston  &  Albany  Railroad  Co Mass.,  N.  Y. 

*Boston  &  Corbin  Copper  &  Silver  Mining  Co Me. 

Boston  &  Lowell  Railroad  Co Mass. 

Boston  &  Maine  Railroad  Co Mass.,  N.  H.,  Me. 

Boston  &  Northern  Street  Railway  Co Mass. 

Boston  &  Providence  Railroad  Corp Mass. 

Boston  Elevated  Railway  Co Mass. 

Boston,  Revere  Beach  &  Lynn  Railroad  Co Mass. 

Brill  (J.  G.)  Co.  (The) Pa. 

Brooklyn  Rapid  Transit  Co N.  Y. 

Brooklyn  Union  Gas.  Co.  (The) N.  Y. 

Buffalo,  Rochester  &.Pittsburgh  Railway  Co. . .  .N.  Y.,  Pa. 

Butterick  Co.  (The) N.  Y. 

Cambria  Steel  Co Pa. 

Capital  Traction  Co.  (The) .Dist.  of  Columbia 

*  If  decedent  died  after  April  7,  1917,  transfers  of  stock  in  Maine  corporations 
are   taxable   under    statute   of   that    date. 


PART  V  —  PROCEDURE  349 

State  where 
Name   of   Company.  Corporation    organized. 

Central  &  South  American  Telegraph  Co N.  Y. 

Central  Vermont  Railway  Co Vt. 

Concord  &  Montreal  Railroad  Co.  (B.  &  M.) N.  H. 

(B.&M.) Vt. 

Connecticut  River  Railroad  Co.  (B.  &  M.) Mass.,  N.  H. 

Consolidated  Gas  Co N.  Y. 

Cramp  &  Sons  Ship  &  Engine  Building  Co.  (The  Win.)  .Pa. 

Crex  Carpet  Co Del. 

Delaware  &  Hudson  Co.  (The) N.  Y. 

Delaware,  Lackawanna  &  Western  Railroad  Co.  (The)  .Pa. 
*Draper  Co Me. 

Duluth-Superior  Traction  Co.   (The) Conn. 

East  Boston  Co Mass. 

*Eastern  Steamship  Co Me. 

Edison  Electric  Illuminating  Co.  (The) Mass. 

Erie  Railroad  Co N.  Y. 

Federal  Mining  &  Smelting  Co Del. 

Fitchburg  Railroad  Co Mass.,  N.  H.,  Vt.  &  N.  Y. 

*Galveston-Houston  Electric  Co Me. 

General  Chemical  Co N.  Y. 

General  Electric  Co N.  Y. 

Giroux  Consolidated  Mines  Co Del. 

Independent  Brewing  Co Pa. 

*Inspiration  Copper  Co Me. 

Interborough-Metropolitan  Co.   : N.  Y. 

Interborough  Rapid  Transit  Co N.  Y. 

*  International  Buttonhole  Machine  Co Me. 

International  Paper  Co N.  Y. 

*Island  Creek  Coal  Co Me. 

Kerr  Lake  Mining  Co N.  Y. 

Lackawana  Steel  Co N.  Y. 

Lehigh  Coal  &  Navigation  Co.  (The) Pa. 

Lehigh  Valley  Railroad  Co Pa. 

*  If  decedent  died  after  April  7,  1917,  transfers  of  stock  in  Maine  corporations 
are  taxable  under  statute  of  that  date. 


350  INHERITANCE  TAXATION 

State  where 
Name   of   Company.  Corporation    organized. 

Long  Island  Bailroad  Co.  (The) N.  Y. 

Mackay  Companies  (The)    Mass. 

*Maine  Central  Railroad  Co Me. 

Manhattan  Railway  Co N.  Y. 

Manufacturers  Light  &  Heat  Co.  (The)   Pa. 

Massachusetts  Electric  Companies   Mass. 

Massachusetts  Gas  Companies Mass. 

Mergenthaler  Linotype  Co N.  Y. 

*Mexican  Telephone  &  Telegraph  Co Me. 

*Mexico  Consolidated  Mining  &  Smelting  Co Me. 

Miami  Copper  Co Del. 

National  Fire  Proofing  Co Pa, 

*Nevada  Consolidated  Copper  Co Me. 

New  England  Cotton  Yarn  Co.  (The) Mass. 

New  England  Telephone  &  Telegraph  Co N.  Y. 

New  York  Central  &  Hudson  River  Railroad  Co N.  Y. 

New  York,  Chicago  &  St.  Louis  Railroad  Co.  (The) 

N.  Y.,  Ohio,  Ind.,  Pa. 

New  York  Dock  Co N.  Y. 

New  York,  New  Haven  &  Hartford  Railroad  Co. 

Conn.,  Mass.,  R.  I. 

New  York,  Ontario  &  Western  Railway  Co N.  Y. 

*Nipissing  Mines   Co Me. 

*Northern  Texas  Electric  Co Me. 

Old  Colony  Railroad  Co Mass. 

*01d  Dominion  Copper  Mining  &  Smelting  Co Me. 

Pacific  Mail  Steamship  Co N.  Y. 

Pennsylvania  Railroad  Co.   (The) Pa. 

Philadelphia  Co Pa. 

Philadelphia  Rapid  Transit  Co Pa. 

Pittsburgh  Brewing   Co Pa. 

Pittsburgh  Plate  Glass  Co Pa. 

Quicksilver  Mining   Co N.   Y. 

*  If  decedent  died  after  April  7,  1917,  transfers  of  stock  in  Maine  corporations 
are    taxable    under   statute   of    that    date. 


PART  V  —  PROCEDURE  351 

State  where 
Name   of   Company.  Corporation   organized. 

*Ray  Consolidated  Copper  Co Me. 

Reading  Co „ Pa. 

Reece  Button-Hole  Machine  Co Me. 

Reece  Folding  Machine  Co Me. 

Rotary  Ring  Spinning  Co Del 

Rutland  Railroad  Co Vt,  N.  Y. 

Sears,  Roebuck  &  Co N.  Y. 

Shannon   Copper   Co Del. 

*South  Utah  Mines  &  Smelters Me. 

Third  Avenue  Railroad  Co.  (The) N.  Y. 

Toledo,  St.  Louis  &  Western  Railroad  Co Ind. 

Tonopah  Mining  Co.,  Nevada  (The) Del. 

Torrington  Co Me. 

Union  Traction  Co.   (Phila.) Pa. 

United  Cigar  Manufacturers '  Co N.  Y. 

United  Dry  Goods  Companies Del. 

United  Gas  Improvement  Co.  (The) Pa- 
United  States  Express  Co N.  Y. 

*United  States  Smelting,  Refining  &  Mining  Co Me. 

*Utah-Apex  Mining   Co Me. 

West  End  Street  Railway  Co Mass. 

Western  New  York  &  Pennsylvania  Railway  Co. 

Pa.,  N.  Y. 

Western  Union  Telegraph  Co N.  Y. 

Westinghouse  Electric  &  Manufacturing  Co Pa. 

3.  The  Safe  Deposit  Box. 

a.     COMPTROLLER  MAY  INSPECT. 

The  statutes  of  all  the  states  where  there  are  large 
cities  require  notice  to  the  comptroller  or  tax  commission 
by  the  executor  or  administrator  before  the  securities  of 
a  decedent  deposited  with  a  safe  deposit  company  can 
be  delivered  or  a  bank  account  transferred. 

*   If  decedent  died  after  April  7.  1917,  transfers  of  stock  in  Maine  corporations 
are    taxable   under   statute  of   that   date. 


Safe  deposit  companies  were  inclined  to  contest  the 
right  of  the  state  to  step  in  between  them  and  their  cus- 
tomers and  the  test  case  in  New  York  resulted  in  their 
favor. 

People  v.  Mercantile  Safe  Deposit  Co.,  159  App.  Div.  98;  143  Supp. 
849. 

In  this  case  it  was  held  that  a  safe  deposit  company, 
in  renting  boxes  to  its  customers,  is  a  landlord  having  no 
custody  or  control  of  the  contents  or  physical  possession 
thereof;  and  it,  therefore,  was  not  liable  for  a  penalty  in 
failing  to  disclose  the  contents  of  such  a  box  belonging  to 
a  deceased  customer  to  an  agent  of  the  comptroller. 

This  case  was  not  taken  to  the  Court  of  Appeals  because 
a  case  in  Illinois,  where  the  same  question  was  tested,  went 
to  the  Supreme  Court  of  the  United  States  wrhere  an 
opposite  result  to  the  ruling  in  the  New  York  case  was 
reached. 

National  Safe  Deposit  Co.  V.  Stead,  250  111.  584;  95  N.  E.  973;  aff. 
232  U.  S.  58. 

The  United  States  Supreme  Court  reasoned  thus: 
"  The  contention  that  the  company  could  not  be  arbi- 
trarily charged  with  the  duty  of  supervising  the  delivery 
and  determining  to  whom  the  securities  belonged  is 
answered  by  the  fact  that  in  law  and  by  contract  it  had 
such  control  as  to  make  it  liable  for  allowing  unauthorized 
persons  to  take  possession.  Both  by  the  nature  of  its 
business  and  the  terms  of  its  contract  it  had  assumed  the 
obligation  cast  upon  those  having  possession  of  property 
claimed  by  different  persons. 

"  Nor  was  there  any  deprivation  of  property  nor 
arbitrary  imposition  of  a  liability  in  requiring  the  com- 
pany to  retain  assets  sufficient  to  pay  the  tax  that  might 
be  due  to  the  state.  There  are  many  instances  in  which 
by  statute,  the  amount  of  the  tax  due  by  one  is  to  be 
reported  and  paid  by  another, —  as  in  the  case  of  banks 


PART  V  —  PROCEDURE  353 

required  to  pay  the  tax  on  the  shares  of  a  stockholder. 
The  boxes  were  leased  with  the  knowledge  that 
the  state  had  so  legislated  as  not  only  to  protect  the 
interests  of  one  dying  after  the  rental,  but  also  to  secure 
the  payment  of  the  state  tax  out  of  whatever  might  be 
found  in  the  box  belonging  to  the  deceased. " 

Since  this  decision  safe  deposit  companies  throughout 
the  Union  have  acquiesced  with  the  demands  of  the  state 
for  a  right  to  inspect  the  contents  of  the  safe  deposit 
boxes  of  decedents. 

In  a  recent  case  in  New  York  where  a  surviving  joint 
tenant  demanded  access  and  the  state  comptroller  ordered 
the  box  sealed  and  the  personal  representative  of  the 
deceased  joint  tenant  were  also  opposed,  the  surviving 
joint  tenant  procured  a  mandatory  injunction,  but  it  was 
reversed  leaving  the  applicant  to  his  remedy  at  law. 
Moller  v.  Lincoln  S.  D.  Co.,  174  App.  Div.  458. 

b.     MAY  NOT  IMPOSE  ARBITRARY  CONDITIONS. 

But  the  state  comptroller  cannot  impose  arbitrary  con- 
ditions or  burden  the  estate  with  any  expense. 

"  Upon  receiving  notice,  it  is  the  duty  of  the  comp- 
troller to  have  his  representative  attend  and  make  a  memo 
of  the  assets;  and  if  the  comptroller  so  desires  he  may 
have  an  appraisement,  at  his  own  expense,  provided  he 
does  not  delay  the  administrator  in  the  performance  of 
his  statutory  duties  in  acquiring  control  of  the  property 
and  assets.  He  may  not  burden  the  estate  with  the 
expense  of  an  appraisal  and  withhold  his  consent  to 
delivery  until  this  command  has  been  complied  with.  The 
consent  is  not  a  matter  of  favor  but  a  right  which  the 
administrator  is  entitled  to  and  it  may  not  be  arbitrarily 
refused.  An  executor  upon  application  to  the  surrogate 
is  entitled  to  relief  from  such  refusal. " 

Matter  of  Rook,  98  Misc.  544. 
12 


354  INHERITANCE  TAXATION 

In  the  matter  of  non-resident  assets  the  transfer  agent 
in  New  York  of  a  New  Jersey  corporation  refused  to 
make  the  transfer  without  the  Comptroller's  consent. 
That  consent  was  not  given  because  the  particular  assets 
were  not  taxable.  The  delay  caused  a  loss  in  the  securi- 
ties of  $14,000  and  the  executors  sued  the  transfer  agent. 
It  was  held  that  the  transfer  agent  was  not  the  agent  of 
the  executor  and  owed  him  no  duty  and  was  not  liable. 

Dunham  v.  City  Trust  Co.,  115  App.  Div.  584;  101  Supp.  87;  aff. 
193  N.  Y.  642;  86  N.  E.  1123. 

o.     CONSENT  FOR  TRANSFER  OF  FUNDS. 

In  New  York:  "  It  is  the  practice  in  reference  to  the 
estates  of  resident  decedents  for  the  Comptroller  to  give 
a  written  consent  for  the  transfer  of  funds  in  bank,  and 
stocks,  bonds,  or  other  securities  as  soon  as  the  executor 
or  administrator  has  qualified  and  application  is  made 
therefor  by  such  representative  or  by  the  depositories 
named,  and  in  case  it  is  desired  to  transfer  the  contents 
of  a  safe-deposit  box,  the  Comptroller  will  have  a  repre- 
sentative present  to  examine  the  contents  of  such  box  and 
will  consent  in  writing  to  the  transfer  thereof  to  the 
proper  representative.  In  case  of  non-resident  decedents, 
where  ancillary  letters  have  not  been  issued  by  a  surrogate 
of  this  State,  the  consent  of  the  Comptroller  for  the 
delivery  or  transfer  of  the  securities,  etc.,  is  withheld 
until  the  question  of  the  taxability  of  the  property  within 
the  State  is  determined,  and  if  taxable,  the  tax  paid,  after 
which  the  written  consent  to  transfer  each  security  or 
deposit  will  be  given. 

"  In  several  of  the  largest  counties  it  has  been  the 
practice  for  the  Comptroller  to  give  the  resident  attorney 
a  power  of  attorney  to  issue  waivers  and  consents  for 
the  transfer  of  funds  of  a  resident  decedent  in  the  banks 
and  trust  companies  of  such  county  respectively,  and 


PAKT  V  —  PROCEDURE  355 

also  to  attend  and  represent  the  Comptroller  at  the  open- 
ing of  safe-deposit  boxes,  which  avoids  the  necessary  delay 
in  making  requests  and  obtaining  waivers  and  consents 
through  the  mails. ' ' 

McElroy  on  "  Transfer  Tax  Law." 

A  similar  practice  obtains  in  all  the  states  where  there 
are  large  cities.  The  details  can  be  learned  by  addressing 
the  official  or  department  in  the  list  foregoing. 

d.     PROPERTY  BELONGING  TO  ANOTHER. 

Property  belonging  to  another  found  in  safe  deposit 
box  of  decedent  renders  it  necessary  for  the  representa- 
tives of  the  estate  of  the  decedent  to  explain  its  presence 
there. 

Matter  of  Francis,  N.  Y.  L.  J.,  Aug.  12,  1913 ;  aff.  163  App.  Div.  957. 

As,  for  example  when  bonds  were  found  in  an  envelope 
endorsed  by  the  deceased  with  the  name  of  his  adopted 
daughter  the  surrogate  said: 

"  The  endorsement  on  the  paper  containing  the  bonds, 
constituted  a  declaration  by  the  decedent  that  the  bonds 
were  the  property  of  Florence  Elizabeth  Crusius.  This 
declaration  raises  a  presumption  that  the  bonds  were  her 
property.  The  presumption,  however,  was  rebutted  by  the 
testimony  of  the  executor.  He  testified  that  *  she  did  not 
know  that  such  bonds  were  in  existence,  or  that  the  papers 
in  reference  to  it  gave  her  the  bonds.  There  is  no  proof 
of  a  gift;  on  the  contrary,  the  evidence  shows  that  the 
bonds  were  never  delivered  by  the  decedent  to  Florence 
Elizabeth  Cnisius.  It  must  therefore  be  held,  for  the 
purpose  of  this  proceeding,  that  the  decedent  did  not  make 
a  valid  gift  inter  vivos  of  the  bonds  to  Florence  Elizabeth 
Crusius." 

Matter  of  Crusius,  N.  Y.  L.  J.,  Feb.  26,  1914. 


356  LNHEBITANCE  TAXATION 

4.  Inventory. 

a.    MUST  BE  FILED  BY  EXECUTOR. 

All  the  statutes  require  the  executor  or  administrator 
to  file  an  inventory,  and,  in  case  of  large  estates  he  may 
be  required  to  fill  half  a  dozen,: —  one  in  the  state  of  domi- 
cile, one  with  the  Collector  of  Internal  Revenue  for  the 
Federal  Tax,  and  an  inventory  of  the  personal  or  real 
property  of  a  decedent  situated  in  a  foreign  state. 

The  will  cannot  dispense  with  an  inventory. 
Matter  of  Morris,  138  N.  C.  259;  50  S.  E.  682. 

And  it  must  include  personal  property  without  the  state 
even  though  it  can  never  come  into  the  executor's  posses- 
sion. 

Appeal  of  Hopkins,  77  Conn.  644,  645 ;  60  A.  657. 
State  v.  Sullen,  143  Wis.  512;  128  N.  W.  109. 

It  has  been  held  that  the  state  must  show  that  the 
estate  is  taxable  before  it  can  compel  the  executor  to  file 
an  inventor}7. 

In  re  Estate  of  Stone,  132  la.  136;  109  N.  W.  455. 

And  that  he  cannot  be  compelled  to  answer  questions 
concerning  the  property  of  decedent  unless  the  state  has 
jurisdiction  to  impose  a  tax. 

Matter  of  Bishop,  82  App.  Div.  112;  81  Supp.  474. 

But  if  such  jurisdiction  exists  he  may  be  punished  for 
contempt  on  failure  to  answer  proper  questions. 
Matter  of  David  Kennedy,  113  App.  Div.  4-8;  99  Supp.  72. 

But  an  executor  of  a  resident  decedent  must  file  an 
inventory  —  he  has  no  discretion. 

Hooper  v.  Bradford,  178  Mass.  95;  59  N.  E.  678. 

And  a  decree  fixing  tax,  rendered  in  the  absence  of  an 
inventory,  must  be  reversed,  although  it  is  claimed  that 
all  necessary  information  was  before  the  court. 
People  v.  SJiolem,  244  HI.  502;  91  N.  E.  704. 


PART  V  —  PROCEDURE  357 

The  court  said  in  the  Sholem  case: 

"  The  people  have  the  right  to  compel  the  filing  in  the 
County  court  of  the  inventories  required  to  be  filed  by  the 
executor  and  by  surviving  partners  to  aid  in  determining 
the  extent  and  value  of  the  estate  for  inheritance  tax 
purposes,  and,  while  such  inventory  is  not  conclusive,  the 
people  have  the  right  to  have  the  benefit  thereof  without 
having  the  burden  of  proving  the  value  of  the  estate  by 
examining  witnesses. 

b.     FORM  or  AFFIDAVIT. 

The  following  form  of  executor's  or  administrator >s 
affidavit  used  in  New  York  county  may  be  of  assistance 
in  preparing  the  inventory: 

SURROGATE'S  COURT, 

COUNTY  OF  NEW  YORK. 


In  the  Matter 
of 

The    Appraisal,    under    the    Transfer 
Tax  Law,  of  the  Estate  of 
.  Deceased. 


STATE  OF  NEW  YORK, 

COUNTS  OF  NEW  YORK,         -  ss. : 
CITY  OF  NEW  YORK,  ) 

,  Executor  of  the  estate  of  the  above- 
named  decedent  being  duly  sworn  in  this  proceeding  for 
the  determination  of  the  tax,  if  any,  to  be  paid  upon  the 
assets  of  the  said  estate  under  the  Law  in  Relation  to 
Taxable  Transfers  of  Property,  deposes  and  says: 

First. — That  the  said  decedent  died  a  resident  of  the 
County  of  New  York,  State  of  New  York,  on  the 


358  INHERITANCE  TAXATION 

day  of leaving  a  Last  Will  and  Testa- 
ment, a  copy  of  which  is  herewith  submitted,  which  was 
duly  admitted  to  probate  by  the  Surrogate's  Court  of 

New  York  County,  on  the of and  that 

Letters  testamentary  were  duly  issued  by  the  said  Sur- 
rogate's Court  of  New  York  County  on  the of 

to  this  deponent  whose  post  office  address 

is  

Second. — That  as  such  executor  deponent  is  personally 
familiar  with  the  affairs  of  said  estate,  the  property 
constituting  the  assets  thereof  and  their  fair  market  value, 
and  with  the  debts,  expenses  and  charges  properly  and 
legally  allowable  as  deductions  therefrom.  That  the 
decedent  at  the  time  of  her  death  had  no  safe  deposit 
box. 

That  to  the  best  of  deponent's  knowledge,  information 
and  belief,  there  is  no  person  better  informed  than  depon- 
ent upon  the  said  affairs  of  this  estate. 

Third: — That  Schedule  A  hereunto  annexed  in  its 
various  sub-schedules  sets  forth  fully  and  in  detail  all 
the  real  property  in  the  state  of  New  York,  and  all  the 
personal  property  wheresoever  situated,  owned  by  the 
decedent  or  in  which  said  decedent  had  any  right  title 
or  interest  at  the  time  of  her  death,  or  of  which  she  made 
any  gift,  grant  or  conveyance  in  contemplation  of  death, 
or  to  take  effect  at  or  after  death,  or  which  by  reason 
thereof  fell  into  or  became  part  of  the  assets  of  this  estate 
by  reversion,  remainder  or  otherwise,  excepting  such  as 
may  have  passed  by  virtue  of  the  exercise  by  the  decedent 
of  any  power  of  appointment  vested  in  her  by  the  will  or 
deed  or  other  instrument  of  another,  and  enumerated  in 
Schedule  C. 

Schedule  Al  sets  forth  each  and  every  parcel  of  real 
estate  in  the  state  of  New  York  of  which  decedent  died 
seized  and  possessed,  or  in  which  she  had  any  right,  title 


PART  V  —  PROCEDURE  359 

or  interest,  together  with  a  statement  of  the  liens  and 
encumbrances  upon  each  at  the  date  of  death,  giving  in 
the  case  of  mortgages,  the  date,  place,  liber  and  page  of 
record  thereof.  It  also  sets  forth  in  the  first  marginal 
column  the  assessed  valuation  of  each  of  said  parcels  and 
in  the  second  marginal  column  the  estimated  market  value 
thereof  (as  appraised  by  a  competent  expert  in  real  estate 
values,  whose  supplemental  affidavit  is  herewith  sub- 
mitted). 

Schedule  A2  sets  forth  all  of  the  moneys  left  by  the 
decedent  at  the  time  of  her  death,  whether  in  her  immedi- 
ate possession,  standing  to  her  credit  or  in  which  she  had 
any  right,  title  or  interest,  in  banks  of  deposit,  savings 
banks,  trust  companies,  or  other  institutions,  whether 
individually  or  in  trust  for  or  jointly  with  any  other  person, 
giving  also  separately  the  accrued  interest  thereon,  if  any, 
down  to  the  last  interest  day  prior  to  decedent's  death 
in  the  case  of  savings  banks,  and  down  to  the  date  of 
decedent's  death  in  all  other  cases. 

Schedule  A3  sets  forth  all  wearing  apparel,  jewelry, 
silverware,  pictures,  books,  works  of  art,  household  fur- 
niture, horses,  carriages,  automobiles,  boats,  and  any  and 
all  other  personal  chattels  of  whatsoever  kind  or  nature, 
left  by  the  decedent,  together  with  the  fairly  estimated 
market  value  thereof  (as  appraised  by  a  competent  expert, 
whose  supplementary  affidavit  is  herewith  submitted). 
It  also  contains  a  statement  of  all  bonds  and  mortgages 
held  by  decedent  and  of  all  claims  due  and  owing  decedent 
at  the  time  of  her  death,  and  of  all  the  promissory  notes 
or  other  instruments  in  writing  for  the  payment  of  money 
of  which  she  died  possessed,  of  whatsoever  nature,  with 
interest  thereon,  if  any  (except  such  as  are  included  in 
the  statement  of  the  decedent's  interest  in  a  co-partner- 
ship or  business  set  forth  in  Schedule  A5)  giving  the  face 
value  and  estimated  fair  market  values  thereof  and  if 


360  INHERITANCE  TAXATION 

such  estimated  fair  market  values  be  less  than  the  face 
value,  setting  forth  in  brief  the  reason  for  such  depre- 
ciation as  to  each  item.  Said  Schedule  A3  also  contains 
a  statement  of  any  and  all  moneys  payable  to  the  estate 
from  life  insurance  policies  carried  by  decedent. 

Schedule  A4  sets  forth  all  the  corporate  stocks,  bonds 
and  accrued  interest  thereon  to  the  date  of  decedent's 
death,  or  other  investment  securities  owned  by  the  dece- 
dent at  the  time  of  her  death,  with  the  market  value 
thereof  at  such  time,  and  in  the  case  of  rare  and  unlisted 
corporate  securities  giving  the  state  of  incorporation  of  the 
corporation  issuing  the  same,  its  capitalization,  the  value 
and  nature  of  its  assets,  its  liabilities,  its  surplus,  the  book 
value  of  its  stock,  the  dividends  paid,  and  any  other  facts 
which  may  be  pertinent  affecting  the  value  of  said 
securities. 

Schedule  A5  sets  forth  the  interest  of  decedent  at  the 
time  of  her  death  in  any  co-partnership  or  business,  stat- 
ing the  nature  and  location  thereof,  the  total  capital 
employed,  the  gross  profits,  expenses  and  net  profits  of 
the  business  for  at  least  three  years  prior  to  decedent's 
death,  and  any  other  facts  pertaining  to  such  business  as 
may  be  pertinent  to  a  fair  and  just  appraisal  of  decedent 's 
interest  in  said  business  and  the  goodwill  thereof. 

Schedule  A6  sets  forth  in  itemized  form,  together  with 
the  fair  market  value  thereof,  any  other  property  owned 
or  left  by  decedent  at  the  time  of  her  death  and  not 
included  in  the  preceding  sub-schedules. 

Fourth. —  That  Schedule  B  hereunto  annexed  in  its 
various  sub-schedules  sets  forth  the  funeral  expenses, 
administration  expenses  and  counsel  fees  paid  or  incurred 
in  connection  with  the  estate,  together  with  the  debts  and 
claims  against  the  decedent  (except  liens  and  incum- 
brances  upon  real  estate),  whether  allowed,  paid  or  con- 
tested and  rejected  by  the  executor.  Deponent  also  claims 


PART  V  —  PROCEDURE  361 

to  be  allowed  as  a  deduction  herein  the  lawful  commissions 
of  the  executor. 

Schedule  Bl  sets  forth  the  funeral  expenses.  Schedule 
B2  sets  forth  the  expenses  of  administration  and  counsel 
fees  paid  or  estimated.  Schedule  B3  sets  forth  the  valid 
debts  due  and  owing  by  decedent  at  the  time  of  her  death 
and  allowed  as  just  and  fair  by  the  executor,  together 
with  a  separate  list  of  such  claims  as  have  been  contested 
or  rejected  by  her  (except  such  as  enter  into  the  com- 
putation of  decedent's  interest  in  any  co-partnership  or 
business  as  set  forth  in  Schedule  A5).  Schedule  B3  also 
set  forth  all  items  claimed  by  the  executor  as  proper 
deductions  herein,  and  not  included  in  the  prior  sub- 
schedules. 

Fifth. —  That  Schedule  C  hereunto  annexed  sets  forth 
all  the  property,  real  and  personal,  which  passed  at 
decedent's  death  by  virtue  of  the  exercise  by  her  of  any 
power  of  appointment  vested  in  her  by  the  will,  deed  or 
other  instrument  of  another,  together  with  the  fair  market 
value  of  each  and  every  item  thereof  and  a  statement  in 
brief  of  the  sources  and  derivation  of  such  power,  copies 
of  which  will,  deed  or  other  instrument  are  submitted  here- 
with. Said  Schedule  C  also  sets  forth  all  transfers  of 
any  property  made  by  way  of  gifts,  either  in  trust  or  other- 
wise, by  decedent  at  any  time  prior  to  her  death,  which 
said  transfers  were  made  in  contemplation  of  death  or  to 
take  effect  at  or  after  death. 

Sixth. —  That  Schedule  D  hereunto  annexed  contains  a 
statement  of  the  names  of  all  persons  beneficially  inter- 
ested in  this  estate  at  the  time  of  decedent's  death,  the 
nature  of  their  respective  interests,  their  relationship,  if 
any,  to  decedent,  together  with  the  ages  at  the  time  of 
decedent's  death  of  all  minors,  annuitants  and  benefi- 
ciaries for  life  under  decedent's  will,  if  any.  It  also  con- 
tains a  statement  showing  which  of  the  beneficiaries 


362  INHERITANCE  TAXATION 

named  in  decedent's  will,  if  any,  died  prior  to  decedent, 
the  dates  of  their  deaths,  their  survivors,  and  the  relation- 
ship of  such  survivor  to  decedent. 

Seventh. —  That  deponent  has  made  due  and  diligent 
search  for  property  of  •  every  kind,  nature  and  descrip- 
tion left  by  the  decedent,  and  has  been  able  to  discover 
only  that  set  forth  in  Schedule  A,  and  that  no  information 
of  any  other  property  of  the  decedent  has  come  to  his 
knowledge,  and  that  he  verily  believes  that  decedent  left 
no  property  except  as  therein  set  forth.  That  all  the 
sums  claimed  as  deductions  in  Schedule  B  are  lawful,  just 
and  fair,  that  to  the  best  of  deponent's  knowledge,  infor- 
mation and  belief  the  decedent  made  no  gift,  grant  or 
conveyance  of  any  property,  real  or  personal,  in  con- 
templation of  death,  or  to  take  effect  at  or  after  death, 
except  as  may  be  so  specifically  set  forth  in  the  appropriate 
sub-schedule  of  Schedule  A. 

Deponent  further  says  that  wherever  in  any  of  said  sub- 
schedules  the  word  "  none  "  has  been  written  in  or  wher- 
ever such  sub-schedule  has  been  left  blank,  such  word  or 
omission  is  to  be  taken  as  equivalent  to  an  affirmative 
allegation  by  deponent  that  the  decedent  left  no  property 
of  the  kind  to  which  sub-schedule  relates. 


Signature. 

Sworn  to  before  me  this 
....day  of ,19.. 

c.     PREPARATION  OF  INVENTORY. 

Schedule  A,  1. —  Should  set  forth,  by  the  description  in 
the  deed,  each  parcel  of  real  estate,  within  the  state,  of 
which  the  deceased  died  seized;  or  in  which  he  had  any 
right,  title  or  interest. 

If  it  is  not  within  the  state  it  should  not  be  included, 
because  not  taxable. 

Matter  of  Swift,  137  N.  Y.  77;  32  N.  E.  1096. 


PART  V  —  PROCEDURE  363 

The  improvements  or  buildings  on  the  property  should 
be  described;  if  the  property  is  unimproved  it  should  be 
so  stated.  Accrued  rents  prior  to  testator's  death  should 
be  included. 

Matter  of  Keefe,  164  N.  Y.  352. 

The  last  assessed  valuation,  prior  to  death,  on  each 
parcel,  should  be  given.  It  is  the  practice  in  most  juris- 
dictions to  add  the  supplementary  affidavit  of  an  expert 
giving  his  valuation  of  the  premises.  If  there  have  been 
sales  in  the  vicinity  prior  to  death  the  affidavit  should 
include  a  statement  of  them  as  this  is  the  best  evidence 
of  value. 

Matter  of  Arnold,  114  App.  Div.  244;  99  Supp.  740. 

As  mortgages  are  deducted  from  the  value  of  the  real 
estate  they  should  be  set  forth,  if  there  are  any  on  the 
property. 

Matter  of  Button,  3  App.  Div.  308;  38  Supp.  277;  aff.  149  N.  Y.  618; 
44  N.  E.  1128. 

Taxes  which  become  a  lien  prior  to  death  should  also 
be  set  forth  here. 

Matter  of  Babcock,  115  N.  Y.  450;  22  N.  E.  263. 
Matter  of  Freund,  143  App.  Div.  335;  28  Supp.  48;  aff.  202  N.  Y. 
556;  95  N.  E.  1129. 

If  dower  is  claimed  as  a  deduction  the  claim  should  be 
set  forth  here  and  the  date  of  the  birth  of  the  widow 
should  be  given  in  order  that  the  value  of  her  dower 
interest  may  be  calculated  under  the  mortality  tables. 

Devolution  of  title  should  be  shown  where  the  interest 
is  other  than  fee  simple  in  order  to  indicate  how  the  inter- 
est was  created. 

Schedule  A2  —  Cash  on  hand  and  on  deposit. 

All  moneys  left  by  the  decedent  at  the  time  of  his  death, 
in  banks  of  deposit,  savings  banks,  trust  companies,  or 
other  institutions,  should  be  itemized  and  set  forth  in  this 


364  INHERITANCE  TAXATION 

schedule.      This    means    money    wherever    situated,    and 
deposits  no  matter  whether  in  New  York  or  foreign  banks. 
Joint  and  trust  accounts  should  be  set  forth  in  this 
schedule. 

See  ante,  Part  II,  F,  p.  130. 

Interest  accrued  and  unpaid,  distinct  from  the  principal, 
should  be  set  forth  separately.  In  the  case  of  savings 
banks,  interest  should  be  given  down  to  the  last  interest 
day  prior  to  decedent's  death;  in  all  other  cases  down  to 
the  date  of  death.  Accrued  interest  to  date  of  death  is 
subject  to  the  tax. 

Matter  of  Vassar,  127  N.  Y.  1-8. 
Matter  of  Hewitt,  181  N.  Y.  547. 

Schedule  A3  —  Mortgages,  promissory  notes,  claims  due 
decedent,  life  insurance. 

Mortgages  held  by  decedent  should  be  included  in  this 
schedule.  The  names  of  the  parties,  the  date  of  the 
mortgage,  a  brief  description  of  the  premises  mortgaged, 
the  amount  of  the  principal,  the  interest  rate  and  the 
interest  dates,  the  place,  date,  liber  and  page  of  recording 
mortgage,  should  be  given.  If  any  amount  has  been  paid 
on  account  of  the  principal  of  the  mortgage,  so  state. 

Accrued  interest  on  mortgages  to  date  of  decedent's 
death  should  be  separately  stated. 

All  claims  in  favor  of  the  estate  should  be  included 
whether  valuable  or  worthless  and  if  in  the  form  of  notes 
or  other  written  instruments  for  the  payment  of  money 
they  should  be  set  forth  giving  date,  name  of  maker,  date 
when  due,  rate  of  interest,  amount  of  interest  accrued  to 
date  of  death. 

A  debt  forgiven  by  the  will  should  be  set  forth  in  this 
schedule  as  an  asset  of  the  estate. 

Matter  of  Bartlett,  4  Misc.  380 ;  25  Supp.  990. 

For  further  discussion  as  to  such  debts  see  ante  p.  297, 
and  cases  there  cited. 


PART  V  —  PROCEDURE  365 

Pictures,  books,  jewelry,  silverware,  works  of  art,  etc., 
as  well  as  furniture,  carriages,  horses,  motor  cars,  wear- 
ing apparel  and  all  other  personal  chattels,  must  be  set 
forth  in  this  schedule. 

They  must  be  itemized. 
Matter  of  Leggett,  N.  Y.  L.  J.,  Jan.  13,  1911. 

Where  the  pictures  are  of  value  the  name  of  the  paint- 
ing and  of  the  artist  should  be  given. 
Matter  of  Kahn,  N.  Y.  L.  J.,  March  16,  1912. 

Schedule  A4  —  Corporate  stocks  and  bonds. 

In  this  schedule  should  be  set  forth  all  corporate  securi- 
ties, including  any  shares  in  joint  stock  associations. 

Interest  accrued  to  date  of  death  on  bonds  and  divi- 
dends declared  on  stock  even  though  paid  after  death 
are  part  of  the  estate  and  should  be  separately  stated. 
Matter  of  Kernochan,  104  N.  Y.  618;  11  N.  E.  149. 

The  denomination  of  the  bond  should  be  given  and  if  the 
corporation  has  issued  more  than  one  kind  of  bond  that 
owned  by  the  decedent  should  be  identified. 

In  listing  the  stock,  state  the  name  of  the  corpora- 
tion, and  if  the  corporation  issues  different  kinds  of  stock 
indicate  which.  State  the  par  value  and  the  market  value. 

The  stock  is  taxable  though  carried  in  the  name  of  the 
brokers. 

Matter  of  Newcomb,  71  App.  Div.  606;  76  Supp.  222;  aff.  172  N.  Y. 
608;  64  N.  E.  1123. 

Securities  pledged  as  collateral  should  be  placed  in  this 
schedule  calling  attention  to  the  fact  that  the  securities 
were  pledged  at  the  date  of  decedent's  death,  and  that 
the  amount  for  which  they  are  pledged  is  set  forth  under 
Schedule  B3.  A  statement  should  be  added  that  the 
securities  so  given  are  the  same  securities  for  which  the 
debt  is  set  forth  under  B-3. 


366  INHERITANCE  TAXATION 

Schedule  A5 — Interest  of  decedent  in  any  copartnership 
or  business. 

In  this  schedule  should  be  set  forth  the  interest  of  dece- 
dent at  the  time  of  his  death  in  any  co-partnership  or 
business,  stating  the  nature  and  location  thereof,  the  total 
capital  employed,  the  gross  profits,  expenses  and  net  pro- 
fits of  the  business  for  at  least  three  years  prior  to  deced- 
ent's death. 

If  the  decedent  was  not  interested  in  any  co-partnership 
or  business  say  so  and  state  his  occupation  or  profession. 

Schedule  A6  —  Property  not  included  in  other  schedules. 

In  this  schedule  should  be  set  forth  any  property  left 
by  decedent  of  whatever  kind  and  nature  not  included  in 
the  foregoing  schedules  except  property  passing  by  power 
of  appointment  which  should  be  set  forth  in  'Schedule  C. 

When  there  is  an  interest  in  the  estate  of  another  deced- 
ent it  should  be  set  forth  in  this  schedule;  also  a  remain- 
der interest  where  there  is  a  surviving  life  tenant.  In 
the  latter  case  the  age  of  the  life  tenant  should  be  given 
so  the  value  of  his  interest  may  be  calculated. 

There  should  be  set  out  an  itemized  statement  of  the 
assets  of  the  estate  in  which  decedent  had  the  remainder 
interest.  These  assets  must  be  given  with  the  same  detail 
as  though  they  were  the  assets  of  the  estate  of  the  decedent. 

Schedule  Bl. —  Funeral  Expenses. 

The  undertaker's  bill,  cost  of  advertising  death  notice, 
and  expense  of  funeral  service  should  all  be  separately 
stated. 

The  cost  of  a  tombstone  is  allowed  as  a  deduction. 

Matter  of  Edgerton,  35  App.  Div.  125;  54  Supp.  700;  aff.  158  N.  Y. 
671;  52  N.  E.  1124. 

And  of  a  cemetery  lot. 

Matter  of  Maverick,  135  App.  Div.  44;  119  Supp.  914;  aff.  198  N.  Y. 
618;  92  N.  E.  1084. 


PART  V  —  PROCEDURE  367 

Schedule  B2  —  Administration  expenses. 

Under  this  head  should  be  set  forth  the  expenses  of 
administration  which  include  the  counsel  fees  and  disburse- 
ments necessary  in  the  administration  of  the  estate. 

Matter  of  Westurn,  152  N.  Y.  93-102;  46  N.  E.  315. 
Matter  of  Purdy,  24  Misc.  301 ;  53  Supp.  735. 

Counsel  fees  must  be  reasonable. 
Matter  of  Thomas,  39  Misc.  223;  79  Supp.  571. 

Expenses  of  litigation  are  allowed  when  incurred  to 
conserve  the  estate. 

Matter  of  Gihon,  169  N.  Y.  443;  62  N.  E.  561. 

But  disallowed  when  arising  from  disputes  among  the 
beneficiaries. 

Matter  of  Westurn,  152  N.  Y.  93;  46  N.  E.  315. 

Commissions  of  the  executor  or  administrator  are 
allowed;  but  not  where  the  will  provides  that  they  shall 
act  without  compensation. 

Matter  of  Vanderbilt,  68  App.  Div.  27,  30;  74  Supp.  450. 

But  not  on  specific  bequests. 
Matter  of  Kings  County  Trust  Co.,  69  Misc.  531 ;  127  Supp.  879. 

Or  on  real  estate  unless  the  will  provides  for  its  sale. 

Matter  of  Sounders,  77  Misc.  54,  67;  137  Supp.  438;  aff.  156  App. 
Div.  891. 

In  which  case  broker's  commission  are  allowed  also. 

Matter  of  Rothschild,  63  Misc.  615 ;  118  Supp.  654. 
Matter  of  Shields,  68  Misc.  264;  124  Supp.  1003. 

Temporary  administrators'  commissions  are  allowed. 
Matter  of  Hurst,  111  App.  Div.  460;  97  Supp.  697. 

Trustees'  commissions  are  a  proper  deduction. 

Matter  of  Silliman,  79  App.  Div.  98;  80  Supp.  336;  aff.  175  N.  Y. 
513;  67  N.  E.  1090. 


368  INHERITANCE  TAXATION 

As  to  double  commissions  where  executors  are  also 
trustees  vide  ante,  Pt  IV,  under  "  Deductions."  p.  305. 

Schedule  B3  —  Debts  of  decedent. 

This  schedule  should  set  forth  all  the  debts  of  and 
claims  against  the  decedent. 

Recite  which  have  been  paid  or  allowed.  If  any  claims 
have  been  rejected  state  which  they  are,  and  give  the 
status  of  each  rejected  claim. 

Mortgage  debts  belong  in  Schedule  A,  not  in  this 
schedule. 

Doubtful  claims  should  not  be  allowed  as  a  deduction 
but  should  be  recited  in  the  appraiser's  report,  and  also 
in  the  order  fixing  tax  that  the  question  of  the  deduction 
is  postponed  until  the  determination  of  the  claim. 

Matter  of  Dimon,  82  App.  Div.  107;  81  Supp.  428. 

Where  the  estate  has  indemnity  for  a  claim  against  it 
the  indemnity  must  be  set  off  against  the  debt. 
Natter  of  Skinner,  106  App.  Div.  217,  94  Supp.  144. 

Claims  barred  by  the  statute  of  limitations  should  not 
be  deducted. 
See  generally: 

Hamlin  v.  Smith,  72  App.  Div.  601;  76  Supp.  258. 
Holley  v.  Gibbons,  176  N.  Y.  520 ;  68  N.  E.  889. 
Schutz  v.  Morette,  146  N.  Y.  137;  40  N.  E.  780. 
Butler  v.  Johnson,  111  N.  Y.  204;  18  N.  E.  643. 

And  generally  if  there  is  a  defense  to  any  claim  against 
the  estate  and  the  executor  or  administrator  intends  to 
reject  it  —  as  a  claim  barred  by  the  statute  of  frauds  — 
the  defense  should  be  stated  and  the  tax  as  to  the  amount 
of  the  claim  should  be  suspended  —  or  the  deduction  dis- 
allowed. 

Schedule  B4  —  Deductions  claimed  and  not  included  in 
the  preceding  sub-schedules. 

In  this  schedule  should  be  set  forth  every  deduction 


PART  V  —  PROCEDURE  369 

claimed  that  is  not  classified  as  a  funeral  expense,  an  ex- 
pense of  administration  or  a  debt  of  the  decedent  They 
must  be  separately  stated  and  itemized. 

Matter  of  Friedlander,  N.  Y.  L.  J.,  March  8,  1911. 

Exemptions  are  not  included  under  this  head.  They  are 
not  deductions  from  the  gross  estate  and  have  nothing 
to  do  with  the  inventory  but  are  allowed  where  the  tax 
is  fixed  by  the  surrogate. 

Schedule  C. —  Property  passing  by  decedent's  exercise 
of  any  power  of  appointment. 

If  there  was  a  power  of  appointment  which  was  not 
exercised  the  fact  should  be  stated. 

All  the  assets  must  be  set  forth  with  the  same  detail 
and  particularity  as  in  the  main  schedules. 

If  a  power  of  appointment  has  been  created  by  the 
will  that  fact  should  be  set  forth  and  the  assets  covered  by 
the  power  separately  stated,  as  taxation  as  to  them  must 
be  suspended  until  it  is  determined  whether  they  pass 
under  the  will  of  the  donor,  in  case  of  failure  to  exercise 
the  power.  As  to  this  subject  vide  ante  —  "Powers  of 
Appointment." 

Schedule  D. —  Beneficiaries  and  their  interest. 

The  statement  should  include,  as  accurately  as  possible, 
the  names  and  addresses  of  the  beneficiaries,  the  nature 
of  their  respective  interests,  their  relationship,  if  any,  to 
the  decedent,  together  with  the  ages  at  the  time  of  dece- 
dent's death  of  all  minors,  annuitants  and  beneficiaries  for 
life  under  decedent's  will,  if  any. 

It  should  also  state  if  any  of  the  beneficiaries  named 
in  decedent's  will,  died  prior  to  decedent. 

Morgan  v.  Cowie,  49  App.  Div.  612-615;  63  Supp.  608. 

If  the  devise  or  bequest  to  beneficiaries  who  prede- 
cease testator  does  not  fall  into  the  residuary  estate  then 
the  facts  should  be  given  showing  to  whom  the  interest 
goes. 


370  INHERITANCE  TAXATION 

In  case  of  an  adopted  child  the  facts  should  be  set 
forth  showing  the  adoption. 

Matter  of  Butler,  58  Hun  400 ;  12  Supp.  201 ;  aff.  136  N.  Y.  649 ;  32 
N.  E.  1016. 

And  if  "  mutually  acknowledged  "  the  facts  bringing 
the  beneficiary  within  the  statute  must  be  clearly  estab- 
lished by  affidavit  or  testimony  if  the  latter  is  required. 

Matter  of  Birdsall,  22  Misc.  180-187;  49  Supp.  450;  aff.  43  App.  Div. 

624;  60  Supp.  1133. 

Matter  of  McMurray,  96  App.  Div.  128 ;  89  Supp.  71. 
Matter  of  Davis,  98  App.  Div.  546-549;  90  Supp.  244;  revd.  on  other 

points  184  N.  Y.  299;  77  N.  E.  259. 

The  beneficiary  is  competent  witness  to  give  evidence 
upon  the  question  of  the  relation  and  the  acknowledgment 
thereof. 

Matter  of  Brundage,  31  App.  Div.  348-352. 

d.     FORM  OF  INVENTORY. 

Following  is  the  inventory  filed  in  a  recent  litigated 
case  arising  in  New  York  County: 

AFFIDAVIT  AND  SCHEDULES 

SCHEDULE  A. 
A-l. —  Real  property. 

Assessed  value  Value  as  ap- 

for  year  of  praised  in 

decedent's  Estimated           this  proceed- 

death  market  value           ing  Equity 

Undivided  one-fourth  in- 
terest in  Lot  No.  1  on 
Map  of  Prospect  Hill, 
Pelham  Manor,  Town 
Of  Pelham  Westchester 
County,  New  York. 
Total  lot  assessed  at 
$2,000.  Decedent's  one- 
fourth  interest  only ...  $50000  $93750  $93750 


PAKT  V  —  PROCEDURE  371 

Assessed  value  Value  as  ap- 

for  year  of  praised  in 

decedent's  Estimated           this  proceed- 

death  market  value          ing  Equity 

Undivided  one-half  in- 
terest in  Lot  350  on 
Map  of  Pelhamville, 
Town  of  Pelham,  West- 
chester  County,  New 
York.  Total  lot  as- 
sessed at  $800.  De- 
cedent 's  one-half  in- 
terest only  $400  00  $850  00  $850  00 

Undivided  one-half  in- 
terest in  Lot  No.  371  on 
Map  of  Pelhamville, 
Town  of  Pelham,  West- 
chester  County,  New 
York.  Total  lot  as- 
sessed at  $400.  De- 
cedent 's  one-half  in- 
terest only  200  00  500  00  500  00 


$2,287  50   $2,287  50 


SCHEDULE  A. 
A-2. —  Cash  in  hand  and  on  deposit. 

Value  as  ap- 
praised in  this 
Amount  proceeding 

Balance   standing  to  credit   of 

decedent    in    his    account    at 

National  Park  Bank $8,465  44       $8,465  44 

At  Equitable  Trust  Company.  23  93  23  93 


372 


INHERITANCE  TAXATION 


Fonr  certificates  of  deposit  in 

United  States  Trust  Co.  as 

follows : 
Certificate  No.  B-5109 

Accrued  interest 

Certificate  No.  B-18966 

Accrued  interest   

Certificate  No.   B-34517 

Accrued  interest   

Certificate  No.  38657 

Accrued  interest 


Savings  bank  accounts  as  fol- 
lows, with  accrued  interest 
to  July  1st,  1914: 

East  Eiver  Savings  Bank  No. 
90735  

Emigrant  Industrial  Savings 
Bank  No.  327283 

Bank  for  Savings  No.  687659.. 

Bank  for  Savings  No.  687965.. 

Seamen 's  Bank  for  Savings 
No.  330709  

Seamen's  Bank  for  Savings 
No.  332812  

Greenwich  Savings  Bank  No. 
279177  

Bowery  Savings  Bank  No. 
755122  

Bowery  Savings  Bank  No. 
754977  . 


Amount 


Value  as  ap- 
praised in  this 
proceeding 


$1,000  00 

37485 

2,500  00 

647  15 

3,000  00 

380  59 

18,000  00 

392  25 


$3,447  33   $3,447  33 


114  76 

1,048  68 

974  73 


114  76 

1,048  68 

974  73 

1,453  07 

1,052  06 

140  25 

2,817  64 
2,949  56 


$48,782  29  $48,782  29 


PART  V  —  PROCEDURE  373 

SCHEDULE  A. 

A-3. — Personal  chattels — bonds   and  mortgages,  promis- 
sory notes,  claims,  insurance,  etc. 
Bonds  and  mortgages   as   fol-  Estimated          JS^'S. 

1        ,  market  value  proceeding 

Cor.  Johnson  &  Union  Ave- 
nues, Brooklyn $12,000  00  $12,000  00 

4*4%    interest    from    July 

1st,  1914   217  50  217  50 

Cor.  5th  Avenue  &  40th  Street, 

Brooklyn ,. 12,00000       12,00000 

41/0  %    interest    from    Octo- 
ber 1st,  1914 82  50  82  50 

Jamaica  Avenue,  east  of  Colum- 
bia Avenue,  Brooklyn 5,500  00  5,500  00 

^/2%  interest  from  Novem- 
ber 1st,  1914 17  19  17  19 

83rd    Street,    west    of    Second 

Avenue,  Brooklyn  5,000  00         5,000  00 

&/2%   interest   from   Octo- 
ber 1st,  1914 3438  3438 

83rd    Street,    west    of    Second 

Avenue,  Brooklyn  5,500  00         5,500  00 

41/2%    interest    from    Octo- 
ber, 1st,  1914 37  81  37  81 

Adelphi  Street,   south   of   De- 

Kalb  Avenue,  Brooklyn .          4,500  00         4,500  00 

41/2%    interest    from    Octo- 
ber 1st,  1914 30  94  30  94 

Three  registered  U.  S.  Govern- 
ment bonds  series  dated, 
August  1,  1898.  Int.  3%. 

Bbnd  No.  1729 1,000  00         1,000  00 

Bond  No.  1730 1,000  00         1,000  00 

Bond  No.  20846. .  500  00  500  00 


374  INHERITANCE  TAXATION 


Value  as  ap- 

Estimated  praised  in  this 

t  market  value  proceeding 

3%    interest    on    same    from 
November  1st,  1914 $5  00  $5  00 


$47,425  32     $47,425  32 


SCHEDULE  A. 
A-4. —  Corporate  Bonds  and  Stocks. 

Value  as  appraised 
Estimated  in  this 

market  value  proceedings 

Certificates  for  33  shares  Com- 
mon Stock  of  Auto  Sales 
Gum  &  Chocolate  Co.,  N.  Y. 
Corporation  capital  $6,000,- 
000  par  value  of  shares  $100 
each.  Market  quotation  No- 
vember 25th,  1914,  9  bid,  10y2 
asked $297  00  $297  00 

$3,000  par  value  of  Auto  Sales 
Gum  &  Chocolate  Co.  6% 
bonds.  Market  quotation  No- 
vember 25th,  1914  at  45....  1,350  00  1,350  00 

Certificate  for  5,000  shares  of 
Sunday  Nevada  Mining  Co. 
Stock  p.  v.  $1.00,  S.  Dakota 
Corporation,  capital  $1,500,- 
000 0  0 

Certificate  for  10  shares  of 
capital  stock  of  Gas  Engine 
&  Power  Co.  and  Charles  L. 
Seabury  &  Co.  (consoli- 
dated) p.  v.  $1.00.  Capital 
$6,000,000.  N.  Y.  Memo  at- 
tached to  said  certificate 


PART  V  —  PROCEDURE 


375 


signed  by  Chas.  Cory  &  John 
M.  Cory  stating  that  each 
owns  5  shares. 

Property  of  decedent  therein 

was  only  5  shares 

(See  letter  of  Gas  Engine 
&  Power  Co.  &  C.  L.  Sea- 
bury  &  Co.  annexed  as  to 
value. ) 

Certificate  for  1  share  pre- 
ferred capital  stock  of  Guana- 
juato Development  Com- 
pany (N.  J.).  Par  value 
$100.  Capital  $1,000,000. 
Pfd;  $3,000,000  Common 

500  shares  Capital  stock  of 
Chas.  Cory  &  Son  (N.  Y.). 
Capital  $100,000  p.  v.  $100 
each.  One  half  of  entire 
capital  stock  was  owned  by 
Chas.  Cory  and  the  other 
half  by  John  M.  Cory.  By 
agreement  between  them  it 
was  provided  that  the  survi- 
vor should  purchase  the 
stock  of  the  one  who  should 
first  die  and  pay  $30,000  for 
same.  Stock  of  deceased 
has  been  sold  by  executor 
for  that  sum  pursuant  to 
said  agreement,  a  copy  of 
which  is  hereto  annexed. .  . . 


Estimated 
market  value 


Value  as  appraised 
in  this 

proceeding 


$250  00    $250  00 


30,000  00  103,400  00 


$31,897  $105,300  00 


376 


INHERITANCE  TAXATION 


SCHEDULE  A. 

A-5. —  Interest    of    decedent    in    any    co-partnership    or 

business. 
None. 

SCHEDULE  A. 

A-6. —  Property  left  by   decedent   of  whatever   kind  or 

nature  not  included  in  the  foregoing  sub-schedules. 
None. 

SCHEDULE  B. 
B-l. —  Funeral  Expenses. 


Eev.  S.  De  Lancey  Townsend, 

Clergyman 

John  Irving,  Jr.,  Undertaker. . 
Boulevard  Floral  Co.,  Flowers. 
T.  Pitbladdo,  Monument  work. 
J.  Weir  &  Co.,  Inc.,  Gardeners. 


Claimed 


Allowed 

in  this 

proceeding 


$100  00 

703  50 

185  50 

42  45 

18  00 


$1,049  45         1,049  45 


SCHEDULE  B. 
B-2. —  Administration  expenses. 


Commissions  of  Executor  to  be 
computed. 

Counsel  fees,  including  cost  of 
advertising  for  claims,  court 
fees  and  incidental  disburse- 
ments estimated 


Claimed 


Allowed 

in  this 

proceeding 


$2,500  00       $2,500  00 


PART  V  —  PROCEDURE  377 

SCHEDULE  B. 
B-3. —  Debts  of  decedent 

Allowed 
inthw 
Claimed  proceeding 

Guaranty  Trust  Co.,  loan  on 
collateral  $600  with  interest 
from  October  14,  1914 $604  00 

Dr.  Daniel  B.  Brinsmade 116  00 

E.  Hofstaetter  &  Co 3  50 

Federal  Income  Tax  Jan.  1  to 
Nov.  25,  1914 52  63  52  63 


$776  13         $776  13 


SCHEDULE  B. 

B-4. —  Deductions  claimed  and  not  included  in  the  pre- 
ceding sub-schedules. 

Allowed 
in  this 
Claimed  proceeding 

John    M.    Cory,    brother    and 

legatee $5,000  00 

Ella  Cory,  sister  and  legatee.         5,000  00 
Mary  J.  Cory,  sister  and  legatee         5,000  00 

00 


NOTE. —  This  was  a  mistake  —  exemptions  are  not  deductions  and  should 
not  be  set  forth  in  the  inventory  as  they  are  taken  from  the  real  estate. 


SCHEDULE  C. 

Property  passing  by  decedent's  exercise  of  any  power  of 
appointment  vested  in  him  under  the  will,  deed  or  other 
instrument  of  another. 

None. 


378  INHERITANCE  TAXATION 

SCHEDULE  D. 

Beneficiaries  and  their  interests,  etc. 
John    M.    Cory,    brother    and 
legatee,    equal    one-third    of 
estate. 
Mary  J.  Cory, 

equal  one-third  of  estate. 
Ella  Cory, 
equal  one-third  of  estate. 

B.— PROCEEDINGS  BEFORE  APPRAISER. 

In  many  states  the  Surrogate,  Probate  Judge,  Tax  Com- 
mission or  Comptroller  assess  the  tax  upon  the  valuations 
of  the  inventory,  unless  there  is  some  reason  for  being 
dissatisfied,  in  which  case  supplemental  affidavits  are 
required  or  an  appraiser  is  appointed.  In  case  of  any 
controversy  an  appraiser  is  always  appointed  who  reports 
to  the  Surrogate  or  Probate  Judge  who  assesses  the  tax 
upon  his  report. 

1.  Appraisers. 

a.    APPOINTMENT  AND  REMOVAL. 

In  all  the  large  jurisdictions  permanent  appraisers  are 
appointed.  Such  an  appraiser  is  a  public  officer  with  quasi 
judicial  functions. 

Matter  of  Hull,  109  App.  Div.  248;  95  Supp.  819. 

In  New  York  the  appraisers  are  appointed  by  the  state 
comptroller  and  one  of  the  appraisers  so  appointed  must 
be  designated  by  the  Surrogate. 

Matter  of  Sondheim,  69  App.  Div.  5;  74  Supp.  510. 

An  appraiser  so  appointed  is  a  public  officer  and  not 
subject  to  the  Civil  Service  Laws. 

Weeks  v.  Kraft,  147  App.  Div.  403;  132  Supp.  228. 


PART  V  —  PROCEDURE  379 

Nor  to  the  Veteran  Acts  and  may  be  removed  without 
notice  and  a  hearing  even  though  a  veteran  or  exempt 
fireman. 

People  ex  rel.  McNeile  v.  Glynn,  128  App.  Div.  257;  112  Supp.  695. 
People  ex  rel.  McKnight  v.  Glynn,  56  Misc.  35;  106  Supp.  956. 

The  surrogate  may  designate  an  appraiser  on  his  own 
motion  or  upon  petition. 

Matter  of  O'Donohue,  44  App.  Div.  186;  59  Supp.  1087;  60  Supp. 
690. 

The  provision   requiring  county  treasurers  to  act  as 
appraisers  in  certain  counties  is  constitutional. 
Matter  of  Fuller,  62  App.  Div.  428;  71  Supp.  40. 

In  nearly  all  the  states  excepting  New  York  the 
appraiser  is  appointed  and  removed  by  the  court. 

Where  the  court  was  dissatisfied  with  the  appraisal  it 
had  power  of  its  own  motion  to  vacate  the  order  appoint- 
ing an  appraiser  and  appoint  a  new  appraiser  and  direct 
him  to  make  a  new  appraisal  on  the  ground  that  the  orig- 
inal report  was  insufficient  and  that  the  court  could  not 
determine  the  tax  therefrom. 

County  Court  v.  Watson,  51  Colo.  405 ;  118  Pac.  974. 

But  the  previously  appointed  appraiser  must  be  removed 
for  neglect  of  duty  or  other  proper  cause  before  a  new 
appraiser  can  be  appointed. 

Wingert  v.  State,  125  Md.  536,  542;  94  A.  166. 

And  in  case  of  fraud  or  error  the  court  can  always  order 
a  reappraisal  before  another  appraiser. 

State  v.  District  Court,  41  Mont.  357;  109  Pac.  438. 

The  duty  of  the  surrogate  to  appoint  an  appraiser  is 
imperative  and  he  can  be  compelled  to  act  by  mandamus. 
Kelsey  v.  Church,  112  App,  Div.  408;  98  Supp.  535. 


380 

The  surrogate  may  act  as  appraiser  under  Sec.  231  of 
the  New  York  Statute. 

Natter  of  Baker,  38  Misc.  151 ;  77  Supp.  170. 

Matter  of  Cameron,  97  App.  Div.  436;  89  Supp.  977;  aff.  181  N.  Y. 

560;  74  N.  E.  1115. 

Matter  of  Costello,  189  N.  Y.  288;  82  N.  E.  139. 
Matter  of  Whitewright,  87  Misc.  34;  151  Supp.  241. 

Where  property  of  a  decedent  is  situated  in  several 
counties,  the  appraiser  appointed  by  the  surrogate  first 
acquiring  jurisdiction  may  appraise  all. 

Matter  of  Keenan,  22  N.  Y.  St.  Hep.  79;  5  Supp.  200. 

b.     POWERS  AND  DUTIES. 

The  functions  of  an  appraiser  are  in  many  respects 
judicial  as  well  as  ministerial. 

Matter  of  Ullmann,  137  N.  Y.  403;  33  N.  E.  480. 

"  He  must  have  a  knowledge  of  trusts  and  of  wills,  and 
devises  and  bequests,  and  of  the  descent  and  distribution 
of  property  of  decedents.  He  must  be  an  expert  upon  the 
value  of  stocks  and  bonds  and  personal  property  in  gen- 
eral. He  must  be  capable  of  ascertaining  the  value  of 
real  property  and  of  conducting  examinations  and  deciding 
questions  of  fact  as  to  residence,  relationship  and  the 
like." 

Weeks  v.  Kraft,  147  App.  Div.  403;  132  Supp.  228. 

The  appraiser  has  power  to  issue  subpo3nas  and  compel 
the  attendance  of  witnesses.  His  powers  and  duties  are  of 
a  quasi-judicial  character,  and  call  for  the  exercise  of 
sound  judgment,  discretion  and  a  knowledge  of  legal 
principles.  They  partake  of  the  nature  of  the  acts  of  com- 
missioners appointed  by  the  court  in  condemnation  pro- 
ceedings and  of  referees  to  hear,  try,  and  determine  the 
issues  in  actions,  or  to  take  proof  in  actions  and  report 
the  same  to  the  court  with  their  opinion  thereon,  all  of 
which  demand  upon  the  part  of  the  incumbent  an  under- 


PABT  V  —  PBOCEDUKE  381 

standing  of  statutory  provisions,  and  ability  ta  pass  upon 
complicated  questions  of  law.  f 

People  ex  rel.  McKnight  v.  Glynn,  56  Misc.  35 ;  106'  Supp.  956. 

"  Some  of  the  functions  of  a  taxing  officer  are  minis- 
terial, but  it  is  well  established  by  authority  that  in 
determining  the  value  of  the  property  assessed,  the  extent 
of  claims  to  exemption,  etc.,  the  taxing  officer  or  board  acts 
judicially." 

Matter  of  Hull,  109  App.  Div.  248 ;  95  Supp.  819. 

"  The  function  of  an  appraiser  is  somewhat  similar  to 
that  of  a  jury  called  by  the  court  in  an  equity  case  to  aid 
its  conscience.  The  whole  matter  is  with  the  surrogate 
and  continues  with  him  until  final  determination  after 
appeal." 

Matter  of  Thompson,  57  App.  Div.  317-319;  68  Supp.  18. 

An  appraiser  must  rule  on  admission  of  testimony. 

Morgan  v.  Warner,  45  App.  Div.  424-427;  60  Supp.  963;  aff.  162 
N.  Y.  612;  57  N.  E.  1118. 

It  frequently  happens  that  an  appraiser  as  part  of  his 
necessary  duties  must  construe  a  wilL 

Matter  of  Cager,  111  N.  Y.  343,  347;  18  N.  E.  866. 
Matter  of  Ullman,  137  N.  Y.  403;  33  N.  E.  480. 
Matter  of  Kimberly,  150  N.  Y.  90 ;  44  N.  E.  945. 
Matter  of  Lynn,  34  Mise.  681;  70  Supp.  730. 
Matter  of  Peters,  69  App.  Div.  465;  74  Supp.  1028. 

A  transfer  tax  appraiser  has  jurisdiction  in  the  first 
instance  to  determine  whether  certain  corporate  stock  con- 
stitutes a  part  of  the  estate  to  be  appraised,  and  such 
determination  must  necessarily  precede  the  valuation  of 
said  stock  for  the  purposes  of  the  transfer  tax.  The  juris- 
diction of  the  appraiser  is  not,  however,  exclusive,  and  on 
appeal  from  the  order  entered  on  his  report  the  surrogate 
has  power  to  decide  every  question  that  may  be  raised  in 
a  proceeding  under  the  statute. 

Matter  of  Barnes,  83  Misc.  272;  144  Supp.  794. 


382  INHERITANCE  TAXATION 

The  court  said  in  People  ex  rel.  McKnight  v.  Glynn,  56 
Misc.  35,  106  Supp.  956 : 

11  It  is  alleged  that  the  transfer  tax  appraiser  always 
acts  as  a  representative  of  the  State  Comptroller  rather 
than  as  a  disinterested  arbiter.  This,  if  true,  is  a  violation 
of  the  obligations  of  the  appraiser  and  not  contemplated 
by  the  act.  An  appraiser  should  decide  with  entire  impar- 
tiality the  questions  arising  before  him,  whether  of  law  or 
of  fact  or  mixed  questions  of  law  and  fact. 

* '  The  State  Comptroller  is  only  one  of  the  parties  to  the 
proceeding  before  the  appraiser,  and  is  entitled  to  no  more 
consideration  that  the  representatives  of  the  estate.  An 
error  of  the  appraiser  in  this  regard  cannot  enter  into  the 
construction  of  the  statute.  The  surrogate  may  always 
correct  such  errors,  if  duly  advised. 

"  The  powers  and  duties  of  the  tax  appraisers  are  of  a 
quasi- judicial  character.  They  call  for  the  exercise  of 
sound  judgment,  discretion  and  knowledge  of  legal  prin- 
ciples. They  demand  upon  the  part  of  the  incumbent  an 
understanding  of  statutory  provisions  and  ability  to  pass 
upon  complicated  questions  of  law." 

The  tendency  has  been  more  and  more  to  emphasize  the 
judicial  functions  of  the  appraiser.  While  he  cannot  him- 
self issue  a  commission  to  take  testimony  in  a  foreign 
jurisdiction  the  surrogate  may  issue  the  commission  and 
the  testimony  may  then  be  adduced  before  the  appraiser. 
Matter  of  Wallace,  71  App.  Div.  284;  75  Supp.  838. 

The  appraiser  may  not  determine  questions  of  residence 
but  the  parties  usually  stipulate  that  he  may  take  the 
evidence  and  submit  it  for  determination  to  the  surrogate. 

Matter  of  Grant,  83  Misc.  257;  144  Supp.  567;  aff.  166  App.  Div. 
921;  151  Supp.  1119. 


PART  V  —  PROCEDUKE  383 

2.  Notice. 

a.     NOTICE  is  JURISDICTIONAL. 

A  statute  that  imposes  a  tax  and  provides  for  no  notice 
or  hearing  or  "  day  in  court  "  for  the  person  who  must 
pay  it  is  unconstitutional. 

Matter  of  Winters,  21  Misc.  552;  48  Supp.  1097. 
Matter  of  McPherson,  104  N.  Y.  306;  10  N.  E.  685. 
Ferry  v.  Campbell,  110  la.  290;  81  N.  W.  604. 
Martin  v.  Pollock,  (Ga.)  87  S.  E.  793. 
Matter  of  Haskins,  (Cal.)  149  Pac.  576. 

If  there  is  a  provision  for  appeal  and  rehearing  before 
the  court  notice  of  appraisal  is  not  necessary  to  make  the 
act  constitutional. 

Hostetter  v.  State,  26  Ohio  Cir.  Ct.  702. 

Notice  of  appraisal  and  right  of  appeal  is  sufficient 
notice  and  hearing. 

Matter  of  McPherson,  104  N.  Y.  306,  323;  10  N.  E.  685. 
Trippet  v.  State,  149  Cal.  521;  86  Pac.  1084. 

Notice  of  appraisal  must  be  given  to  all  parties  in  inter- 
est and  failure  to  do  so  will  invalidate  the  proceedings. 

Matter  of  Wolfe,  137  N.  Y.  205;  33  N.  E.  156. 

Matter  of  Backhouse,  110  App.  Div.  737;  96  Supp.  466;  aff.  185  N.  Y. 
544;  77  N.  E.  1181. 

So  where  no  proof  of  notice  to  parties  interested  was 
appended  to  report  of  appraiser  the  report  was  remitted 
with  directions  to  give  due  notice  and  hold  another 
hearing. 

Matter  of  Froment,  N.  Y.  L.  J.,  Nov.  29,  1916. 

11  It  may  be  difficult  in  a  given  case  for  the  court  to 
ascertain  the  names  and  post-office  addresses  of  all  per- 
sons interested,  but  if  the  inconvenience  and  difficulty 
encountered  in  this  regard  is  to  determine  the  power  of 
the  court  to  proceed,  then  there  would  arise  cases  in  which 


INHERITANCE  TAXATION 

the  court  would  be  at  a  loss  as  to  what  disposition  it 
should  make  of  a  distributive  share.  The  court  admitted 
the  will  to  probate.  It  may  be  presumed  that  it  has, 
knowledge  or  the  means  of  knowledge  of  all  persons  inter- 
ested in  the  property  disposed  of  by  it,  and  can  impart 
this  knowledge  to  the  appraiser  in  its  direction  to  him  as 
to  the  time  which  must  intervene  before  the  appraisement 
is  made. 

State  v.  District  Court,  41  Mont.  357,  366;  109  Pae.  438. 

And  it  must  specify  the  property  to  be  appraised  to  be 
binding. 

Matter  of  Morgan,  164  App.  Div.  854;  149  Supp.  1022;  aff.  215  N.  Y. 


mem. 


The  State  Comptroller  was  not  precluded  from  taking 
proceedings  in  1902  to  assess  the  transfer  tax  upon  an 
estate  where  the  decedent  died,  and  whose  will  was  proved 
in  1895,  and  the  counsel  for  the  estate  was  informed  by  the 
surrogate,  upon  the  basis  of  the  executor's  affidavit,  that 
the  estate  was  too  small  to  be  taxable, —  it  appearing  that 
no  decree  was  then  or  ever  entered  taxing  or  exempting 
the  estate,  and  that  consequently  no  notice  of  an  appraisal 
was  ever  given  to  the  persons  legally  entitled  thereto. 
Matter  of  Schmidt,  39  Misc.  77;  78  Supp.  879. 

Parties  upon  whom  notice  is  served  are  chargeable  with 
notice  of  all  subsequent  proceedings,  including  the 
adjournments  of  the  hearing  from  time  to  time;  and  it  is 
not  necessary  that  the  new  notice  be  served  after  adjourn- 
ment. 

Hanlerg  v.  Morgan,  263  HI.  616;  105  N.  E.  720. 

The  proofs  must  also  show  that  officers  representing 
the  people  had  due  notice. 

Matter  of  Bolton,  35  Misc.  688 ;  72  Supp.  430. 


PART  V  —  PROCEDURE  385 

But  when  the  district  attorney  appears  his  authority 
will  be  presumed. 

Hatter  of  Arnett,  49  Hun  599 ;  2  Supp.  428. 

b.     NOTICE  BY  MAIL  SUFFICIENT. 

"  The  Legislature  not  having  prescribed  the  kind  of 
notice,  it  may  be  personal  or  by  mail.  If  mailed,  and  the 
taxpayer  lives  in  a  city,  the  notice  if  possible  should  be 
directed  to  the  street  and  number  of  his  residence.  It  is 
so  provided  in  St.  1909,  c.  490,  Part  II,  §  3,  requiring  a 
collector  of  taxes,  after  receiving  a  tax  list  and  warrant, 
to  send  notice  to  each  person  who  is  assessed,  whether 
resident  or  nonresident,  of  the  amount  of  his  taxes.  The 
commissioner  not  having  complied  with  the  statute,  the 
tax  is  uncollectible  and  the  information  must  be  dismissed 
with  costs. ' ' 

Attorney-General  v.  Boche,  219  Mass.  601;  107  N.  E.  667. 

Notice  of  application  to  assess  a  transfer  tax  should  be 
given  to  a  legatee,  devisee  or  distributee  upon  whose 
interest  a  tax  may  be  assessed.  The  statute  does  not  pre- 
scribe the  manner. in  which  notice  may  be  given  on  an 
application  to  assess  a  transfer  tax,  but  where  personal 
service  is  made  either  within  or  without  the  state,  the 
requirements  of  section  2529  of  the  Code  of  Civil  Pro- 
cedure as  to  the  number  of  days  which  must  elapse  between 
the  date  of  service  and  the  return  date  governs;  in  case 
service  is  made  by  mail,  the  time  between  the  mailing  of 
the  notice  of  motion  and  the  return  day  should  be  double 
that  required  in  case  of  personal  service. 
Matter  of  Whitewright,  89  Misc.  97;  151  Supp.  241. 

When  an  affidavit  attached  to  transfer  tax  appraiser's 
report  specifically  alleges  that  notice  of  appraisal 
required  by  the  statute  was  duly  mailed  to  the  executor 
his  denial,  on  information  and  belief,  that  he  received  the 
notice,  held  insufficient. 

Matter  of  Hart,  98  Misc.  515 ;  162  Supp.  716. 

13 


386  INHERITANCE  TAXATION 

Although  this  case  \vas  reversed  by  the  Appellate  Divi- 
sion, First  Department,  July  14, 1917 ;  no  criticism  is  made 
of  the  ground  taken  by  the  surrogate.  It  appeared  how- 
ever that  the  appraiser  who  gave  the  notice  resigned  and 
that  another  appraiser  was  appointed  in  his  place  who 
proceeded  without  any  further  notice,  relying  on  that 
given  by  the  former  appraiser.  The  Appellate  Division 
held  that  this  was  not  good  service  saying: 

"  We  think  that  a  transfer  tax  appraisal  ends  with  the 
death,  resignation  or  removal  of  an  appraiser  and  that 
each  appraiser  must  proceed  de  novo.  The  transfer  tax 
could  not  be  validly  determined  without  notice  to  the 
parties  interested  and  an  opportunity  to  be  heard,  and  the 
legislature  has  so  provided.  There  is  no  statutory  pro- 
vision continuing  an  appraisal  proceeding  commenced 
before  one  appraiser  and  permitting  his  successor  to  take 
up  and  complete  his  work  and  no  decision  sustaining  the 
exercise  of  such  power  in  a  similar  case  is  cited  or  has 
been  found.  It  follows,  therefore,  that  the  order  should 
be  reversed." 

c.     WHERE  NOTICE  is  IMPOSSIBLE. 

As  soon  as  it  appears  that  the  interest  of  remainder- 
men in  an  estate  is  contingent,  there  remains  no  question 
between  them  and  the  state  to  which  the  then  existing 
value  of  the  residuary  estate  is  essential ;  and  a  finding  as 
to  said  value  in  the  original  transfer  tax  proceeding  is  not 
conclusive  upon  the  remaindermen. 

Matter  of  CJiappell,  83  Misc.  673;  146  Supp.  798. 

So  where  there  is  a  bequest  to  a  charitable  corporation 
yet  to  be  formed  no  service  of  process  or  notice  of  the 
appraisement  proceedings  could  or  would  be  binding  upon 
it. 

People  v.  Kellogg,  268  HI.  489,  497;  109  N.  E.  304. 


PART  V  —  PROCEDURE  387 

d.     PRESUMPTION  OF  NOTICE. 

In  the  absence  of  proof  to  the  contrary  it  will  be  pre- 
sumed that  the  Surrogate  has  given  the  required  notice 
to  all  persons  interested  in  the  estate;  but  this  presump- 
tion does  not  extend  to  appraisers. 

Matter  of  Miller,  110  N.  Y.  216;  18  N.  E.  139. 

And  if  the  surrogate  in  fact  failed  to  give  notice  the 
decree  will  be  vacated. 

Matter  of  Daly,  34  Misc.  148 ;  69  Supp.  494. 

3.  Hearings. 

a.     INFORMAL  UPON  AFFIDAVITS. 

If  the  comptroller's  representative  is  satisfied  with  the 
valuations  of  the  inventory  he  may  accept  them  and  the 
appraiser  will  then  proceed  upon  the  executor's  affidavit. 

Where  the  state  comptroller  is  dissatisfied  with  the 
value  of  an  estate  as  given  in  affidavits  submitted  to  a 
transfer  tax  appraiser  on  behalf  of  the  estate,  he  should 
either  examine  the  affiant  as  to  the  basis  of  his  valuation 
or  submit  an  appraisal  by  some  one  possessing  the  neces- 
sary qualifications  therefor. 

Matter  of  Gale,  83  Misc.  686;  145  Supp.  301. 

If  the  inventory  does  not  contain  all  the  information 
desired  it  may  be  supplied  by  the  executor,  upon  request, 
in  the  form  of  supporting  or  supplementary  affidavits  of 
appraisers  of  jewelry,  real  estate,  and  the  like.  Where 
the  estate  is  of  any  size,  however,  oral  testimony  is  almost 
always  adduced. 

"  Inventories  of  estates  of  decedents  made  in  pursuance 
of  an  order  of  the  probate  court  issued  under  authority 
of  a  statute  are  admissible  for  many  purposes  against 
every  person  since  they  are  made  by  those  acting  under 
authority  of  the  law.  An  inventory  or  appraisal  has, 
however,  been  rejected  when  offered  against  the  admin- 


388  INHERITANCE  TAXATION 

istrator  who  was  in  no  way  connected  with  it  and  it  was 
simply  a  sworn  ex  parte  statement  of  third  persons,  though 
it  has  been  held  prima  facie  evidence  against  him  of  the 
value  of  the  assets  in  the  absence  of  other  proof  of  value. ' ' 

Chamberlayne  on  Evidence,  §  3440. 

The  estimate  of  an  appraiser  appointed  by  one  of  the 
parties  has  no  conclusive  effect  on  the  rights  of  the  other 
except  where  the  latter  has  co-operated  in  the  appoint- 
ment. 

Chamberlayne  on  Evidence,  §  2109. 

The  affidavits  must  show  facts,  not  conclusions  to  have 
any  probative  force  or  support  the  findings  of  the 
appraiser. 

Matter  of  G.  C.  Stone,  N.  Y.  L.  J.,  Feb.  18,  1911. 

b.    BURDEN  OF  PROOF. 

In  the  first  instance  the  burden  of  proof  rests  upon  the 
comptroller  to  show  that  assets  are  a  part  of  the  estate. 
Matter  of  Enston,  113  N.  Y.  174;  21  N.  E.  87. 

But  a  prima  facie  case  is  always  sufficient. 
Matter  of  Lane,  39  Misc.  522;  80  Supp.  381. 

Circumstantial  evidence  may  sustain  it  and  overcome 
the  direct  assertion  of  an  interested  party. 
Matter  of  Palmer,  117  App.  Div.  360 ;  102  Supp.  236. 

But  mere  suspicion  that  executor  concealed  assets  is  not 
enough. 

Matter  of  Peck,  149  App.  Div.  912;  133  Supp.  1136. 

"Any  apparent  attempt,  however,  upon  the  part  of  the 
executors  to  evade  the  payment  of  a  just  tax,  however 
reprehensible  it  may  be,  does  not  authorize  either  the 
appraiser  or  surrogate  to  make  an  assessment  upon 
suspicion  or  otherwise  than  upon  convincing  evidence  of 


PART  V  -  -  PROCEDURE  389 

the  transfer  of  property  for  which  the  tax  is  imposed  by 
the  statute." 

Matter  of  Kennedy,  113  App.  Div.  4-8;  99  Supp.  72. 

The  burden  rests  on  beneficiary  when  claiming  exemp- 
tion: 

(1)  As  an  adopted  child: 

Matter  of  Davis,  98  App.  Div.  546;  90  Supp.  244. 
Matter  of  Birdsall,  22  Misc.  180;  49  Supp.  450. 
Matter  of  Fisch,  34  Mise.  146 ;  69  Supp.  493. 

(2)  Under  a  gift  inter  vivos: 

Tompkins  v.  Leary,  134  App.  Div.  14. 
Devlin  v.  Greenwich  Bank,  125  N.  Y.  756 ;  26  N.  E.  744, 
Matter  of  Lawrence,  N.  Y.  L.  J.,  Feb.  15,  1915. 
Matter  of  Loewi,  75  Misc.  57;  134  Supp.  679. 

(3)  As  a  charitable  corporation: 
Matter  of  Townseud,  215  N.  Y.  442. 

The  burden  is  on  the  comptroller  to  show  that  a  gift  was 
made  in  contemplation  of  death. 

Matter  of  Ahrena,  K  Y.  L.  J.,  May  10,  1913, 

Matter  of  Palmer,  117  App.  Div.  360 ;  102  Supp.  326. 

Where  property  is  shown  to  have  belonged  to  the 
deceased,  the  burden  is  on  executors  to  show  that  it  never 
came  into  their  hands. 

Matter  of  Kennedy,  113  App.  Div.  4;  99  Supp.  72. 

c.    WITNESSES. 

The  witness  must  answer  the  question  before  the 
appraiser  even  though  objected  to.  The  materiality  is  for 
the  surrogate  to  determine. 

Matter  of  Bell,  94  Misc.  552;  158  Supp.  142. 

Opinion  evidence  by  a  witness  duly  qualified  is  com- 
petent as  to  value. 

Matter  of  Proctor,  41  Misc.  79;  83  Supp.  643. 


390  INHERITANCE  TAXATION 

A  party  calling  a  witness  to  give  his  opinion  on  value 
may  qualify  him  by  showing  his  familiarity  with  the  prop- 
erty and  with  other  property  in  the  neighborhood,  his 
experience  in  the  business,  his  familiarity  with  the  state 
of  the  market  and  with  sales  of  similar  property  in  the 
vicinity,  and  any  other  facts  tending  to  show  his  knowledge 
of  the  subject  and  capacity  to  give  an  opinion  thereon. 
But  while  the  fact  that  he  knows  of  sales  made  and  of  the 
prices  obtained  may  be  elicited,  the  prices  given  in  any 
particular  instance  are  not  admissible,  except  as  stated, 
on  the  cross-examination  of  the  opposing  party,  if  he  sees 
fit  to  make  the  inquiry. 

Hancock  v.  Ross,  50  Cal.  Dec.  15. 

' '  The  affidavit  submitted  to  the  appraiser  was  evidently 
prepared  by  the  attorney  for  the  executrix,  and  therefore 
the  allegations  therein  contained  are  not  entitled  to  the 
same  probative  force  as  the  direct  testimony  of  the 
deponent.  When  she  testified  before  the  appraiser  her 
answers  to  the  questions  propounded  to  her  were  in  her 
own  words,  the  language  was  her  own,  and  she  evidently 
testified  to  the  facts  from  her  own  knowledge  and  without 
the  adventitious  aid  of  counsel.  As  she  was  an  interested 
witness  the  court  will  assume  .the  correctness  of  the 
evidence  that  is  least  advantageous  to  her." 

Matter  of  Thompson,  85  Misc.  291;  147  Supp.  157;  mod.  167  App. 
Div.  356;  153  Supp.  164;  aff.  217  N.  Y.  609. 

In  inheritance  tax  proceedings  the  testimony  of  a  wit- 
ness as  to  personal  transactions  with  the  deceased  is  not 
barred  by  Sec.  829  of  the  code. 

Matter  of  Gould,  19  App.  Div.  352;  46  Supp.  506;  aff.  as  to  this 
point,  156  N.  Y.  423. 

But  when  this  is  the  only  testimon}r  it  should  be 
received  with  caution. 

Matter  of  Thompson,  81  Misc.  86. 

Matter  of  Sharer,  36  Misc.  502;  73  Supp.  1057. 


PART  V  —  PROCEDURE  391 

A  residuary  legatee,  son  of  decedent,  may  testify  to 
interviews  had  by  him  with  the  decedent  tending  to  show 
that  a  particular  legacy  was  given  to  him  by  the  will  in 
payment  of  a  debt  for  services  rendered  by  him  to 
decedent. 

Matter  of  Gould,  19  App.  Div.  352;  46  Supp.  506;  mod.  156  N.  Y. 
423. 

A  legatee  is  not  prohibited  from  testifying  before  an 
appraiser  as  to  interviews  had  by  him  with  the  decedent, 
and  which  tend  to  show  why,  or  for  what  purpose  a  par- 
ticular legacy  was  given  to  him  by  the  decedent. 

Matter  of  White,  116  App.  Div.  183. 

Matter  of  Brundage,  31  App.  Div.  348-353 ;  52  Supp.  362. 

"  Upon  the  hearing  before  the  appraiser  real  estate 
experts  were  examined  on  behalf  of  the  estate  in  order  to 
show  the  value  of  decedent's  real  property  in  this  county. 
A  real  estate  expert  was  also  examined  on  behalf  of  the 
state  comptroller.  There  was  a  material  difference 
between  their  estimates  of  the  value  of  decedent's  real 
property.  The  appraiser  adopted  the  valuation  of  the 
state  comptroller's  expert.  An  examination  of  the  testi- 
mony shows  that  this  valuation  was  not  unreasonable  or 
unwarranted,  and  the  surrogate  therefore  will  not  inter- 
fere with  the  finding  of  the  appraiser." 

Matter  of  Turner,  82  Misc.  25 ;  143  Supp.  692. 

The  report  of  a  financial  expert  on  the  valuation  of  the 
assets  of  a  partnership  or  corporation  must  be  under  oath. 

Matter  of  Newman,  91  Misc.  200,  154  Supp.  1107. 
Matter  of  Chambers,  N.  Y.  L.  J.,  Jan.  21,  1912. 

The  affidavit  of  an  executor  as  to  the  value  of  the  real 
estate  is  competent  before  the  appraiser  as  an  admission 
against  interest. 

Simon  v.  Etgen,  213  N.  Y.  589. 


392  INHERITANCE  TAXATION 

The  executor  of  a  non-resident  decedent  is  not  obliged 
to  testify  before  the  appraiser  in  reference  to  the  dece- 
dent's  property  without   this   State,   or   as  to   stock   of 
foreign  corporations  owned  by  the  non-resident  decedent. 
Matter  of  Bishop,  82  App.  Div.  112;  81  Supp.  474. 

But  if  he  so  refuses  the  debts  in  a  foreign  jurisdiction 
cannot  and  therefore  will  not  be  prorated. 

Matter  of  WUting,  69  Misc.  526;  127  Supp.  960;  aff.  200  N.  T.  520. 

Where  a  witness  refuses  to  answer  a  material  question 
in  reference  to  a  gift  to  himself  by  the  testator,  he  can  be 
punished  for  contempt  by  the  surrogate. 

Matter  of  Kennedy,  113  App.  Div.  4-8;  99  Supp.  72. 

The  appraisal  of  the  same  real  estate  in  another  pro- 
ceeding is  not  competent  evidence  of  value. 

Matter  of  Mitchell,  N.  Y.  L.  J.,  March  9,  1912. 

d.     CORPORATE  BOOKS. 

The  appraiser  may  subpoena  the  production  of  cor- 
porate books  as  this  is  often  the  only  way  in  which  the 
value  of  the  stock  can  be  established  where  there  were  no 
sales  in  the  open  market. 

Matter  of  Crawford,  85  Misc.  283;  147  Supp.  234. 
Matter  of  Bach,  147  Supp.  229. 

The  Wisconsin  statute  did  not  specifically  give  this 
power  and  a  writ  of  prohibition  was  granted,  the  court 
reasoning  that  a  third  party  should  not  be  compelled  to 
produce  private  books  and  papers. 

State  v.  Carpenter,  129  Wis.  180 ;  108  N.  W.  641. 

Books  of  account  are  competent  to  prove  a  claim  against 
an  estate  in  an  inheritance  tax  case  where  the  entries 
were  made  under  the  direction  of  the  deceased. 
People  v.  Lefens,  269  HI.  472;  109  N.  E.  965. 


PART  V  —  PROCEDURE  393 

e.     OBJECTIONS. 

Where  no  witnesses  are  examined  and  the  appraisal  is 
made  upon  the  affidavits  furnished  by  the  estate  the  whole 
proceeding  is  informal  and  the  ordinary  rules  of  evidence 
do  not  apply.  On  the  other  hand  where  there  is  a  con- 
troversy and  testimony  is  adduced  the  proceeding  assumes 
the  form  of  a  trial,  with  issues  joined  and  facts  to  be 
determined.  Even  under  these  circumstances  the  hearing 
is  still  of  an  informal  character. 

"  Evidence  given  before  the  appraiser  on  appraisals  for 
tax  purposes  is  generally  informal  in  character  and  the 
Common  Law  rules  of  evidence  appropriate  on  trials  by 
jury  are  not  strictly  applied  and,  indeed,  in  legal  theory, 
have  but  little  application  to  such  proceedings  or  inquisi- 
tions conducted  by  appraisers." 

Matter  of  Hettie  R.  Green,  99  Misc.  582;  aff.  App.  Div.,  June  30, 
1917. 

"  We  think  the  error  of  the  appraiser  in  rejecting  the 
evidence  ought  not  to  be  disregarded,  although  there  was 
no  formal  exception  taken  to  the  exclusion  of  the  evidence. 
This  record  comes  to  us  on  an  appeal  from  all  the  pro- 
ceedings, and  not  upon  formal  case  and  exceptions.  It 
is  a  case  where  the  court  can  see  that  the  ruling  may  have 
been  very  prejudicial  to  the  appellant,  and  we  ought  not, 
therefore,  to  say  that  an  exception  is  indispensable  to  a 
review  of  the  errors  committed  during  the  hearing  before 
the  appraiser." 

Matter  of  Brundage,  31  App.  Div.  348 ;  52  Supp.  362. 

But  it  is  not  safe  for  the  practitioner  to  rely  upon  the 
leniency  of  the  court  and  omit  the  ordinary  precautions 
in  taking  objections  and  exceptions.  The  rules  are  being 
applied  more  and  more  strictly  and  particularly  against 
the  taxing  power.  It  will  be  observed  that  in  the  cases 
cited  the  strict  rules  of  evidence  were  modified  in  favor 


394  INHERITANCE  TAXATION 

of  the  estate.  This  may  be  entirely  proper;  but  the  attor- 
neys for  the  tax  collector  can  look  for  no  such  assistance. 
For  example:  Where  the  donor  of  stock  has  failed  to 
affix  stock  transfer  stamps  at  the  time  of  the  delivery  of 
the  gift  no  evidence  of  it  can  be  received  by  the  appraiser 
pursuant  to  Sec.  278  of  the  N.  Y.  Tax  Law. 

Matter  of  Church,  176  App.  Div.  910. 

Matter  of  Ball,  161  App.  Div.  79 ;  146  Supp.  499. 

But  if  the  evidence  of  the  gift  has  been  received  by  the 
appraiser  without  objection  it  is  too  late  to  move  to  strike 
it  out  on  this  ground  when  the  matter  comes  before  the 
surrogate  on  appeal  from  the  taxing  order. 

Matter  of  Mills,  172  App.  Div.  530;  158  Supp.  1100;  aff.  219  N.  Y. 

100. 
Matter  of  Cleveland,  171  App.  Div.  908 ;  155  Supp.  1098. 

11  No  evidence  of  a  gift  or  sale  of  stock,  where  the 
delivery  of  the  certificate  was  made  without  the  affixing 
of  the  required  stamps  at  the  time  of  the  delivery,  can  be 
received.  This  results  in  making  proof  of  such  a  sale  or 
gift  impossible,  whenever  the  defense  that  no  stamp  was 
affixed  at  the  time  of  delivery  of  the  certificate  of  stock 
is  properly  pleaded." 

Matter  of  Raleigh,  75  Misc.  55. 

Bean  v.  Flint,  138  App.  Div.  846;  aff.  204  N.  Y.  153;  97  N.  E.  490. 

Mutual  Life  Insurance  Co.  v.  Nicholas,  144  N.  Y.  95. 

Sheridan  v.  Tucker,  145  N.  Y.  145. 

The  duty  to  affix  the  stamps  is  on  the  donor  and  the 
failure  does  not  affect  the  validity  of  the  gift;  it  merely 
bars  the  proof  of  it  before  the  appraiser.  So  on  appeal 
from  an  order  allowing  discontinuance  the  court  said: 

"  Had  the  duty  to  affix  a  transfer  stamp  to  her  father's 
declarations  of  trust  been  on  the  infant  plaintiff,  more 
weight  could  be  given  to  defendant's  argument  that, 
despite  her  motion  to  discontinue,  her  suit  should  go  on. 
But  a  gift  of  securities  by  a  father  to  a  child  non  sui  juris 


PART  V  —  PROCEDURE  395 

imposed  on  her  no  such  duty.  This  was  not  only  from 
her  incapacity,  but  because  the  duty  was  laid  on  the  per- 
son making  the  sale,  transfer,  or  agreement  (Tax  Law, 
§  272),  who  was  the  father  and  plaintiff's  natural  guardian. 
Should  such  a  trust  fail  in  equity  because  of  the  father's 
omission  to  stamp  the  papers  he  had  made?  The  state 
law  declares  a  rule  excluding  the  receipt  in  evidence  of 
such  unstamped  transfer,  but  does  not  annul  it. 

"  Strong  grounds  must  be  shown  to  move  the  judicial 
discretion  to  force  an  infant  to  carry  on  a  litigation  which 
is  clearly  against  her  interests  to  continue." 

Ambrosius  v.  Ambrosius,  167  App.  Div.  244;  152  Supp~562. 

f.     PROOF  OF  FOREIGN  LAW. 

In  all  matters  pertaining  to  non-resident  estates  foreign 
laws  and  decisions  must  be  proved  before  the  appraiser 
like  any  other  fact.  In  the  absence  of  such  proof  it  may 
be  presumed  that  the  law  of  the  foreign  state  is  the  same 
as  that  of  the  state  where  the  proceeding  is  held. 

Matter  of  Kennedy,  20  Misc.  531;  46  Supp.  906. 

First  National  Bank  v.  Broadway  National  Bank,  156  N.  Y.  459;  51 

N.  E.  398. 
Electro  Tint,  Etc.,  Co.  v.  American  Handkerchief  Co.,  130  App.  Div. 

564;  115  Supp.  34. 

4.  Report. 

a.    WHAT  IT  SHOULD  CONTAIN. 

The  Appraiser's  report  should  have  annexed  thereto  all 
the  testimony  and  affidavits  upon  which  it  is  based,  a 
schedule  of  all  the  personal  property  and  the  value  of 
each  item  and  another  list  showing  the  real  estate  with  a 
brief  description  and  the  value  thereof,  less  any  mortgage 
incumbrances  or  other  liens  thereon,  the  amount  of  debts 
and  testamentary  expenses  paid  and  the  estimated  com- 
missions and  additional  expenses  to  be  incurred  in  the 
settlement  of  the  estate,  the  names  and  relationship  of  all 


INHERITANCE  TAXATION 


legatees  and  distributees  and  the  interest  transferred  to 
each  respectively. 

11  Corporations  claiming  exemption  shonld  produce 
before  the  appraiser  proofs  Avhieh  clearly  entitle  them 
thereto;  a  copy  of  the  decedent's  will  should  be  attached 
to  the  report  and  a  summary  statement,  showing  the  aggre- 
gate net  amount  transferred,  and  the  particular  share 
thereof  passing  to  each  person  or  corporation.  The  date 
of  decedent's  death  and  the  names  and  addresses  of  the 
executors  or  administrators  should  be  given. 

"  Where  the  mutually  acknowledged  relationship  of 
parent  and  child  is  claimed  to  have  existed  between  the 
decedent  and  a  legatee,  proof  of  such  relationship  should 
be  produced  by  the  executor  or  legatee  by  the  affidavit  or 
testimony  of  at  least  two  disinterested  persons  who  have 
lived  in  the  neighborhood  of  the  decedent  and  can  testify 
as  to  such  relationship,  from  personal  conversation  with 
the  decedent  and  observations  made  during  the  period 
which  would  show  that  such  relationship  commenced  at  or 
before  the  child's  fifteenth  birthday  and  was  continuous 
for  at  least  ten  years  thereafter,  and,  since  June  1,  1905, 
that  the  parents  of  such  legatee  were  dead  at  the  time  the 
relationship  commenced,  except  in  the  case  of  a  step- 
child. 

"  If  the  value  of  any  assets  or  part  of  the  decedent's 
estate  cannot  be  presently  determined,  or  where  the 
appraiser  is  in  doubt  as  to  the  immediate  taxability  of  any 
interest  transferred  by  the  decedent's  will,  the  circum- 
stances in  connection  therewith  should  be  fully  set  forth 
in  the  report  of  the  appraiser. 

"  The  value  of  every  future  or  limited  estate,  income, 
interest,  annuity,  or  remainder,  as  determined  by  the 
superintendent  of  insurance,  should  be  attached  to  each 
copy  of  the  appraisers '  report  before  such  report  is  filed. ' ' 

McElroy  on  "  The  Transfer  Tax  Law,"  p.  403. 


PABT  V  —  PROCEDURE  397 

b.  WHAT  IT  MUST  SHOW. 

"  That  which  is  to  be  reported  by  the  appraiser  is  the 
value  of  the  interest  passing  to  the  beneficiaries  with- 
out any  deduction  for  any  purpose,  or  under  any  testa- 
mentary direction." 

Matter  of  Swift,  137  N.  Y.  77-87;  32  N.  E.  1096. 

The  report  should  be  made  clearly  to  express  that  it 
embraces  all  of  the  property  which  may  be  taxed  at  the 
date  of  the  death  of  decedent 

Matter  of  Earle,  74  App.  Div.  458 ;  77  Supp.  503. 

It  must  show  the  ground  of  all  findings. 

Matter  of  Bolton,  35  Misc.  688;  72  Supp.  430. 

And  include  all  property  as  to  which  the  appraiser  is 
in  doubt  whether  it  is  taxable. 

Matter  of  Hendricks,  3  Supp.  281;  18  N.  Y.  St.  Rep.  989. 

It  is  insufficient  if  it  shows  that  appraiser  has  appraised 
"All  the  property  of  the  deceased  made  known  to  him  by 
the  executor."  Upon  second  proceedings  it  should  clearly 
appear  in  the  report  that  all  of  the  property  remaining 
of  the  estate  is  embraced  within  the  proceedings. 
Matter  of  Earle,  74  App.  Div.  458 ;  77  Supp.  503. 

c.  WHEEE  TAXATION  is  SUSPENDED. 

Where  claims  are  uncertain  or  doubtful  the  right  to  tax 
should  be  reserved  in  the  report. 

Matter  of  Morgan,  36  Misc.  753 ;  74  Supp.  478. 

Matter  of  Rice,  56  App.  Div.  253;  61  Supp.  911;  68  Supp.  1147. 

Matter  of  Dimon,  82  App.  Div.  107 ;  81  Supp.  428. 

Matter  of  Westurn,  152  N.  Y.  93;  46  N.  E.  315. 

If  taxation  is  not  suspended  and  the  report  purports  to 
show  that  certain  legacies  are  the  only  ones  taxable  and 


398  INHERITANCE  TAXATION 

it  is  confirmed  by  the  surrogate  the  executor  is  protected 
from  claim  for  taxes  upon  other  legacies  not  included  in 
the  assessment. 

Matter  of  Wolfe,  137  N.  Y.  205;  33  N.  E.  156. 

Where  an  appraiser  files  a  report  by  which  he  finds  that 
the  value  of  the  interests  of  life  beneficiaries  could  not 
then  be  ascertained  and  that  the  remaindermen  were 
indefinite  and  uncertain  and  that  for  these  reasons  the 
tax  could  not  then  be  determined,  and  such  report  is  con- 
firmed by  an  order  from  which  no  appeal  is  taken,  such 
order  is  binding  upon  the  comptroller  and  the  executor 
as  long  as  the  estate  remains  in  the  condition  in  which  it 
was  at  the  time  the  order  was  made. 

Matter  of  Lawrence,  96  App.  Div.  29;  88  Supp.  1028. 

But  where  the  value  of  the  remainder  interest  was  not 
ascertainable  and  the  appraiser  made  no  mention  of  it  in 
his  report,  held  not  an  adjudication  that  it  was  not  taxable 
when  its  value  was  subsequently  ascertained. 
Matter  of  Ely,  157  App.  Div.  658;  142  Supp.  714. 

On  the  other  hand  it  has  been  held  that  where  the 
taxation  of  the  remainder  was  not  suspended  and  it  could 
have  been  presently  valued  the  decree  was  final  in  the 
absence  of  appeal  and  no  tax  could  subsequently  be  col- 
lected. 

Matter  of  Morss,  85  Misc.  676 ;  149  Supp.  41. 
Matter  of  Crerar,  86  App.  Div.  479 ;  67  Supp.  975. 

d.     FORMS  OF  REPORT. 

Following  is  an  example  of  an  appraiser's  report  in  a 
recent  case  in  New  York  City  and  county: 


PART  V  -  -  PROCEDURE  399 

SURROGATES'  COURT, 

COUNTY  OF  NEW  YORK. 


In  the  Matter 

of 

The  Appraisal,  under  the  Transfer  Tax 
Law,  of  the  Estate  of  MARY  HORLER, 
Deceased. 


To  the  Surrogates'  Court  of  the  County  of  New  York: 

I,  John  J.  Lyons,  Transfer  Tax  Appraiser,  having  been 
designated  by  Hon.  John  P.  Cohalan,  one  of  the  Surro- 
gates of  the  County  of  New  York,  by  an  order  duly  made 
and  entered  on  the  28th  day  of  October,  1915,  certified 
copy  of  which  order  is  hereto  annexed,  together  with  a 
copy  of  the  petition  upon  which  same  was  granted,  to  ap- 
praise the  estate  of  the  above-named  decedent,  pursuant 
to  the  provisions  of  the  Law  relating  to  taxable  transfers 
of  property,  and  having  given  notice  by  mail  of  the  time 
and  place  at  which  I  would  appraise  said  property  to  all 
the  persons  entitled  thereto  as  provided  in  Section  230  of 
the  General  Tax  Law  as  appears  by  copy  of  such  notice 
and  affidavit  of  mailing  thereof  hereunto  annexed,  and 
having  held  such  appraisal  on  the  13th  day  of  December, 
1915,  at  the  office  of  the  Transfer  Tax  Appraisers  in  and  for 
the  County  of  New  York,  Room  3100,  Woolworth  Building, 
233  Broadway,  Borough  of  Manhattan,  City  of  New  York, 
and  having  heard  the  allegations  and  proofs  of  the  parties 
then  and  there  appearing  before  me  and  offering  the  same, 
and  having  given  due  consideration  to  the  affidavits  and 
other  papers  submitted  herein,  and  having  made  due  and 
careful  inquiry  into  all  the  matters  and  things  brought 
before  me  in  this  proceeding,  do  now  make  and  file  the 
following  report. 


400  INHERITANCE  TAXATION 

FIRST. —  I  report  that  the  decedent  herein  died  a  resi- 
dent of  the  State  of  New  York  on  the  24th  day  of  July, 
1915,  leaving  a  Last  Will  and  Testament,  copy  of  which  is 
hereunto  annexed,  which  was  duly  admitted  to  Probate  in 
this  Court  on  the  8th  day  of  October,  1915,  and  that  there- 
after on  the  9th  day  of  October,  1915,  Letters  Testa- 
mentary upon  the  estate  of  the  said  decedent,  were  duly 
issued  by  this  Court  to  James  Horler,  17  West  10th  Street, 
New  York  City,  as  executor. 

SECOND. —  I  further  report  that  the  following  appear- 
ances were  noted  by  me  at  the  appraisal  herein:  Hon. 
Lafayette  B.  Gleason,  attorney  for  the  State  Comptroller. 
McEeynolds  &  Hunter,  Esqrs.,  attorneys  for  Executor,  80 
Maiden  Lane,  New  York  City,  N.  Y. 

THIRD. —  I  further  report  that  I  found  the  property  left 
by  the  decedent  herein  or  in  which  said  decedent  had  any 
beneficial  interest  to  consist  of  the  items  set  forth  in 
Schedule  A  of  the  affidavit  for  appraisal  of  James  Horler 
hereunto  annexed,  and  that  the  fair  market  value  of  each 
and  every  of  the  said  items  at  the  date  of  the  decedent's 
death  is  the  amount  set  down  by  me  opposite  such  item 
in  the  column  designated  '  *  Value  as  appraised  in  this 
proceeding  "  in  said  Schedule  A. 

FOURTH. —  I  further  report  that  the  sums  properly  to 
be  allowed  as  deductions  herein  for  funeral  expenses, 
expenses  of  administration,  debts  of  decedent,  and  so 
forth,  are  the  amounts  set  down  by  me  after  the  several 
items  claimed  in  the  column  designated  "Allowed  in  this 
Proceeding"  in  Schedule  B  of  said  petition. 

FIFTH. —  I  further  report  that  I  find  the  state  and  con- 
dition of  the  estate  of  said  decedent  at  its  fair  market 
value  as  of  the  date  of  decedent's  death,  the  24th  day  of 
July,  1915,  and  as  appraised  by  me  in  this  proceeding  to 
be  as  shown  in  the  following  summary: 


PART  V  —  PBOCEDURE  401 

Eeal  property  in  Schedule  Al $3,250  00 

Personal  property  in  Schedule  A2 6,016  00 

Personal  property  in  Schedule  A3 28,449  63 

Personal  property  in  Schedule  A4 0 

Personal  property  in  Schedule  A5 0 

Personal  property  in  Schedule  A6 0 

Additional  assets  referred  to  in  Paragraph  3 

of  this  report  0 


Total  Assets    $37,715  63 

(Exclusive  of  property  passing  under  a  Power  of  Appoint- 
ment). 

Subject  to  deductions  as  follows: 

Funeral  expenses,  Bl $400 

Administration   expenses,       B2 100 

Debts,  B3 0 

Other  deductions,  B4 0 

Commissions 0 

Total  Deductions  $500  00 

Leaving  a  net  estate  of  which  decedent  died 

possessed,  of 37,215  63 

To  which  is  to  be  added  the  value  of  the  prop- 
erty passing  by  virtue  of  the  exercise  of  a 
power  of  appointment  vested  in  said  dece- 
dent, and  set  forth  in  Schedule  C  and 
therein  appraised  by  me  at  the  values  writ- 
ten in  after  each  item  respectively  in  the 
column  designated  "  Value  as  appraised  in 
this  proceeding, ' '  to  wit : 0 


Making   the    total    of   all   property   passing 

upon  the  death  of  decedent,  of $37,215  63 

SIXTH. —  I  further  report  all  the  beneficiaries  entitled  at 

the  time  of  decedent's  death  to  an  interest  in  this  estate 


402  INHERITANCE  TAXATION 

pursuant  to  the  provisions  of  law,  and  of  the  said  dece- 
dent's Last  Will  and  Testament,  the  relationship  of  such 
persons  to  decedent,  the  amount  of  the  share  or  interest 
of  each,  and  whether  such  share  or  interest  is  taxable  in 
this  proceeding,  to  be  as  hereinafter  set  forth,  all  of  said 
beneficiaries  being  of  full  age  and  sound  mind  except  as 
otherwise  designated. 

Amount  Amount 

Beneficiaries:  of  Interest  of  Interest 

Exempt  Taxable 

Elizabeth  Bogert,  daughter  — 
Jewelry,  $325 

Legacy,  5,000 


$5,325         $5,000  $325 

James  Horler,  husband  — 
1/2  interest  in  realty  3,250 

Residence  28,965.63 


$32,215.63   $5,000       $27,215.63 
Respectfully  submitted, 

JOHN  J.  LYONS, 

Appraiser. 

Dated  at  New  York  City,  N.  Y.,  May  22,  1916. 

To  illustrate  a  more  complicated  case.  In  the  Matter  of 
Hernandez,  172  App.  Div.  467;  159  Supp.  59;  aff.  219  N.  Y. 
24,  it  was  held  that  the  decedent  was  a  resident  of  Cuba  at 
the  time  of  his  death,  leaving  a  gross  personal  estate  in 
New  York  of  $560,765.93  and  the  rest  of  his  property  in 
Cuba.  It  was  also  held  that  his  widow,  under  the  laws  of 
Cuba,  where  they  were  married,  was  entitled  to  one-half 
of  the  "  gananciales  "  or  joint  gains  of  the  marriage. 
The  value  of  the  estate  in  New  York  was  .33165  of  the 
total  estate.  The  total  debts  and  funeral  expenses 
amounted  to  $253,254.77. 


PART  V  —  PROCEDURE  403 

The  supplemental  appraiser's  report  pro-rated  the 
debts  and  ascertained  and  deducted  the  ' '  gananciales  " 
as  follows: 

Gross  estate  in  New  York $560,765.93 

Less  : 

Debts $164,898.61 

Funeral  expenses 4,070.03 

Administration  expenses 50,089.59 

Commissions 34,196.54 


$253,254.77 
Pro-rated  at  .33165  to  83,991.94 


Net  estate  in  New  York $476,773.99 

According  to  the  decision  of  the  Surrogate 
that  the  widow  of  decedent  is  entitled  in  her 
own  right  to  one-half  the  estate  of  decedent 
over  and  above  the  amount  possessed  by  him  at 
the  time  of  his  marriage,  by  virtue  of  the  laws 
of  the  Kingdom  of  Spain  existing  and  opera- 
tive in  Cuba  at  the  time  of  the  marriage  of 
this  decedent,  said  interest  being  known  as  the 
"  gananciales  "  or  joint  gains,  I  find  that  there 
should  be  deducted  from  decedent's  taxable 
estate  a  proportionate  sum  to  allow  for  the 
effect  of  such  right  on  the  New  York  estate, 
and  as  I  find  said  '  *  gananciales  "  to  be  equal  to 
.48095  of  decedent's  entire  estate  including 
realty  and  wheresoever  situate,  I  hereby  allow 
said  proportion  of  the  New  York  estate  as  a 
proper  deduction  in  the  sum  of  229,304.45 


The  net  taxable  estate  situate  within  the  State 

of  New  York  being  the  sum  of $247,469.5-1- 

The  rest  of  the  report  followed  the  form  given  in  the 
first  illustration. 


404  INHERITANCE  TAXATION 

C.— PROCEEDINGS  ON  APPEAL. 

1.  Jurisdiction  of  Probate  Court, 
a.     EFFECT  OF  PROBATE  DECREE. 

The  statutes  of  all  the  states  found  the  jurisdiction 
as  to  the  tax  proceeding  upon  the  jurisdiction  to  grant 
letters.  But  where  another  surrogate  has  already 
assumed  jurisdiction  of  a  tax  proceeding  a  surrogate  of 
another  county  is  without  jurisdiction,  even  though  he 
has  granted  letters. 

Matter  of  Drake,  94  Misc.  70;  157  Supp.  270. 

A  decree  granting  letters  of  administration  or  admit- 
ting a  will  to  probate  is  not  conclusive  as  to  the  juris- 
dictional fact  of  residence. 

Tilt  v.  Kelsey,  207  U.  S.  43;  28  S.  Ct.  Rep.  1. 
Matter  of  Horton,  217  N.  Y.  363;  111  N.  E.  1066. 

In  the  Horton  case  the  court  said: 

"  If  a  probate  court  of  another  state  otherwise  has 
jurisdiction  it  may  make  a  decree  admitting  a  will  to 
probate  which  is  binding  upon  non-residents  even  though 
notice  has  by  statute  been  dispensed  with,  and  such  pro- 
bate becomes  conclusive  in  the  absence  of  contest  within 
such  period  as  is  provided  by  the  laws  of  that  state.  But 
the  decision  of  the  Ohio  court  as  to  the  jurisdictional  fact 
of  residence  was  not  conclusive." 

It  has  been  held  in  New  York  that  a  decree  admitting 
a  will  to  probate,  where  the  residence  of  the  deceased  was 
alleged  as  a  jurisdictional  fact  in  the  petition,  and  so 
found  by  the  decree,  the  finding  could  not  be  attacked 
collaterally  in  the  New  York  courts. 

Bolton  v.  Shritver,  135  N.  Y.  65;  31  N.  K  1001. 
Flatauer  v.  Loser,  211  N.  Y.  16. 

But,  on  the  other  hand,  the  New  York  courts  are  com- 
mitted to  the  doctrine  that,  although  the  jurisdiction  in 


PART  V  —  PROCEDURE  ,  405 

the  transfer  tax  proceeding  is  founded  upon  the  juris- 
diction in  the  probate  proceeding,  the  decree  of  probate 
is  not  conclusive  upon  the  surrogate  in  the  proceedings 
to  fix  the  tax,  as  to  the  residence  of  the  deceased,  nor 
are  the  beneficiaries  estopped  from  attacking  it. 

Matter  of  Grant,  83  Misc.  257;  144  Supp.  567;  aff.  166  App.  Div. 

921;  151  Supp.  1119. 

Matter  of  Hernandez,  172  App.  Div.  467;  159  Supp.  59;  aff.  219 
N.  Y.  24. 

In  the  Hernandez  case  the  will  recited  that  deceased 
was  a  resident  of  New  York  county  and  the  petition  for 
its  probate  so  alleged,  also  the  petition  for  the  appoint- 
ment of  an  appraiser.  But  when  the  transfer  tax  pro- 
ceedings were  fairly  under  way  the  Cuban  heirs  alleged 
that  the  deceased  was  a  resident  of  Cuba  and  were 
successful  in  establishing  that  contention.  The  comp- 
troller appealed  on  the  theory  that  the  probate  decree  was 
conclusive  on  the  inheritance  tax  proceedings. 

The  Appellate  Division  in  overruling  his  contention, 
reasoned  thus : 

11  It  is  not  a  collateral  action  or  proceeding  in  a 
separate  court,  but  a  part  of  the  process  of  administra- 
tion in  the  same  court.  I  do  not  think  therefore  that  the 
rule  laid  down  in  the  two  cases  applies  (the  Bolton  and 
Flatauer  cases,  supra).  It  seems  to  me  that  it  comes 
rather  within  the  reasoning  of  Matter  of  Patterson,  146 
N.  Y.  327;  40'  N.  E.  990;  where  letters  of  administration 
upon  the  estate  of  a  decedent  had  been  granted  to  her 
surviving  husband  upon  his  petition  asserting  that  rela- 
tionship without  notice  to  the  next  of  kin  or  any  appear- 
ances by  them,  and  where,  at  a  later  period  he  filed  his 
account  and  the  same  was  settled  by  the  surrogate  award- 
ing payment  of  the  whole  surplus  to  him  as  a  husband. 
Thereafter  the  next  of  kin  filed  a  petition  alleging  that  he 
was  never  in  fact  married  to  the  defendant  but  had 
obtained  the  estate  by  fraud  and  asked  to  have  the  decree 
on  the  accounting  and  former  distribution  set  aside  and 


406  INHERITANCE  TAXATION 

that  the  assets  in  the  hands  of  the  administrator  be  paid 
over  by  him  to  the  next  of  kin.  The  appellant  contended 
that  as  the  next  of  kin  claimed  under  and  in  affirmance 
of  the  order  appointing  Patterson  administrator  they 
could  not  at  the  same  time  attack  it  collaterally.  But  the 
court  held  that  they  did  not  attack  that  order  at  all  but, 
recognizing  the  authority  of  Patterson  as  administrator, 
they  ask  that  he,  as  lawful  administrator,  make  an  honest 
and  lawful  distribution.  The  order  appointing  the  admin- 
istrator might  stand  consistently  with  the  relief  asked. 
It  is  true  that  in  that  case  the  next  of  kin  had  not  been 
cited  upon  the  appointment  of  Patterson,  but  the  position 
there  taken  seems  to  me  in  line  with  that  taken  by  the 
respondents  herein,  which  is,  that  conceding  the  juris- 
diction of  the  Surrogate's  Court  to  admit  the  will  to  pro- 
bate because  decedent  had  property  here  at  the  time  of 
his  death  they  have  the  right  to  show  the  amount  of  such 
property  and  the  extent  of  its  taxability  as  decedent  was 
a  resident  of  Cuba  and  not  of  the  State  of  New  York. 
Furthermore,  the  State  of  New  York  was  not  a  party  to 
the  proceeding  for  the  probate  of  the  decedent's  will. 
In  the  cases  relied  on  by  appellant  the  question  of  estoppel 
arose  between  those  who  had  either  been  parties  to  the 
original  decree  or  privies  of  such  parties." 

b.     DECREE  OF  DISTRIBUTION. 

A  final  decree  of  distribution  after  claims  for  creditors 
have  been  advertised  bars  a  tax  proceeding  in  another 
state  under  the  "  full  faith  and  credit  "  clause  of  the 
United  States  Constitution. 

Tilt  v.  Kelsey,  207  U.  S.  43;  28  S.  Ct.  Rep.  1. 

But  it  does  not  relieve  the  executor  or  beneficiary  of 
his  personal  liability,  as  the  state  is  in  no  way  a  party  to 
the  proceedings. 

'Attorney-General  v.  Stone,  209  Mass.  186;  95  N.  E.  395. 
Attorney-General  v.  Rafferty,  209  Mass.  321;  95  N.  E.  747. 


PART  V  —  PBOCEDUKE  407 

The  court  said  in  the  Stone  case : 

"  The  defendant's  liability  could  not  be  affected  or 
destroyed  by  the  action  of  the  Probate  Court  upon  the 
accounts  of  the  administrator  or  of  the  trustee.  Estate 
of  Lander's,  6  Cal.  App.  744;  93  Pac.  202.  That  action 
could  not  operate  collaterally  to  bar  the  remedy  now 
sought  for.  Neither  the  second  nor  the  final  account  of 
the  trustee  was  allowed  until  after  the  statute  before  us 
had  taken  effect.  If  the  administrator  did  not  comply  with 
the  statute  in  force  when  he  filed  his  final  account,  this 
failure  merely  left  the  succession  tax  upon  the  residue  of 
the  estate  unpaid,  and  so  brought  it  within  the  operation 
of  the  statute  of  1902.  The  Commonwealth  was  not  a 
party  to  any  of  these  accounts,  nor  was  it  made  so  by  the 
publication  of  notice." 

So  it  was  held  that  the  listing  of  bonds  of  a  foreign 
corporation  temporarily  within  the  state  in  the  inventory 
filed  for  ancillary  administration  and  the  decree  of  dis- 
tribution are  not  conclusive  as  to  the  facts  which  entitle 
the  state  to  demand  the  tax  upon  appeal  from  an  order 
fixing  said  tax. 

Estate  of  McCahill,  171  Cal.  482;  153  Pac.  930. 

In  a  proceeding  in  equity  to  obtain  distribution  the  court 
may  require  payment  of  the  tax  before  distribution 
although  the  Probate  Court  is  given  special  authority 
over  matters  of  taxation. 

Kentucky  St.  1906,  c.  22,  ss.  13,  14,  15,  confer  juris- 
diction on  the  county  court  to  determine  questions  arising 
in  relation  to  the  tax,  but  this  jurisdiction  is  not  exclusive 
when  the  jurisdiction  of  the  court  of  equity  is  invoked  to 
distribute  an  estate  and  the  interest  of  each  or  any  num- 
ber of  the  heirs  at  law  is  subject  to  the  inheritance  or  other 
tax.  The  court  at  the  instance  of  the  official  representa- 
tive of  the  commonwealth  charged  with  the  duty  of  col- 
lecting such  tax  may  require  its  payment  out  of  the  share 


408  INHEEITANCE  TAXATION 

or  shares  of  those  chargeable  with  the  tax  before  dis- 
tributing the  estate  or  funds  among  them,  and  thereby 
save  both  the  tax  collector  and  the  heirs  the  trouble  and 
expense  of  a  separate  and  independent  proceeding  in  the 
county  court  to  compel  the  payment  of  the  tax.  The  cir- 
cuit court,  therefore,  in  requiring  the  payment  of  the  tax 
before  distribution  did  not  exceed  its  jurisdiction." 
Barret  v.  Continental  Realty  Co.,  130  Ky.  109,  114  S.  W.  750. 

C.      JURISDICTION  OF  THE  TAX  PROCEEDINGS. 

The  court  granting  letters  of  administration,  letters 
testamentary  or  ancillary  letters  universally  has  juris- 
diction of  the  inheritance  tax  proceedings;  but  it  is  not 
necessary  in  case  of  a  non-resident  that  ancillary  letters 
should  actually  have  been  issued.  If  there  is  property 
of  decedent  within  the  county,  so  that  the  court  would 
have  jurisdiction  to  issue  such  letters,  it  is  sufficient. 
Matter  of  Fitch,  160  N.  Y.  87;  54  N.  E.  701. 

The  court  said:  "  The  jurisdiction  of  the  court  is 
determined  by  the  answer  to  the  question :  Had  the  court 
power  to  issue  letters  t  ' ' 

The  surrogate  of  the  county  in  which  donee  of  a  power 
of  appointment  resided  has  exclusive  jurisdiction. 
Matter  of  Seaver,  63  App,  Div.  823;  71  Supp.  544. 

Or,  where  the  donee  was  a  non-resident,  where  the  real 
estate  over  which  the  power  is  exercised  is  situated. 
Matter  of  Lowndes,  60  Misc.  506 ;  113  Stipp.  1114. 

Where  personal  property  of  a  non-resident  is  located 
within  the  county  a  surrogate  has  jurisdiction  in  trans- 
fer tax  proceedings  although  the  said  decedent  owned 
real  estate  in  another  county. 

Matter  of  Arnold,  114  App.  Div.  244;  99  Supp.  740. 


PABT  V  —  PBOCEDURE  409 

But  when  letters  have  been  issued  the  inheritance  tax 
proceedings  should  be  brought  before  the  same  court. 
Matter  of  Arnold,  114  App.  Div.  244;  99  Supp.  740. 

2.  Assessment  of  the  Tax. 

a.     THE  JUDGE  ACTS  AS  TAXING  OFFICER. 

Although  the  statutes  almost  universally  impose  the 
duty  of  assessing  the  tax  upon  the  judge  of  the  court  in 
which  the  estate  is  administered,  the  provisions  have  been 
attacked  as  unconstitutional  in  imposing  ministerial  or 
clerical  functions  upon  a  judicial  officer, —  but  this  objec- 
tion has  nowhere  been  sustained. 

As  the  court  said  in  Union  Trust  Co.  v.  Probate  Judge, 
125  Mich.  487 ;  84  N.  W.  1101,  at  page  494 :  "  These  duties 
are  necessarily  incident  to  the  settlement  of  estates  and 
may  be  performed  by  the  probate  judge." 

So  it  was  held  in  Wisconsin  that  it  is  the  law,  not  the 
court,  that  fixed  the  tax,  but  that  the  court  "As  an  incident 
to  the  settlement  of  estates  simply  determines,  in  a  judi- 
cial way,  certain  facts  necessary  to  be  ascertained  to 
determine  how  much  the  tax  fixed  by  law  amounts  to  in 
a  given  case.  These  duties  seem  to  us  as  judicial  in  their 
character,  and  very  properly  entrusted  to  the  County 
court  in  which  the  estate  is  being  administered.'* 
Nunnemacher  v.  State,  129  Wis.  190,  223;  108  N.  W.  627. 

Surrogate  Fowler  of  New  York  county  refused  to  fix 
the  maximum  and  minimum  rates  under  the  New  York 
statute  in  regard  to  the  immediate  taxation  of  contingent 
remainders  on  the  ground  that  such  mathematical  details 
were  for  the  convenience  of  the  comptroller,  were  purely 
ministerial,  and  could  not  constitutionally  be  imposed 
upon  a  judge  of  a  court  of  record.  His  opinion  was  long 
and  learned  but  he  was  mistaken  in  the  law  and  was 
reversed  by  the  Appellate  Division. 


410  INHERITANCE  TAXATION 

The  court  said : 

"  It  is  this  latter  determination  which  the  learned  sur- 
rogate has  been  asked  and  has  refused  to  make.  He  has 
couched  his  refusal  in  a  very  vigorous  and  positive 
opinion  in  which  he  has  undertaken  to  demonstrate  at 
some  length  that  the  Surrogate,  now  that  his  court  has 
been  made  a  constitutional  court  and  a  court  of  record, 
is  a  judicial  officer  and  that  it  is  beyond  the  power  of  the 
legislature  itself  to  impose  upon  a  judicial  officer  the  per- 
formance of  purely  ministerial  and  non-judicial  duties 
such  as  he  considers  that  the  state  comptroller  asks  him  to 
perform  '  *.  •  It  needed  much  less  argument  and 

citation  of  authorities  than  has  been  expended  upon  the 
subject  to  prove  that  the  surrogate  is  a  judicial  officer 
and  that,  as  such,  no  duties  can  be  lawfully  imposed  upon 
farm  except  those  of  a  judicial  nature.  We  do  not  agree, 
however,  that  the  determination  which  the  Surrogate  has 
been  asked  to  make  is*  wholly  unjudicial  in  its  character 
or  that  it  is  one  w^hich  cannot  be  made  by  a  court  of 
record  established  by  the  constitution  without  a  sur- 
render of  its  dignity.  It  is  certainly  no  more  so  than  is 
the  act  of  the  Surrogate  in  fixing  the  amount  of  the  tax 
chargeable  upon  a  contingent  remainder  at  the  highest 
rate  possible  under  the  provisions  of  the  will  although 
both  involve  incidentally  the  making  of  a  mathematical 
calculation.  *  *  *  We  find  ourselves  unable  fully  to 
appreciate  the  suggestion  of  the  learned  surrogate  that 
the  determination  he  is  asked  to  make  is  solely  for  the  bene- 
fit of  the  state  comptroller.  It  is  at  least  as  much  for  the 
benefit  of  the  trust  beneficiaries  in  consideration  for  whom 
the  present  act  was  passed  and  above  all  it  is  for  the 
benefit  of  the  due  and  orderly  administration  of  justice 
which  requires  that  questions  which  may  give  rise  to 
differences  and  litigation  should,  when  possible,  be  avoided 
by  apt  and  proper  judicial  action." 

Matter  of  Spingarn,  175  App.  Div.  806 ;  162  Supp.  695. 


PART  V  —  PROCEDURE  411 

b.  THE  TAXING  ORDER. 

Under  the  New  York  practice  the  surrogate  enters  the 
decree  fixing  the  tax  "as  of  course  "  and  if  either  party 
is  dissatisfied  an  appeal  lies  to  the  surrogate  himself. 
Although  this  appeal  is  anomalous  in  form  it  works  out 
in  practice  satisfactorily  for  the  taxing  order  is  really 
drawn  by  the  appraiser  or  the  attorneys  and  approved  by 
the  court  "  pro  forma." 

Weston  v.  Goodrich,  86  Hun  194;  33  Supp.  382. 

The  phrase  "as  of  course  "  relates  to  the  practice 
rather  than  to  the  law  in  reference  to  the  entry  of  the 
order  determining  the  amount  of  tax,  and  means  that  when 
the  report  of  the  appraiser  is  filed  the  surrogate  is  to 
proceed  with  the  entry  of  the  order  without  the  interven- 
tion of  any  one. 

Matter  of  Fuller,  62  App.  Div.  428-432;  71  Supp.  40. 

Assuming  that  a  surrogate,  in  fixing  a  transfer  tax  and 
making  the  decree  assessing  it,  does  not  act  as  surrogate, 
but  simply  as  a  taxing  officer,  yet  the  decree  upon  the 
taxation,  becomes  a  decree  or  order  of  his  court. 

Matter  of  Scrimgeour,  80  App.  Div.  388,  80  Supp.  636;  aff.  175  N. 
Y.  507;  67  N.  E.  1089. 

A  surrogate  in  assessing  a  transfer  tax  acts  judicially 
and  not  ministerially.  It  is  true  that  the  power  of  tax- 
ation is  one  which  belongs  to  the  legislative  department, 
and  it  is  equally  true  that  some  of  the  functions  of  a  tax- 
ing officer  are  ministerial,  but  it  is  well  established  by 
authority,  that  in  determining  the  value  of  property 
assessed,  the  extent  of  claims  by  exemption,  etc.,  the  tax- 
ing officer  or  board  acts  judicially. 

Matter  of  Hull,  109  App.  Div.  248;  95  Supp.  819. 

c.  REPORT  MAY  BE  REMITTED  TO  APPRAISER. 

The  surrogate  may,  of  his  own  motion,  or  as  a  result 
of  the  appeal  from  the  pro  forma  taxing  order  remit  the 


412  INHERITANCE  TAXATION 

report  to  the  appraiser  either  before  or  after  entering 
the  order  thereon. 

"Matter  of  Lansing,  31  Misc.  148;  64  Supp.  1125. 
Matter  of  Kelly,  29  Misc.  169;  60  Supp.  1005. 

He  may  require  the  correction  of  mistakes  or  the  taking 
of  further  evidence. 

Matter  of  Baker,  38  Misc.  151;  77  Supp.  170. 
Matter  of  Frolich,  N.  Y.  L.  J.,  April  30,  1913. 
Matter  of  Loster,  N.  Y.  L.  J.,  July  29,  1913. 

And  this  may  be  done  on  motion  after  the   time   to 
appeal  has  expired  on  proper  cause  shown. 
Matter  of  Head,  N.  Y.  L.  J.,  Dec.  22,  1911. 

See  Post,  Motions  to  Modify  Decree,  p.  444. 

If  there  is  evidence  to  sustain  the  finding  of  the 
appraiser  and  such  finding  is  not  clearly  against  the 
weight  of  evidence  it  will  not  be  disturbed  by  the  surro- 
gate on  appeal  from  the  pro  forma  taxing  order.  So, 
where  the  assessed  value  of  the  real  estate  was  $58,000. 
the  evidence  submitted  for  the  estate  valued  it  at  $61,- 
000  and  that  produced  on  behalf  of  the  Comptroller  that 
it  was  worth  $70,000  an  appraisal  of  $68,000  was  sus- 
tained. 

Matter  of  M.  A.  Valentine,  N.  Y.  L.  J.,  June  22,  1915. 

But  the  surrogate  cannot  assess  the  tax  upon  mere  guess 
and  the  record  before  him  must  show  the  facts  or  it  will 
be  sent  back  for  additional  proof. 

Matter  of  Wunsch,  N.  Y.  L.  J.,  Jan.  24, 1913. 
Matter  of  Dudley,  N.  Y.  L.  J.,  March  4,  1913. 
Matter  of  De  Wollf,  N.  Y.  L.  J.,  Feb.  24,  1913. 

Such  order  is  not  appealable. 

Matter  of  Astor,  137  App.  Div.  922;  122  Supp.  1121. 
Nor  has  the  Supreme  Court  power  to  vacate  such  an 
order. 

Natter  of  Smith,  40  App.  Div.  480;  58  Sup.  128. 


PABT  V  —  PBOCEDUBE  413 

d.     FORMS  OF  TAXING  ORDER. 

(1)  Where  there  are  no  contingent  remainders. 
These  are  comparatively  simple  and  a  sample  is  given 
without  further  comment. 

Order  Fixing  Tax. 

At  a  Surrogate's  Court  held  in  and  for  the 
County  of  New  York  at  the  hall  of  Records 
in  the  Borough  of  Manhattan,  City  of  New 
York,  on  the  6th  day  of  June,  1916. 

Present  —  Hon.  JOHN  P.  COHALAN,  Surrogate. 


In  the  Matter 

of 

The  Transfer  Tax  upon  the  Estate  of 
MARY  HORLER, 

Deceased. 

Upon  reading  the  report  of  the  appraiser,  John  J. 
Lyons,  Esq.,  duly  filed  herein  on  the  24th  day  of  May,  1916, 
wherein  it  appears  that  said  decedent  died  on  the  24th 
day  of  July,  1915,  and  upon  motion  of  Lafayette  B. 
Gleason,  attorney  for  the  State  Comptroller, 

IT  is  ORDERED  AND  ADJUDGED  that  the  cash  value  of  the 
property  referred  to  in  said  report,  the  transfer  of  which 
is  subject  to  the  tax  imposed  by  the  act  in  relation  to  tax- 
able transfers  of  property  and  the  tax  to  which  said  trans- 
fers are  liable  is  as  follows : 

Amount  Amount  of  Taxable  Tax 

Beneficiary  Received  Exemption  Amount 


Elizabeth  Bogart, 

Daughter,  $5,325  $5,000          $325  $3.25 

James  Horler, 

Husband,  32,215.63  5,000       27,215.63    272.16 

JOHN  P.  COHALAN, 

Surrogate. 


414  INHERITANCE  TAXATION 

(2)  Present  Taxation  of  Contingent  Remainders. 

The  statute  at  first  provided  that  the  tax  should  be 
assessed  against  such  remaindermen  as  a  class  at  the 
highest  possible  rate  with  provisions  for  a  refund  in  case 
a  less  amount  proved  to  be  due  and  Surrogate  Fowler  of 
New  York  county  thus  interpreted  the  provision  in  Matter 
of  Simmons,  N.  Y.  Law  Journal,  June  14,  1912: 
'  ' '  As  section  230  of  the  Tax  Law  was  not  changed  by  the 
amendment  of  1910,  it  must  be  presumed  that  the  Legis- 
lature intended  that  the  provisions  of  that  section  should 
apply  to  the  assessment  of  tax  under  the  new  rates. 
Where,  therefore,  a  remainder  is  contingent,  but  is  limited 
to  beneficiaries  of  the  one  per  cent,  primary  rates,  it  must 
be  taxed  as  if  it  passed  to  a  single  individual  of  that  class ; 
if  it  may  pass  to  beneficiaries  in  the  classification  of  the 
five  per  cent,  primary  rate,  it  must  be  assessed  as  if  it 
passed  to  a  single  individual  in  that  class. 

"  The  remainder  after  the  life  estate  of  decedent's 
widow  should  be  taxed  as  follows:  Mabel  S.  Tilden, 
daughter,  surviving  life  estate  in  the  sum  of  $250,000; 
remainder  after  said  life  estate  to  be  assessed  against  the 
trustees  and  taxed  at  the  five  per  cent.  rate.  All  the  rest 
and  residue  of  the  remainder  should  be  assessed  against 
the  trustees  for  Joseph  F.  Simmons,  son,  at  the  rate  of 
one  per  cent.  The  order  submitted  upon  the  appraiser's 
report  may  contain  a  provision  that,  upon  the  vesting  in 
possession  of  any  of  the  remainders,  or  the  exercise  of 
any  of  the  powers  of  appointment  given  by  decedent's 
will,  an  application  may  be  made  to  modify  the  order  fix- 
ing tax  in  accordance  with  the  actual  devolution  of  the 
property. ' ' 

In  practice  this  proved  a  hardship  as  money  was  diverted 
from  trust  estates  which  would  in  all  probability  never 
reach  the  treasury  and  in  1911  the  act  (Sec.  241)  was 
amended  to  provide  for  a  temporary  taxing  order  which 


PAET  V  —  PROCEDURE  415 

should  show  the  difference  between  the  highest  rate  and 
that  which  would  be  due  if  the  remainder  fell  in  at  once. 
This  difference  is  deposited  and  interest  paid  to  the 
trustees  while  the  rest  goes  to  the  state  treasury  as  art 
of  the  current  revenues. 

Matter  of  Billingsley,  1  State  Dept.  Rep.  569. 

Or  securities  may  be  deposited  in  lieu  of  cash. 
Matter  of  Leuff,  I  State  Dept.  Rep.  567. 

The  practice  was  thus  explained  in  an  opinion  by  the 
State  Comptroller  in  Matter  of  Everett,  3  State  Depart- 
ment reports,  450 : 

"  To  comply  with  this  provision  the  taxing  order  should 
first  extend  the  tax  on  the  remainders  as  they  would  be  tax- 
able if  they  had  actually  vested  in  possession  on  the  day 
of  the  appraisal,  and  this  statement  should  be  followed 
by  the  extension  of  the  tax  at  the  highest  rate  on  which 
there  is  any  possibility  of  the  remainders  ultimately 
vesting;  and  the  difference  between  the  tax  at  the  highest 
rate  and  the  other  tax  as  shown  to  be  due  in  the  event 
of  the  remainders  having  vested  at  the  .date  of  the 
appraisal  would  be  the  amount  the  comptroller  should 
retain  and  pay  the  income  thereon  to  the  executors  of  the 
estate  until  the  remainders  ultimately  vested.  There  is  a 
remainder  to  nieces  in  case  of  the  death  of  all  the  chil- 
dren without  issue. 

• 

It  was  this  form  of  order  that  was  approved  by  the 
Appellate  Division  in  Matter  of  Spingarn,  175  App.  Div. 
806;  162  Supp.  695;  after  Surrogate  Fowler  had  refused 
to  sign  it,  that  learned  jurist  contending  that  the  form  in 
Matter  of  Simmons,  supra  and  in  Matter  of  Valentine, 
88  Misc.  397;  150  Supp.  733  was  in  accordance  with  the 
statute  and  all  that  a  judicial  officer  should  be  asked  to  do. 

To  understand  the  problem  we  must  take  an  illustra- 
tive case,  slightly  changed  as  to  names  and  facts. 


416  INHERITANCE  TAXATION 

Assume  absolute  bequests  by  testatrix  to  three  children 
of  ten,  fifteen  and  twenty  thousand  respectively;  then  a 
life  estate  in  the  residue  to  the  husband,  Jean  Baptiste, 
on  his  death  the  said  residue  to  be  divided  among  such 
children  as  shall  survive  him.  A  fourth  child  is  given  no 
specific  bequest  but  takes  a  contingent  remainder  in  the 
residue  with  the  others.  The  residuary  estate  is  appraised 
at  $78,257  and  the  husband's  life  use  is  calculated  by  the 
Insurance  department  and  valued  at  $21,591.  There  is  a 
remainder  to  nieces  in  case  of  the  death  of  all  the  children 
without  issue. 

The  taxing  order  in  this  supposed  case  which  is 
slightly  altered  from  an  actual  case,  Avould,  under  the 
bequests  assumed,  and  pursuant  to  the  rulings  of  the 
State  Comptroller  as  herein  set  forth,  be  as  follows : 

At  a  Surrogate's  Court  held  in  and  for  the 
County  of  New  York  at  the  Hall  of  Records, 
in  the  Borough  of  Manhattan,  City  of  New 
York,  on  the  llth  day  of  June,  1917. 

Present. —  Hon.  JOHN  P.  COHALAN,  Surrogate. 


In  the  Matter   of 
The  Transfer  Tax  Upon  the  Estate 

of 
MARY  ANN  BAPTISTE, 

Deceased. 


Upon  reading  the  report  of  the  appraiser, 

,  Esq.,  duly  filed  herein  on  the  10th  day  of  June, 

1917,  wherein  it  appears  that  said  decedent  died  on  the 
18th  day  of  Januarjr,  1917,  and  upon  motion  of  Lafayette 
B.  Gleason,  Attorney  for  the  State  Comptroller, 

IT  is  ORDERED  AND  ADJUDGED,  That  the  cash  value  of  the 
property  referred  to  in  said  report,  the  transfer  of  which 


PART  V  —  PROCEDURE 


417 


is  subject  to  the  tax  imposed  by  the  act  in  relation  to  tax- 
able transfers  of  property  and  the  tax  to  which  said  trans- 
fers are  liable  is  as  follows: 


Beneficiary 

Jean  Baptiste $21,591 

Marie  Baptiste 

Joseph  Baptiste 

Ann  Baptiste 

Executors  for  benefit  of  5% 

class    78,257 


Amount 

Amount  of 

Taxable 

Tax 

received 

exemption 

amount 

assessed 

£21,591 

$5,000 

$16,591 

$166.91 

10,000 

5,000 

5,000 

50. 

15,000 

5,000 

10,000 

100. 

20,000 

5,000 

15,000 

150. 

0         78,257     4,478. 


And  it  is  further 

ORDERED  AND  ADJUDGED  that  of  the  tax  above  assessed 
against  the  Executors  and  Trustees  for  the  benefit  of  the 
five  per  cent  (5%)  class,  the  tax  upon  such  remainder  or 
remainders  which  would  be  due  if  the  contingencies  or 
conditions  had  happened  at  the  date  of  the  appraisal  of 
the  estate  is  as  if  the  same  vested  as  follows: 


Beneficiary 

Ann  Baptiste 

Joseph  Baptiste. . . 
Marie  Baptiste 
Julia  Baptiste   . . . 


Anumnt 
received 


Amount  of 
exemption 


Taxable 
amount 


$19,564  25     $19,564  25 

19,56425     19,56425 

19,564  25     19,564  25 

19,564  25  $5,000  00  14,564  25 


Tax 
assessed 

$292  92 
241  28 
195  64 
145  64 


Five  per  cent  on  $25,000  is  $1,250,  on  the  next  $50,000 
the  rate  is  6  per  cent  and  the  tax  $3,000  and  on  the  balance 
of  $3,257  above  $75,000  the  rate  is  7  per  cent  and  the  tax 
$228,  giving  the  total,  $4,478. 

If  the  life  tenant  were  dead  at  the  date  of  the  appraisal 
the  tax  on  the  remainder  interests  would  be  as  set  forth 
in  the  order  amounting  to  a  total  of  $875.48. 

The  comptroller  deducts  this  from  the  total  tax  on  the 
residue  and  turns  it  into  the  treasury  as  part  of  the 
revenue  for  the  current  year  from  inheritance  taxation. 
The  balance,  or  $3,603.52,  in  cash  or  securities,  is  deposited 

14 


418  INHERITANCE  TAXATION 

and  the  interest  paid  to  the  trustees,  until  the  termination 
of  the  life  estate,  when  the  amount  will  be  returned  to 
the  estate  unless  it  proves  taxable  at  the  5  per  cent  rate. 
For  recent  cases  involving  taxation  of  contingent 
remainders  at  maximum  and  minimum  rates  see: 

Matter  of  Zborowski,  213  N.  Y.  109. 

Matter  of  Button,  176  App.  Div.  217,  160  Supp.  223;  aff.  220  N.  Y. 

210. 

Matter  of  Shearson,  174  App.  Div.  866;  aff.  220  N.  Y.  mem. 
Matter  of  Steinwender,  172  App.  Div.  871;  158  Supp.  779;  aff.  221 

N.  Y.  mem. 
People  v.  Starring,  274  111.  289;  113  N.  E.  627. 

e.    EFFECT  OF  DECREE  ASSESSING  TAX. 

If  there  is  no  appeal  the  pro  forma  order  fixing  tax  is 
the  final  termination  of  the  tax  proceeding  and  is  final  and 
conclusive  on  all  questions  of  law  and  fact  litigated  before 
the  surrogate  of  which  he  had  jurisdiction. 

Matter  of  Lansing,  31  Misc.  148;  64  Supp.  1125. 
Matter  of  Crerar,  56  App.  Div.  479;  67  Supp.  795. 
Matter  of  Schermerhorn,  38  App.  Div.  350 ;  57  Supp.  26. 
Matter  of  Rice,  56  App.  Div.  253;  61  Supp.  911;  68  Supp.  1147. 

Payment  of  the  tax  to  the  comptroller  and  the  issuance 
of  his  receipt  so  far  as  a  life  estate  is  concerned  does  not 
estop  him  from  appealing  from  so  much  of  the  order  as 
declares  that  a  vested  remainder,  after  the  life  estate,  "  is 
at  present  undeterminable  and  is  now  not  subject  to  tax." 

Matter  of  Bogert,  25  Misc.  466;  55  Supp.  751. 

A  decree  of  a  surrogate  in  a  transfer  tax  proceeding  is 
binding  only  on  questions  of  taxation,  and  any  finding 
made  by  the  appraiser  as  to  the  validity  of  an  alleged 
indebtedness  of  decedent  to  his  executrix  will  not  prevent 
the  bringing  of  an  action  by  legatees  to  determine  the 
validity  of  such  indebtedness. 

Matter  of  Crawford,  85  Misc.  283;  147  Supp.  234. 


PART  V  —  PROCEDURE  419 

In  proceedings  under  the  Inheritance  Tax  Act,  the 
determination  of  the  surrogate  that  a  certain  amount  of 
property  passed  to  a  residuary  legatee  is  binding  upon 
the  question  of  taxation  only,  and  is  not  conclusive  upon 
the  rights  of  parties  arising  outside  of  the  will. 

Amherst  College  v.  Ritch,  151  N.  Y.  282;  45  N.  E.  876. 

Where,  a  former  report  of  an  appraiser  determines  the 
value  of  certain  remainder  interests  which  are  held  not 
presently  taxable,  such  determination  and  order  of  the 
surrogate  entered  thereon  are  no  bar  to  a  subsequent  pro- 
ceeding to  determine  the  value  of  the  remainders  upon  the 
death  of  the  life  tenant,  "  without  diminution  for  or  on 
account  of  any  valuation  theretofore  made  of  the  par- 
ticular estates  for  the  purposes  of  taxation." 

Matter  of  Irwin,  36  Misc.  277 ;  73  Supp.  415. 

Matter  of  Mason,  120  App.  Div.  738;  105  Supp.  667;  aff.  sub.  nom. 

Matter  of  Naylor,  189  N.  Y.  556 ;  82  N.  E.  1129. 

But  the  appraiser's  report  and  the  taxing  order  should 
suspend  from  taxation  specifically  such  matters  as  are 
reserved.  The  order  is  final  and  conclusive  as  to  all  ques- 
tions raised  before  the  appraiser  and  is  presumed  to  cover 
all  assets  found  to  be  taxable. 

Matter  of  Wolfe,  137  N.  Y.  205;  33  N.  E.  156. 
Matter  of  Howry,  114  App.  Div.  904;  100  Supp.  1131. 
Matter  of  Connolly,  38  Misc.  466;  77  Supp.  1032. 

3.  Appeal  to  the  Surrogate, 
a.    NOTICE  OF  APPEAL. 

Under  the  New  York  practice  an  appeal  lies  from  the 
pro  forma  order  to  the  surrogate  by  the  party  aggrieved, 
by  filing  a  notice  of  appeal  within  sixty  days  of  the  entry 
of  the  order  stating  the  grounds  upon  which  the  appeal 
is  taken. 


420  INHERITANCE  TAXATION 

In  New  York  County  it  is  usually  heard  on  briefs  with- 
out oral  argument  except  where  the  surrogate  desires  it, 
and  it  has  been  held  that  an  extension  of  time  to  file  briefs 
must  be  granted  by  the  court  and  not  merely  on  stipulation 
of  attorneys. 

Matter  of  Linley,  N.  Y.  Law  Journal,  February  19,  1914. 

When  the  notice  of  appeal  fails  to  state  the  grounds  it 
is  dismissed. 

Matter  of  Stone,  56  Misc.  247;  107  Supp.  385. 
Matter  of  Tracy,  86  Supp.  1024. 

Where  the  statute  requires  the  grounds  of  the  appeal  to 
be  stated,  none  except  those  specified  can  be  considered. 
Matter  of  Davis,  149  N.  Y.  539-548;  44  N.  E.  185. 

The  review  by  the  surrogate  on  an  appeal  to  him  is 
limited  to  the  items  specified  in  the  notice  of  appeal. 

Matter  of  Wormser,  51  App.  Div.  441 ;  64  Supp.  897. 
Matter  of  Reynolds,  163  Supp.  803. 

The  purpose  of  requiring  the  notice  of  appeal  to  the 
surrogate  to  state  the  grounds  the  appeal  is  made  upon 
was  to  limit  the  questions  to  be  reviewed  by  him  to  those 
only  stated  in  the  notice,  and  neither  the  Supreme  Court 
nor  the  Court  of  Appeals  can  review  any  question  except 
that  reviewed  by  the  surrogate. 

Matter  of  Manning,  169  N.  Y.  449-452;  62  N.  E.  565. 

This  rule  was  emphasized  by  the  Appellate  Division  in 
the  recent  case  of  Matter  of  Rockefeller,  177  App.  Div.  786 ; 
165  Supp.  154,  when  the  court  said: 

' '  On  the  hearing  of  the  appeal  before  the  Surrogate  the 
fact  of  the  payment  of  these  sums  by  the  Executors  to  the 
various  beneficiaries  was  stipulated.  Objection  to  the 
reception  of  the  fact  was  made  by  the  state  comptroller. 


PART  V  —  PROCEDURE  421 

The  comptroller  offered  certain  evidence  to  which  objec- 
tion was  made  by  the  attorneys  for  the  executors  and  the 
surrogate,  expressed  doubt  as  to  his  power  to  consider  the 
evidence,  upon  the  ground  that  it  was  no  part  of  the  record 
before  the  appraiser. 

"  In  our  opinion  he  did  not  have  power  to  consider  the 
evidence.  The  statute  requires  the  notice  of  appeal 
4  shall  state  the  grounds  upon  which  the  appeal  is  taken  ' 
(Tax  Law,  Sec.  232,  derived  from  Laws  1892,  Ch.  397, 
Sec.  13),  and  none  but  those  specified  can  be  considered. 
(Matter  of  Davis,  149  N.  Y.  539,  548 ;  44  N.  E.  185 ;  Matter 
of  Manning,  169  id.  449,  451;  62  N.  E.  565.)  In  the  event 
of  new  facts  arising  after  the  notice  of  appeal  was  filed 
it  has  been  held  that  '  the  statute  might  be  construed 
so  as  to  permit  the  raising  upon  an  appeal,  of  a  question 
which  did  not  enter  into  the  original  determination  and 
was  first  made  known  after  the  appeal  had  been  taken/ 
(Matter  of  Westurn,  152  N.  Y.  93,  104;  46  N.  E.  315.) 
We  will  not,  therefore,  consider  the  very  interesting  ques- 
tions discussed  in  the  brief  of  the  appellant,  that  until 
payment  was  actually  made  by  the  executors  to  the  bene- 
ficiaries, the  property  either  passed  to  the  next  of  kin 
subject  to  be  divested  by  the  exercise  of  the  power,  or 
that  it  remains  in  the  trustee  and  is  subject  to  the  tax. 
These  questions  were  not  raised  before  the  appraiser  and 
are  not  specified  in  the  notice  of  appeal.  If  the  questions 
had  been  raised  before  the  appraiser,  the  fact  of  payment 
could  have  been  proved." 

b.    FORM  OF  NOTICE. 

By  way  of  illustration  the  following  is  given  as  an 
example  of  a  notice  of  appeal  to  the  surrogate  from  his 
pro  forma  order  fixing  the  tax: 


422  INHERITANCE  TAXATION 

Notice  of  Appeal  to  the  Surrogate  by  Executor. 

SURROGATE'S  COURT, 

COUNTY  OF  NEW  YORK. 


In  the  Matter 

of 

The  Transfer  Tax  upon  the  Estate  of 
MARY  HORLER, 

Deceased. 


Sirs: 

PLEASE  TAKE  NOTICE  that  James  Horler,  individually  and 
as  executor  of  the  Last  Will  and  Testament  of  Mary 
Horler,  deceased,  is  dissatisfied  with  the  appraisal  herein 
of  the  property  of  the  said  Mary  Horler,  deceased,  and 
hereby  objects  to  the  report  of  the  appraiser  filed  herein 
on  the  22nd  day  of  May,  1916,  and  to  the  order  or  decree 
made  herein,  fixing,  assessing  and  determining  the  Trans- 
fer Tax  in  respect  of  the  property  of  the  said  decedent, 
and  entered  herein  on  the  6th  day  of  June,  1916,  and 
hereby  appeals  to  the  Surrogate  from  said  appraisal  and 
said  assessment  and  determination  of  said  tax,  and  from 
said  order  or  decree. 

The  grounds  upon  which  said  appeal  is  taken  are: 
1.  That  the  tax  of  $3.25  imposed  upon  the  sum  of  $5,325 
less  an  exemption  of  $5,000,  stated  in  the  order  as  the 
amount  received  by  Eliza  Bogert  as  beneficiary,  was  unlaw- 
ful and  illegal;  because  the  affidavit  of  James  Horler  and 
schedules  thereto  attached  upon  which  the  appraisal  was 
made  show  that  the  value  of  the  estate  of  Mary  Horler 
did  not  exceed  the  sum  of  $325,  the  said  Mary  Horler 
having  been  the  owner  with  James  Horler,  the  executor, 
at  her  death,  of  certain  other  property  described  in  such 
schedules,  which  they  held  as  joint  tenants,  and  to  which 
at  her  death  the  said  James  Horler  became  entitled  as 


PART  V  —  PBOCEDURE  423 

survivor,  and  there  did  not  therefore  pass  to  Eliza  Bogert 
by  the  death  of  Mary  Horler  any  property  of  the  value 
of  $5,325. 

2.  That  the   value   of   the   transfer   passing  to   Eliza 
Bogert  upon  and  by  the  death  of  Mary  Horler,  did  not 
exceed  the  sum  of  $325.00,  and  that  such  transfer  is  not 
therefore  taxable,  under  the  provisions  of  the  tax  law  of 
the  State  of  New  York  relating  to  taxable  transfers. 

3.  That  the  tax  of  $272.16  imposed  upon  the  sum  of 
$32,215.63  less  an  exemption  of  $5000,  stated  in  the  order 
as  the  amount  received  by  James  Horler  as  beneficiary, 
was  and  is  unlawful  and  illegal  because : 

(a)  The  Taxable  Transfer  Act  of  the  State  of  New 
York  as  amended  by  the  laws  of  1915,  chapter  664,  section 
2,  which  amendment  went  into  effect  May  20,  1915,  under 
which  act  as  so  amended  said  tax  was  imposed,  in  so  far 
as  Section  220,  subdivision  7  thereof,  imposed  a  tax  upon 
the  right  of  the  surviving  tenant  by  the  entirety,  joint 
tenant  or  joint  tenants  to  the  immediate  ownership  or 
possession  and  enjoyment  of  intangible  property  held  in 
the  joint  names  of  two  or  more  persons  prior  to  the  20th 
day  of  May,  1915,  the  date  of  taking  effect  of  such  amend- 
ment, under  a  valid  contract  made  for  a  valuable  con- 
sideration, is  unconstitutional  and  void,  as  impairing  the 
obligation  of  contracts  and  as  taking  property  without  due 
process  of  law  and  as  denying  to  certain  persons  within 
the  jurisdiction  of  the  State  of  New  York  the  equal  pro- 
tection of  the  laws,  and  as  being  an  ex  post  facto  law,  and 
as  abridging  the  privileges  and  immunities  of  citizens  of 
the  United  States,  contrary  to  and  in  violation  of  Article  1, 
Section  10,  of  the  Constitution  of  the  United  States,  and 
Article  1,  Section  6  of  the  Constitution  of  the  State  of 
New  York,  and  contrary  to  and  in  violation  of  the  14th 
Amendment  of  the  Constitution  of  the  United  States. 

(b)  The  property  taxed  by  said  order  as  having  been 
received  by  James  Horler  as  beneficiary  was  property  held 


424  INHERITANCE  TAXATION 

by  him  and  the  above  named  decedent  Mary  Horler  at  her 
death  as  joint  tenants  under  written  instruments  and 
under  contracts  made  by  them  for  a  valuable  consideration 
prior  to  May  20,  1915,  and  under  the  laws  of  the  State  of 
New  York  as  in  force  at  the  time  of  the  making,  execution 
and  delivery  of  such  instruments  and  at  the  time  of  the 
making  of  said  contracts  the  property  affected  by  such 
instruments  and  such  contracts  and  the  transfer  thereof 
was  not  subject  to  or  liable  for  the  payment  of  a  transfer 
tax  upon  the  death  of  either  of  said  parties,  the  rights  of 
the  said  James  Horler  and  Mary  Horler  in  such  property 
became  fixed  and  vested  prior  to  May  20, 1915,  and  the  tax 
placed  upon  the  said  property  and  the  transfer  thereof 
was  and  is  therefore  contrary  to  and  in  violation  of 
Article  1,  Section  10  of  the  Constitution  of  the  United 
States,  and  Article  1,  Section  6  of  the  Constitution  of  the 
State  of  New  York,  and  in  violation  of  the  14th  Amend- 
ment of  the  Constitution  of  the  United  States. 

4.  That  the  tax  of  $272.16  imposed  upon  the  sum  of 
$32,215.63  less  an  exemption  of  $5000  stated  in  said  order 
as  the  amount  received  by  James  Horler  as  beneficiary 
was  and  is  unlawful  and  illegal,  because  at  her  death  Mary 
Horler  and  James  Horler  were  seized  and  possessed  of  the 
property    making   up    said   sum    of   $32,215.63    as    joint 
tenants,  each  of  them  owning  an  undivided  one-half  inter- 
est in  such  property,  and  there  was  therefore  only  trans- 
ferred from  Mary  Horler  to  James  Horler  by  her  death  an 
undivided  one-half  of  such  property;  and-  if  any  part  of 
said  property  is  taxable  only  the  said  half  thereof  should 
be  taxed  which  was  so  transferred  to  James  Horler.  by  the 
death  of  the  above  named  decedent  Mary  Horler. 

5.  That  it  was  and  is  erroneous  and  unlawful  to  include 
in  the  items  going  to  make  up  the  net  estate  of  Mary" 
Horler,  deceased,  one-half  of  the  market  value  of  the  real 
estate  mentioned  and  described  in  Schedule  A  of  the  affi- 
davit of  the  Executor  herein,  because  said  real  estate  at 


PAST  V  —  PROCEDURE  425 

her  death  formed  no  part  of  her  estate  but  was  held  at 
her  death  by  James  Horler  and  herself  as  joint  tenants 
and  upon  her  death  J-ames  became  entitled  to  the  said  real 
estate  as  survivor,  and  the  transfer  to  James  Horler  as 
such  survivor  was  not  and  is  not  a  taxable  transfer  under 
the  Taxable  Transfer  Act  of  the  State  of  New  York. 
Dated,  New  York,  July  . . . .,  1916. 

McREYNOLDs  &  HUNTER, 
Attorneys  for  James  Horler  indi- 
vidually   and    as    Executor    of 
Mary  Horler,  deceased, 

Office  and  P.  0.  Address, 

80  Maiden  Lane, 
Manhattan  Borough, 

New  York  City. 
To: 

LAFAYETTE  B.  GLEASON, 

Attorney  for  State  Comptroller, 
DANIEL  J.  DOWDNEY, 

Clerk  of  the  Surrogate's  Court 
of  the  County  of  New  York. 

4.  Determination  by  the  Surrogate, 
a.     HEARINGS  ON  APPEAL. 

It  is  not  the  practice  to  appoint  a  special  guardian  for 
an  infant. 

Matter  of  Post,  5  App.  Div.  113;  38  Supp.  977. 

Although  the  review  on  appeal  is  confined  to  the  ques- 
tions raised  by  the  notice,  on  those  questions  the  surrogate 
may  take  evidence  to  supplement  that  taken  before  the 
appraiser. 

Matter  of  Fuller,  62  App.  Div.  428;  71  Supp.  40. 

Matter  of  Gibbs,  60  Misc.  645;  113  Supp.  939. 

Matter  of  Bentley,  31  Misc.  656 ;  66  Supp.  95. 

Matter  of  Thompson,  57  App.  Div.  317;  68  Supp.  18. 


426  INHERITANCE  TAXATION 

In  the  Thompson  case  the  court  said: 

"  The  whole  matter  is  with  the  surrogate  and  continues 
with  him  until  the  final  determination  after  appeal.  The 
purpose  of  the  appeal  from  the  surrogate  to  the  surrogate 
is  not  simply  to  review  his  former  determination.  There 
is  no  occasion  to  limit  it  to  that.  The  beneficial  result  of 
such  a  rehearing  would  be  greatly  diminished  if  the  deter- 
mination of  the  surrogate  could  not  at  that  time  be  treated 
as  so  far  open  as  to  admit  new  testimony." 

The  comptroller  is  not  estopped  from  appealing  by 
accepting  payment  of  so  much  of  the  tax  as  is  conceded 
to  be  due. 

Matter  of  Schumacher,  N.  Y.  L.  J.,  March  13,  1914. 

In  order  to  justify  a  reversal  by  the  surrogate  there 
must  be  a  preponderance  of  evidence  one  way  or  the  other. 

Matter  of  Gilsey,  N.  Y.  L.  J.  March  10,  1914. 

Where  reappraisal  is  sought  on  appeal  the  papers  must 
show  some  ground  therefor,  where  they  failed  so  to  do  the 
surrogate  said:  "  There  is  nowhere  contained  in  appel- 
lant's papers  a  specific  fact,  or  statement  of  any  person 
competent  to  judge  that  this  stock  is  worth  one  dollar  more 
that  the  sum  for  which  it  has  been  appraised." 
Matter  of  Johnson,  37  Misc.  542,  75  Supp.  1046. 

Discovery  of  new  facts  must  be  shown  to  entitle  the 
comptroller  to  order  appointing  appraiser  to  tax  assets  the 
valuation  of  which  in  a  previous  appraisal  had  been 
suspended. 

Matter  of  De  Sala,  N.  Y.  L.  J.  July  20,  1912. 

As  to  new  facts  discovered  since  the  hearing  before  the 
appraiser  the  surrogate  may  take  evidence  even  though 
they  were  not  specified  in  the  notice  of  appeal: 

"  We  think  the  statute  ought  to  be  construed  so  as  to 
permit  the  raising  upon  appeal,  of  a  question  which  did 
not  enter  into  the  original  determination,  and  which  was 


PART  V  —  PROCEDURE  427 

first  made  known  after  the  appeal  had  been  taken,  and 
after  the  expiration  of  the  sixty  days.  The  surrogate  had 
jurisdiction  of  the  appeal  by  the  notice  actually  given,  and 
it  would  be  an  unwise  construction  of  the  act  to  limit  the 
hearing  so  as  to  exclude  the  consideration  of  a  new  ques- 
tion subsequently  arising,  on  the  ground  that  it  was  not 
specified  in  the  notice  of  appeal." 

Matter  of  Westurn,  152  N.  Y.  93,  104;  46  N.  E.  315. 

But  this  is  confined  strictly  to  newly  discovered  evidence. 
It  does  not  apply  when  the  testimony  might  just  as  well 
have  been  put  in  before  the  appraiser. 

\Matter  of  Rockefeller,  177  App.  Div.  786 ;  165  Supp.  154. 

Nor  to  objections  that  might  have  been  taken  before  him. 

Matter  of  Mills,  712  App.  Div.  530;  158  Supp.  1100;  aff.  219  N.  Y. 
100. 

b.     ON  MOTIONS  TO  EXEMPT. 

As  we  have  seen,  a  question  as  to  inheritance  taxation 
may  be  raised  on  a  motion  to  exempt  the  estate  from 
taxation,  without  the  appointment  of  an  appraiser. 

Where  such  a  motion  is  made  on  the  ground  of  non- 
residence  the  surrogate  may  take  proofs  of  the  facts  or 
send  to  a  referee  although  the  moving  affidavits  are  uncon- 
tradicted. 

Matter  of  Hyde,  218  N.  Y.  55. 

Matter  of  Bishop,  111  App.  Div.  545 ;  97  Supp.  1098 ;  appeal  dismissed 
188  N.  Y.  635. 

But  where  an  appraiser  has  been  appointed  and  a  tax 
has  been  imposed  the  proper  remedy  is  by  appeal  and  not 
by  motion  to  exempt. 

Matter  of  Cowie,  49  App.  Div.  612;  63  Supp.  608_ 
Matter  of  Barnum,  129  App.  Div.  418;  114  Supp.  33. 
Matter  of  Lowry,  89  App.  Div.  226;  85  Supp.  924. 


428  INHERITANCE  TAXATION 

c.     ORDER  REMITTING  REPORT. 

After  hearing  upon  appeal  from  the  pro  forma  decree 
assessing  tax  the  surrogate,  acting  judicially,  makes  a 
second  order  affirming,  modifying  or  reversing  the  original 
order;  or  he  may  remit  the  whole  proceeding  back  to  the 
appraiser  for  further  testimony  or  for  proceedings  in 
accordance  with  the  surrogate's  view  of  the  law.  Upon 
such  an  order  the  appraiser  makes  a  second  or  supple- 
mental report  upon  which  a  second  taxing  order  is  entered 
and  from  which  a  second  appeal  lies  to  the  surrogate. 

As  an  example,  the  following  order,  remitting  the  report 
to  the  appraiser,  was  entered  in  the  Horler  case: 

Order  Remitting  Report  to  Appraiser. 

At  a  Surrogates'  Court  held  in  and  for  the 
County  of  New  York,  at  the  Hall  of 
Records  in  the  Borough  of  Manhattan,  on 
the  27th  day  of  December,  1916. 

Present  —  Hon.  ROBEKT  LUDLOW  FOWLER, 

Surrogate. 


In  the  Matter 

of 

The  Transfer  Tax  upon  the  Estate  of 
MARY  HORLER, 

Deceased. 


The  appeal  of  James  Horler,  individually  and  as 
executor  of  the  Last  Will  and  Testament  of  Mary  Horler, 
deceased,  from  the  appraisal  and  report  filed  herein  on 
May  22,  1916,  and  from  the  order  entered  herein  on  June 
6,  1916,  fixing,  assessing  and  determining  the  Transfer 
Tax  in  respect  to  the  property  of  the  said  testatrix  Mary 


FART  V  —  PBOCEDUUI:  429 

Horler,  having  duly  come  on  to  be  heard  and  having  been 
heard  by  me ; 

Now,  upon  the  facts  appearing  before  me,  and  after 
hearing  McReynolds  &  Hunter,  attorneys  for  James  Hor- 
ler, individually  and  as  executor,  and  Lafayette  B.  Gleason, 
Esq.,  attorney  for  the  Comptroller  of  the  State  of  New 
York;  and  due  deliberation  having  been  had  and  having 
filed  my  opinion  herein  on  November  27,  1916; 

IT    IS    ORDERED,    ADJUDGED   AND   DECREED,    that    the    interest 

which  passed  to  decedent's  husband  James  Horler  in  the 
real  estate  and  premises  No.  305  Hewes  Street,  Brooklyn 
Borough,  New  York  City,  by  virtue  of  the  conveyance 
made  by  her  on  November  5th,  1914,  and  which  included 
the  right  to  the  possession  of  the  said  real  estate  in  fee 
simple  in  the  event  of  his  surviving  the  decedent  is  not 
subject  to  a  tax  under  the  provisions  of  the  Transfer  Tax 
Law  of  the  State  of  New  York ;  and 

IT   IS   FURTHER   ORDERED,   ADJUDGED   AND   DECREED,   that  the 

right  of  James  Horler,  as  survivor  to  the  $11,500.00  of 
bonds  and  mortgages  which  he  and  the  decedent  held  as 
joint  tenants  at  the  time  of  her  death  under  the  instru- 
ments of  assignment  and  transfer  made  by  the  decedent 
during  October  and  November,  1914,  being  derived  from  a 
contract  made  and  entered  into  for  a  valuable  considera- 
tion, is  not  subject  to  a  tax  under  the  provisions  of  the 
Transfer  Tax  Law  of  the  State  of  New  York;  and 

IT  IS   FURTHER    ORDERED,   ADJUDGED  AND   DECREED,   that   the 

right  of  James  Horler,  as  survivor  to  the  $16,000.00  bond 
and  mortgage,  which  the  decedent  and  he  held  as  joint 
tenants  at  the  time  of  her  death  under  the  instrument  of 
assignment  and  transfer  made  by  him  on  November  5, 
1914,  to  the  decedent,  being  derived  from  a  contract  made 
and  entered  into  for  a  valuable  consideration,  is  not 


430  INHERITANCE  TAXATION 

subject  to  a  tax  under  the  provisions  of  the  Transfer  Tax 
Law  of  the  State  of  New  York ;  and 

IT  IS   FURTHER   ORDERED,   ADJUDGED   AND   DECREED,   that   the 

bank  accounts  which  were  held  in  the  Irving  Savings 
Institution  and  in  the  Emigrants '  Industrial  Savings  Bank 
in  the  joint  names  of  decedent  and  her  husband  James 
Horler  at  the  time  of  her  death  and  which  were  so  held  in 
their  joint  names  prior  to  the  enactment  of  Chapter  664 
of  the  Laws  of  1915  did  not  constitute  any  part  of  the 
estate  of  decedent  subject  to  the  provisions  of  the  Trans- 
fer Tax  Law,  and  the  right  of  James  Horler  to  the  said 
bank  accounts  as  survivor,  is  not  subject  to  a  tax  under  the 
Transfer  Tax  Law  of  the  State  of  New  York;  and 

IT   IS   FURTHER   ORDERED,   ADJUDGED  AND   DECREED,    that    the 

order  entered  herein  on  June  6,  1916,  fixing,  assessing  and 
determining  a  transfer  tax  in  respect  to  the  property  of 
the  decedent  Mary  Horler,  be  and  the  same  hereby  is  in 
all  respects  reversed;  and 

IT   IS   FURTHER   ORDERED,    ADJUDGED   AND   DECREED,    that   the 

Appraiser's  report,  filed  herein  on  May  22,  1916,  and  upon 
which  said  order  of  June  6,  1916,  was  made,  be  and  the 
same  hereby  is  remitted  to  the  said  Appraiser  for  correc- 
tion in  the  manner  indicated  in  the  opinion  filed  herein  on 
November  27,  1916. 

EGBERT  LUDLOW  FOWLER, 

Surrogate. 

d.     SUPPLEMENTAL  REPORT  OF  APPRAISER. 

Upon  the  order  remitting  the  original  report,  the 
appraiser  makes  a  supplemental  report,  of  which  the  fol- 
lowing is  an  example : 


PART  V  —  PROCEDURE  431 

Supplemental  Report  of  Appraiser. 
SURROGATE'S  COURT, 

NEW  YORK  COUNTY. 


In  the  Matter 

of 

The  Appraisal,  under  the  Transfer  Tax 
Law,  of  the  Estate  of  MARY  HORLER, 
Deceased. 

I,  John  J.  Lyons,  having  been  duly  designated  to 
appraise  the  estate  of  the  above  named  decedent,  having 
made  and  filed  my  report  herein  on  the  22nd  day  of  May, 
1916,  and  an  order  having  subsequently  been  entered 
remitting  said  report  to  me  for  the  purpose  of  correction 
in  the  manner  indicated  in  the  opinion  filed  herein  on 
November  27,  1916,  by  Hon.  Robert  Ludlow  Fowler,  Sur- 
rogate, New  York  County,  do  hereby  submit  this  as  a 
supplemental  and  amended  report: 

First. —  Paragraph  First  of  the  original  report  is  con- 
firmed. 

Second. —  I  further  report  the  following  appearances: 
Lafayette  B.  Gleason,  Esq.,  attorney  for  State  Comp- 
troller ;  McReynolds  &  Hunter,  Esqs.,  attorneys  for  Execu- 
tor, 80  Maiden  Lane,  New  York  City. 

Third. —  Paragraph  Fifth  of  the  original  report  as 
amended  in  the  following  particulars : 

Schedule  Al,  real  estate,  premises  known  as  305  Hewes 
Street,  Brooklyn,  Kings  County,  New  York,  assessed  at 
$6,300,  valued  at  $6,500,  held  by  decedent  and  her  husband, 
James  Horler  as  joint  tenants.  Original  report  taxed  half, 
$3,250.  Amended  to  read  "  Exempt." 

Schedule  A2  recited  two  bank  accounts,  aggregating  with 
interest,  $6,016,  held  in  joint  accounts,  payable  to  either  or 
the  survivor,  by  this  decedent  and  her  husband,  James 
Horler.  Original  report  taxed  in  full,  $6,016.  Amended 
to  read  "  Exempt." 


432  INHERITANCE  TAXATION 

Schedule  A3  recited  items  of  personal  property,  jewelry, 
etc.,  valued  at  $325  and  mortgages,  held  jointly  by  this 
decedent  and  her  husband,  James  Horler,  aggregating, 
with  accrued  interest,  $28,124.63.  These  mortgages,  taxed 
in  original  report  in  full,  should  be  reported  as  * '  Exempt. ' ' 
Total  assets  under  paragraph  Fifth  should  therefore  be 
amended  to  $325,  and  deductions  of  $500  confirmed,  and  net 
estate  therefore  shows  "  Deficit." 

Fourth. —  Paragraph  Sixth  should  therefore  be  amended 
to  read  as  follows:    "As  no  beneficiary  is  to  receive  an 
amount  equal  to  or  exceeding  the  amount  of  the  statutory 
exemption,  I  find  no  tax  to  accrue  in  this  proceeding." 
Respectfully  submitted, 

JOHN  J.  LYONS,    Appraiser. 
Bated,  New  York  City,  N.  Y.,  March  20,  1917. 
e.     SECOND  TAXING  ORDER. 

Upon  the  supplemental  report  of  the  appraiser  a  second 
taxing  order  is  entered.  In  the  illustrative  case,  under  the 
surrogate 's  views  of  the  law,  the  entire  estate  was  exempt. 
The  order  upon  the  supplemental  report  was,  accordingly, 
as  follows: 

Order  on  Supplemental  Report. 
A!  a  Surrogates'  Court  held  in  and  for  the 
County    of    New    York,    at    the    Hall    of 
Records    in    the    Borough    of    Manhattan, 
City  of  New  York,  on  the  4th  day  of  April, 
1917. 
Present  —  Hon.   ROBERT  LUDLOW   FOWLER,   Surrogate. 

In  the  Matter 

of 

An  Application  to  adjust  the  Transfer 
Tax  upon  the  Estate  of  MARY  HORLER, 
Deceased. 

On  reading  the  supplemental  report  of  John  J.  Lyons, 
Esq.,  the  appraiser,  filed  herein  on  the  17th  day  of  March, 


PART  V  —  PROCEDURE  433 

1917,  wherein  it  appears  that  the  said  decedent  died  on  the 
twenty-fourth  day  of  July,  115,  and  on  motion  of  McRey- 
nolds  &  Hunter,  attorneys  for  the  Executor  herein,  it  is 
ORDERED  AND  ADJUDGED  that  the  transfer  of  the  property 
of  which  said  decedent  died  seized  and  possessed,  and 
referred  to  in  said  report,  is  exempt  from  tax  under  the 
act  in  relation  to  taxable  transfers  of  property. 

ROBERT  LUDLOW  FOWLER,  Surrogate. 

f.     NOTICE  OF  APPEAL  FROM  SECOND  TAXING  ORDER. 

From  the  second  taxing  order,  in  the  illustrative  case, 
the  comptroller  appealed  to  the  surrogate,  stating  the 
grounds  of  his  appeal  as  follows : 

Notice  of  Appeal  to  the  Surrogate  by  Comptroller. 

SURROGATE'S  COURT, 
NEW  YORK  COUNTY. 

In  the  Matter 

of 

The  Transfer  Tax  upon  the  Estate  of 
MARY  HORLER, 

Deceased. 


SIRS: 

PLEASE  TAKE  NOTICE  that  the  Comptroller  of  the  State  of 
New  York  is  dissatisfied  with  the  appraisal  herein  of  the 
property  of  the  above  named  decedent  as  made  and  set 
forth  in  the  report  of  the  appraiser,  filed  herein  on  the  17th 
day  of  March,  1917,  and  with  the  order  fixing  and  assessing 
the  transfer  tax  in  respect  to  the  transfer  of  the  property 
of  said  decedent,  made  and  entered  herein  on  the  4th  day 
of  April,  1917,  and  hereby  appeals  to  the  Surrogate  from 
the  said  appraisal  and  from  the  said  order  assessing  tax 
as  aforesaid,  on  the  ground  that  the  same  failed  to  tax 
certain  real  estate  valued  at  $6,500  held  by  decedent  and 
her  husband  as  joint  tenants,  and  two  bank  accounts 
amounting  to  $6,016,  standing  in  the  name  of  decedent  and 


434  INHERITANCE  TAXATION 

her  husband,  and  certain  personal  property  and  mortgages 
held  jointly  by  decedent  and  her  husband. 
Dated,  New  York,  April  6, 1917. 

Yours,  etc., 

LAFAYETTE  B.  GLEASON, 
Attorney  for  State  Comptroller, 
Office  and  P.   0.   Address,   233 
Broadway,  Borough  of  Man- 
hattan, New  York  City. 
To: 

MESSES.  McREYNOLDs  &  HUNTER, 
Attorneys  for  Executor, 

86  Maiden  Lane,  New  York  City. 
DANIEL  J.  DOWDNEY,  ESQ., 

Clerk  of  Surrogate's  Court. 

g.     TAXING  ORDER  UPON  SECOND  APPEAL. 

If  any  portion  of  the  estate  in  the  Horler  case  was  tax- 
able a  second  order  fixing  tax,  in  the  same  form  as  the 
original  order,  would  have  been  entered.  As  the  whole 
estate  was  exempt,  under  the  court's  ruling,  the  following 
order  was  entered : 

At  a  term  of  the  Surrogates'  Court  held  in  and 
for  the  County  of  New  York  at  the  Hall  of 
Eecords,  Borough  of  Manhattan,  New  York 
City,  on  the  24th  day  of  April,  1917. 

Present  Hon.  ROBERT  LUDLOW  FOWLER,  Surrogate. 

In  the  Matter 

of 

The  Transfer   Tax  upon  the  Estate  of 
MARY  HORLER, 

Deceased. 

James  Horler,  individually  and  as  Executor  under  the 
Will  of  the  above  named  decedent,  having  appealed  from 
the  report  of  the  appraiser  duly  filed  herein  on  the  22d  day 


PART  V  —  PROCEDURE  435 

of  May,  1916,  and  the  order  fixing  tax  thereon  on  the  6th 
day  of  June,  1916,  and  on  the  hearing  of  said  appeal  the 
Surrogate  having  reversed  the  order  fixing  tax  and 
remitted  the  matter  to  the  appraiser,  and  a  new  appraise- 
ment having  been  had  and  filed  herein  on  the  17th  day 
of  March,  1917,  and  an  order  having  been  entered  thereon 
on  the  4th  day  of  April,  1917,  and  the  Comptroller  having 
appealed  from  said  last  named  order  and  report  of  the 
appraiser  to  the  Surrogate  on  the  ground  set  forth  in  said 
Notice  of  Appeal. 

Now,  after  hearing  Messrs.  McReynolds  &  Hunter,  attor- 
neys for  James  Horler  as  Executor,  and  due  deliberation 
having  been  had  it  is 

ORDERED  that  the  said  appeal  of  the  Comptroller  of  the 
State  of  New  York  is  hereby  denied,  and  the  order  fixing 
tax  entered  herein  on  the  4th  day  of  April,  1917,  be  and  the 
same  hereby  is  in  all  respects  affirmed. 

ROBERT  LUDLOW  FOWLER,     Surrogate. 

h.     NOTICE  OF  APPEAL  TO  APPELLATE  DIVISION. 

From  the  order  thus  entered  the  comptroller  appealed 
to  the  Appellate  Division,  which  appeal  is  now  pending. 
The  notice  of  appeal  was  as  follows: 

Notice  of  Appeal  to  the  Appellate  Division. 
SURROGATE'S  COURT, 

NEW  YORK  COUNTY. 


In  the  Matter 

of 

The  Transfer  Tax  upon  the  Estate  of 
MARY  HORLER, 

Deceased. 


SIRS: 

PLEASE  TAKE  NOTICE  that  the  Comptroller  of  the  State  of 
New  York"  hereby  appeals  to  the  Appellate  Division  of 


436  INHERITANCE  TAXATION 

the  Supreme  Court  for  the  First  Judicial  Department  from 
the  orders  of  this  Court  dated  December  27th,  1916, 
reversing  the  order  fixing  tax  and  remitting  the  report  to 
the  appraiser,  the  order  of  exemption  on  the  supplemental 
report  made  and  entered  on  the  4th  day  of  April,  1917, 
and  from  the  order  denying  the  appeal  of  the  Comptroller 
made  and  entered  on  the  24th  day  of  April,  1917,  and  from 
each  and  every  part  of  said  orders. 
Dated,  New  .York,  May  4th,  1917. 

Yours,  &c., 

LAFAYETTE  B.  GLEASON, 
Attorney  for  State  Comptroller, 

Appellant, 

Office  and  P.  0.  Address,  Wool- 
worth  Building,  Borough  of 
Manhattan,  New  York  City. 

To: 

DANIEL  J.  DOWDNEY,  ESQ., 

Clerk  of  the  Surrogates'  Court, 

New  York  County. 
McKEYNOLDs  &  HUNTER,  Esqs., 
Attorneys  for  Executor, 
80  Maiden  Lane, 
New  York  City. 

5.  Before  the  Appellate  Courts. 

From  the  determination  of  the  probate  court  an  appeal 
lies  in  all  jurisdictions  to  the  appellate  courts  following 
generally  the  practice  on  appeals  from  all  decrees  and 
orders  of  the  court  of  probate. 

a.    WHO  MAY  APPEAL. 

Some  question  arises  as  to  how  far  an  executor  may 
litigate  a  question  over  the  amount  of  inheritance  taxes 


PART  V  —  PROCEDURE  437 

in  which  he  is  interested  only  to  the  extent  of  his  personal 
liability. 

So  when  the  question  as  to  taxation  was  submitted  to 
the  Appellate  Division  on  an  agreed  state  of  facts  and 
the  executors  only  appealed  while  all  other  parties 
acquiesced,  it  was  held  that  the  executor  did  not  have  an 
appealable  interest. 

Isham  v.  N.  T.  Assn.  for  the  Poor,  177  N.  Y.  218;  69  N.  E.  367. 

So  it  was  held  in  Pennsylvania  that  the  executors  were 
not  interested  in  the  question  whether  a  tax  was  presently 
due  and  payable.  The  court  said : 

"  The  further  question  argued,  whether  the  tax  is  now 
due  and  payable,  is  not  raised  by  this  record.  The  appeal 
is  by  the  executors  and  trustees  and  it  does  not  appear  that 
they  have  any  interest  in  the  question.  The  executors  are 
nowhere  made  chargeable  with  the  tax  until  distribution." 
Handlers  Estate,  181  Pa.  St.  339,  347;  37  A.  587. 

On  the  other  hand,  it  was  held  in  Illinois,  that  where  a 
trustee,  who  in  good  faith  believes  that  an  inheritance  tax 
has  been  assessed  illegally  or  in  an  improper  amount,  may 
appeal  from  the  judgment  not  only  to  preserve  the  rights 
of  the  beneficiaries  but  to  protect  himself  from  personal 
liability  in  case  he  should  pay  a  claim  that  might  after- 
wards be  adjudged  illegal. 

People  v.  Northern  Trust  Co.,  266  111.  139;  107  N.  E.  100. 

An  executor  always  has  the  right  to  appeal  to  the  sur- 
rogate from  the  pro  forma  order  fixing  tax. 

Matter  of  Cornell,  66  App.  Div.  167,  171;  73  Supp.  32,  modified  170 
N.  Y.  423;  63  N.  E.  445. 

On  the  one  hand  it  is  not  just  that  the  entire  estate 
should  be  put  to  an  expense  in  opposing  the  tax  against 
a  single  beneficiary.  On  the  other,  the  executor  usually 
represents  all  beneficiaries  before  the  appraiser  and  the 


438  INHERITANCE  TAXATION 

surrogate.  In  a  recent  case  the  executor  was  interested 
both  individually  and  as  executor  and  appealed  only  in 
the  second  capacity.  The  Appellate  Division,  in  sustain- 
ing the  appeal,  said: 

"  It  is  also  urged  by  the  respondent  that  the  appellant 
as  executrix  is  not  aggrieved  by  the  order  assessing  a 
transfer  tax  and  hence  her  appeal  raises  no  question.  The 
notice  of  appeal  does  not,  necessarily,  purport  to  be  an 
appeal  by  the  executrix.  The  use  of  the  word  executrix,  it 
might  be  urged  is  merely  descriptive,  but  assuming  that 
the  appeal  is  taken  by  her  as  executrix,  we  think  she  had  a 
right  to  appeal.  In  Matter  of  Cornell  (66  App.  Div.  167; 
73  Supp.  32)  it  was  held  that  '  the  executor  as  such  is 
entitled  to  appeal  from  an  order  and  decree  fixing  a  trans- 
fer tax.  He  is  made  personally  liable  for  the  tax  and  is  a 
party  aggrieved  within  the  meaning  of  the  provisions  of 
the  Code  of  Civil  Procedure  relating  to  appeals.'  The 
Court  of  Appeals  modified  the  order  of  the  Appellate 
Division  (170  N.  Y.  423;  63  N.  E.  445)  and  in  doing  so  I 
think  necessarily  held  that  the  appeal  was  properly  taken 
by  the  executor. 

"  But  independent  of  authority  it  must  be  -that  an 
executor  of  an  estate  against  which  a  transfer  tax  has 
been  imposed  has  such  an  interest  therein  as  entitles  him 
to  have  an  order  imposing  the  tax  reviewed  on  appeal." 

Matter  of  Dalsimer,  167  -App.  Div.  365;  153  Supp.  58;  aff.  217  N.  Y. 
608. 

The  true  rule  probably  is  that  an  executor  can  appeal 
only  in  so  far  as  he  protects  himself  from  his  personal 
liability;  and,  beyond  that,  the  expense  of  the  litigation 
should  be  borne  by  those  directly  interested. 

In  New  York  a  foreign  executor  is  held  to  have  the  right 
to  appeal  on  the  theory  of  his  personal  liability. 

Matter  of  Cornell,  66  App.  Div.  167,  171;  73  Supp.  32,  modified  170 
N.  Y.  423. 


PART  V  —  PROCEDURE  439 

b.     ORDER  APPEALED  FROM. 

In  a  recent  case  it  was  contended  by  the  attorney  for  the 
estate  before  the  Appellate  Division  that  the  notice  of 
appeal  should  be  not  only  from  the  order  of  the  surrogate 
upon  appeal  to  him  from  the  pro  forma  order  fixing 
the  tax  but  from  all  the  intermediate  orders,  including 
an  order  remitting  the  report  to  the  appraiser;  but  the 
point  was  ignored4,  and  the  established  practice  of  appeal- 
ing only  from  the  order  of  the  surrogate  upon  appeal  to 
him  in  his  judicial  capacity  was  tacitly  approved*. 

Matter  of  Hernandez,  172  App.  Div.  467;  159   Supp.  59-;  .aff.  219 
N.  Y.  24. 

Where,  after  an  appeal  from  a  surrogate 's  decree  in  a 
transfer  tax  proceeding,  the  matter  is  remitted  to  the 
appraiser  and  the  surrogate  makes  the  usual  order  fixing 
the  cash  value  of  the  property  transferred  and*  the  amount 
of  the  taxes,  no  appeal  lies  from  his  order  as  a  taxing 
officer  directly  to  the  Appellate  Division. 
Matter  of  Victor,  160  App.  Div.  32;  144  Supp.  918. 

The  surrogate  acts  merely  as  assessor  in  determining 
the  tax.  When  he  acts  judicially  and  makes  an  order  on 
appeal  from  the  taxing  order  there  is  no  second  appeal  to 
the  surrogate  but  direct  to  the  Appellate  Division. 

Hatter  of  Steinwender,  172  App.  Div:  871;  158  Supp.  779;  aff.  121 
N.  Y.  mem. 

Where  the  notice  of  appeal  states  that  it  is  from  the 
order  of  January  24,  1903,  as  resettled  by  ordsr  of  March 
24, 1903,  the  resettled  order  is  the  one  appealed  from. 
Matter  of  Post,  85  App.  Div.  611;  82  Supp.  10.79. 

./ 

And   the    discretion   of   the    surrogate   in   refusing   to 
resettle  an  order  is  not  reviewable  on  appeal. 
Matter  of  Sondheim,  69- App.  Div.  5;  74  Supp.  510. 

When  the  Court  of  Appeals  has  directed  the  modifica- 
tion of  a  surrogate's  taxing  order  fixing  a  transfer  tax,  a 


440  INHERITANCE  TAXATION 

party  to  that  appeal  cannot  thereafter  raise  de  novo  .any  of 
the  questions  which  were  determined  or  which  might  have 
been  determined,  by  a  second  appeal  taken  within  sixty 
days  from  the  entry  of  the  taxing  order  by  the  surrogate. 

Matter  of  Cook,  125  App.  Div.  114;  109  Supp.  417;  af£.  194  N.  Y. 
400;  87  N.  E.  786. 

"  When  we  keep  in  mind  the  fact  that  the  surrogate  is 
a  mere  taxing  officer  or  assessor,  when  acting  under  §  231, 
no  incongruity  is  presented  although  it  is  somewhat 
unusual  that  a  judicial  officer  should  sit  in  review  of  his 
own  decision  as  an  assessor.  It  is,  however,  to  be  said  that 
on  an  appeal  to  the  surrogate,  acting  judicially,  a  complete 
record  is  submitted  and  both  sides  are  heard.  We  are  of 
opinion  that  the  Appellate  Division  properly  dismissed  the 
comptroller's  appeal  from  the  order  of  the  surrogate  made 
when  acting  as  a  taxing  officer. " 

Matter*  of  Costello,  189  N.  Y.  288;  82  N.  E.  139. 

c.     SERVICE  OF  NOTICE  OF  APPEAL. 

Failure  to  file  the  notice  of  appeal  in  the  office  of  the 
surrogate,  within  the  time  prescribed  by  this  section,  is 
not  excused  by  an  admission  by  the  attorney  for  the  state 
comptroller  of  service  of  a  notice  of  appeal. 

A  court  or  judge  cannot  extend  the  time  within  which  an 
appeal  must  be  taken  (Code  Civ.  Pro.,  §  784). 
Matter  of  Seymour,  144  App.  Div.  151;  128  Supp.  775. 

An  appeal  must  be  taken  within  thirty  days  after  service 
upon  the  attorney  for  the  appellant  of  a  copy  of  the  judg- 
ment or  order  appealed  from,  and  a  written  notice  of  the 
entry  thereof.  The  period  of  limitation  does  not  begin 
to  run  until  the  prevailing  party  serves  the  necessary 
notice  upon  the  attorney  for  the  other  side,  and  the  serv- 
ice of  the  other  papers  and  even  the  written  admission  of 
such  papers  signed  by  the  other  attorney  do  not  start  the 
time  of  limitation  running. 

McGruer  v.  Abbott,  47  App.  Div.  191;  62  Supp.  123. 


PART  V  —  PBOCEDURE  441 

d.  PAPERS  ON  APPEAL. 

These  must  include  all  that  were  acted  upon  by  the  sur- 
rogate, including  the  will. 

Astor  v.  State,  25  N.  J.  Eq.  303;  72  A.  78. 

And  the  rules  require  a  certificate  to  this  effect  from  the 
clerk  of  the  Surrogate's  Court  but  this  is  usually  waived 
and  immaterial  papers  eliminated  by  stipulation;  the  fol- 
lowing being  the  customary  form: 

Stipulation  Waiving  Certification. 

Pursuant  to  Section  3301  of  the  Code  of  Civil  Procedure, 

it  is  hereby  stipulated  that  the  papers  as  hereinbefore 

printed  consist  of  true  and  correct  copies  of  the  notice  of 

appeal,  the  order  appealed  from,  and  all  the  papers  upon 

which  the  court  below  acted  in  making  the  orders  appealed 

from  and  the  whole  thereof,  now  on  file  in  the  office  of  the 

Clerk  of  the  Surrogate 's  Court  of  the  county  of  New  York. 

Certification  thereof  in  pursuance  of  Section  1353  of  the 

Code  of  Civil  Procedure  is  hereby  waived. 

Dated,  New  York,  May  23,  1917. 

LAFAYETTE  B.  GLEASON, 
Attorney  for  State  Comptroller. 

MCEEYNOLDS  &  HUNTER, 
Attorneys  for  the  Executor. 

e.  COSTS. 

In  New  York  costs  are  not  allowed  on  appeal  to  the  sur- 
rogate from  pro  forma  taxing  orders.  L.  1908,  Ch.  310. 

Prior  to  that  statute  costs  were  in  the  discretion  of  the 
surrogate. 

Matter  of  Eaton,  55  Misc.  472;  106  Supp.  682. 

On  proceedings  to  collect  by  .the  district  attorney  costs 
are  still  in  the  surrogate's  discretion  and  will  be  imposed 
against  the  state  where  the  proceedings  were  unjustifi- 
able. 

Matter  of  Brady,  N.  Y.  L.  J.,  Feb.  5, 1913. 


442  INHERITANCE  TAXATION 

The  Appellate  Division  when  reversing  an  order  deny- 
ing an  application,  the  granting  of  which  was  not  opposed 
by  the  party  against  whom  it  was  made,  will  not  award 
costs  of  the  appeal  against  such  party. 

Matter  of  Collins,  104  App.  Div.  184;  93  Supp.  342. 

Where  a  final  order  assessing  a  transfer  tax  upon  a 
trust  fund  which  came  into  the  possession  of  the  trustees 
after  decedent's  death  is  reversed  by  the  Appellate  Divi- 
sion, the  only  costs  which  can  be  allowed  to  appellant  are 
the  costs  of  the  appeal,  viz.:  $20  before  argument  and 
$40  for  argument,  besides  disbursements. 
Matter  of  Wright,  89  Misc.  108 ;  151  Supp.  378. 

A  bill  of  costs  in  the  Court  of  Appeals  may  be  awarded 
to  each  respondent  represented  by  separate  counsel. 
Matter  of  Gibson,  157  N.  Y.  680. 

And  the  state  comptroller  may  tax  a  bill  of  costs  against 
each  of  two  unsuccessful  appellants  where  so  represented. 
Matter  of  Sounders,  86  Misc.  582;  149  Supp.  461. 

f.     APPEALS  TO  COURT  OF  APPEALS. 

By  a  recent  amendment  these  can  only  be  taken  where 
there  is  a  reversal  by  the  Appellate  Division,  or  the 
decision  is  not  unanimous,  unless  leave  to  appeal  is  granted 
on  motion  by  the  court  below  and  if  denied  by  that  court, 
on  motion  to  the  Court  of  Appeals.  The  amendment  took 
effect  June  1, 1917. 

Such  appeals  are  limited  to  questions  of  law. 

Matter  of  Thome,  162  N.  Y.  238. 

And  must  be  from  a  final  order. 

Matter  of  Browne,  195  N.  Y.  522;  88  N.  E.  1115. 
Matter  of  Vivianti,  204  N.  Y.  513. 

A  certification  of  a  question  by  the  Appellate  Division 
will  not  be  reviewed  if  it  involves  a  question  of  fact. 
Matter  of  Martin,  219  N.  Y.  557, 114  N.  E.  1071. 


PART  V  —  PROCEDURE  443 

Where  the  surrogate  is  reversed  and  the  order  of  the 
Appellate  Division  is  silent  on  the  question  it  will  be  pre- 
sumed by  the  Court  of  Appeals  that  the  reversal  was  on 
questions  of  law  only. 

Hatter  of  Keefe,  164  N.  Y.  352. 

g.     To  SUPREME  COURT  or  THE  UNITED  STATES. 

The  record  must  show  that  a  Federal  question  is 
involved  and  that  it  was  brought  to  the  attention  of  the 
state  court. 

Sec.  709  U.  S.  Revised  Statutes. 

Matter  of  Stickney,  185  N.  Y.  107;  77  N.  E.  993,  writ  of  error  dis- 
missed, sub.  nom.;  Stickney  v.  Kelsey,  209  U.  S.  419;  28  S.  Ct.  Rep. 
508. 

Matter  of  Houdayer,  150  N.  Y.  37;  44  N.  E.  718,  writ  of  error  dis- 
missed sub  nom.,  Scudder  v.  Comptroller,  175  U.  S.  32;  20  S.  Ct. 
Rep.  26. 

"  When  no  such  ground  has  been  presented  to  or  con- 
sidered by  the  courts  of  the  state,  it  cannot  be  said  that 
those  courts  have  disregarded  the  Constitution  of  the 
United  States,  and  this  court  has  no  jurisdiction." 

Scudder  v.  Comptroller  of  New  York,  175  U.  S.  32-36;  20  S.  Ct.  Rep. 
26. 

Where  judicial  proceedings  in  one  state  are  relied  upon 
as  a  defense  to  an  assessment  by  the  authorities  of  another 
state,  a  right  under  the  Constitution  of  the  United  States 
is  specially  set  up  and  claimed,  though  it  was  not  in  terms 
stated  to  be  such  a  right. 

Tilt  v.  Kelsey,  207  U.  S.  43;  28  S.  Ct.  Rep.  1. 

Where  the  best  that  can  be  said  for  the  plaintiffs  in  error 
is  that  the  action  of  the  state  court  was  ambiguous,  the 
United  States  Supreme  Court  will  resolve  the  ambiguity 
against  the  parties  complaining,  who  are  bound  to  show 
clearly  that  a  Federal  right  was  impaired,  rather  than 
endeavor  to  spell  out  a  Federal  question  to  aid  a  defense 
which  is  merely  technical  and  destitute  of  substantial 
merit. 

Stickney  v.  Kelsey,  209  U.  S.  419;  28  S.  Ct.  Rep.  508. 


444  INHERITANCE  TAXATION 

D.—  SUBSEQUENT  PROCEEDINGS. 

1.  Motions  to  Modify  Decree. 

It  frequently  happens  that  beneficiaries  discover  some 
reason  why  they  think  the  tax  should  not  be  paid  after  the 
time  to  appeal  from  the  taxing  order  has  expired.  The  only 
remedy  is  by  motion  to  modify  or  vacate  the  taxing  order. 
Such  motions  must  be  on  notice  to  the  Comptroller.  They 
cannot  be  entertained  ex  parte. 
Matter  of  Fulton,  30  Misc.  70. 

a.     WHERE  THERE  WAS  A  MISTAKE  OF  FACT. 

This  may  be  corrected  on  motion  and  where  there  is  no 
dispute  and  the  mistake  is  obvious  the  surrogate  may 
correct  it  without  sending  the  matter  back  to  an  appraiser. 

Matter  of  Cameron,  97  App.  Div.  436;  89  Supp.  977;  aff.  181  N.  Y. 
560;  74  N.  E.  1115. 

Where    the    surrogate    has    by    order    confirmed    the 
appraiser's  report  without  noticing  that  it  is  defective, 
he  has  authority  to  vacate  his  order  of  confirmation  and 
send  the  report  back  to  the  appraiser  for  correction. 
Matter  of  Earle,  74  App.  Div.  458 ;  77  Supp.  503. 

A  mistake  in  an  administrator's  affidavit  whereby  stock 
worth  $14,193   was   appraised  at  $47,310  was   corrected 
though  the  two-year  limitation  had  elapsed. 
Matter  of  Boyle,  92  Mise.  143;  156  Supp.  173. 

Where  a  debt  had  been  inadvertently  overlooked  the 
deduction  was  allowed  on  motion  and  the  order  modified 
by  reducing  the  tax  proportionately. 
Matter  of  Campbell,  50  Misc.  485. 

Where  the  executor  believed  that  notes  would  be  paid  by 
the  makers  at  the  time  of  the  appraisal,  but  they  proved 
worthless,  decree  modified. 

Matter  of  Sherar,  25  Misc.  138;  54  Supp.  930. 


PART  V  -  -  PROCEDURE  445 

Where  the  appraiser  misconstrued  a  will  and  a  bene- 
ficiary paid  tax  on  property  which  proved  afterwards  not 
to  belong  to  him, —  held  a  mistake  of  fact  and  tax  refunded. 

Matter  of  Willets,  119  A.  D.  119;  100  Supp.  850;  104  Supp.  1150; 
aff.  190  N.  Y.  527;  83  N.  E.  1134. 

So,  where  a  mathematical  mistake  was  made  in  com- 
puting the  tax. 

Matter  of  Scott,  208  N.  Y.  602. 

And  generally,  clerical  errors  are  cured  on  such  motions. 
Matter  of  Henderson,  157  N.  Y.  423;  52  N.  E.  183. 

b.     WHERE  THERE  WAS  LACK  OF  JURISDICTION. 

Such  motions  are  granted  where  the  moving  papers  show 
that  the  appraiser  lacked  jurisdiction  as  when  both  parties 
mistakenly  supposed  that  the  estate  was,  under  the  law, 
subject  to  a  transfer  tax. 

Matter  of  Scrimgeour,  175  N.  Y.  507 ;  67  N.  E.  1089. 

Or  where  the  tax  has  been  paid  under  an  unconstitutional 
statute. 

Matter  of  O'Berry,  91  App.  Div.  3;  86  Supp.  269;  aff.  179  N.  Y.  285; 

72  N.  E.  109. 

Norton  v.  Selby  County,  118  U.  S.  425;  6  S.  Ct.  Rep.  1121. 
Aetna  Insurance  Co.  v.  Mayor,  153  N.  Y.  331;  47  N.  E.  593. 

Although  the  transfer  tax  has  been  levied,  the  surrogate 
has  power  to  modify  his  decree,  when  the  remaindermen, 
who  failed  to  appear  on  the  appraisal  were  only  notified 
that  their  father's  estate  would  be  appraised,  and  the 
appraisal  included  property  belonging  to  a  trust  fund  over 
which  the  father  exercised  an  appointment  in  favor  of  such 
remaindermen. 

Matter  of  Backhouse,  110  App.  Div.  737;  96  Supp.  466;  aff.  185 
N.  Y.  545;  77  N.  E.  1181. 

A  surrogate  has  power  on  a  motion  to  vacate  so  much  of 
a  decree  assessing  property  subject  to  a  transfer  tax  as 


446  INHERITANCE  TAXATION 

was  made  without  jurisdiction  after  the  time  to  appeal 
from  said  order  has  expired. 

Matter  of  Jones,  54  Misc.  202;  105  Supp.  932. 

Matter  of  Silliman,  79  App.  Div.  98;  80  Supp.  336;  aff.  175  N.  Y. 
513;  67  N.  E.  1090. 

So  where  the  appraiser  taxed  property  passing  under  a 
power  of  appointment  and  the  heirs  were  held  to  receive 
it  from  an  ancestor  and  not  under  the  power;  the  time  to 
appeal  had  long  expired  and  the  motion  to  modify  was 
granted  six  years  later. 

The  court  said : 

"  In  making  the  motion  to  modify  the  order,  and  on  the 
appeal,  the  executor  contended  that  both  the  tax  appraiser 
and  the  surrogate  were  without  jurisdiction  to  impose  a 
tax  on  these  interests,  inasmuch  as  there  was  no  question 
of  fact  involved,  and  on  the  uncontroverted  facts  as  matter 
of  law  the  children  took  nothing  so  far  as  these  interests 
are  concerned  from  the  testatrix.  The  children  of  the 
testatrix  are,  of  course,  concluded  by  the  determination  of 
the  tax  appraiser  as  confirmed  by  the  surrogate,  with 
respect  to  the  value  and  the  tax  on  any  property  they  took 
by  virtue  of  their  mother's  will,  but  not  so,  we  think,  with 
respect  to  any  of  the  three  interests  in  question  which  they 
did  not  take  under  her  will.  It  has  been  held  with  respect 
to  property  passing  under  a  will,  which  is  not  subject  to 
the  transfer  tax,  that  there  is  no  jurisdiction  to  impose  the 
tax,  and  that  it  should  be  refunded  after  having  been 
paid." 

Matter  of  Coogan,  27  Misc.  563;  59  Supp.  Ill;  aff.  45  App.  Div. 

628;  61  Supp.  1144;  162  N.  Y.  613;  57  N.  E.  1107. 
Matter  of  Morgan,  164  App.  Div.  854;  149  Supp.  1022  j  aff.  215 

N.  Y.  mem. 

c.    MAY  NOT  CORRECT  AN  ERROR  OF  LAW. 

An  error  of  law  can  be  corrected  by  appeal  only. 
Matter  of  Niven,  29  Misc.  550;  61  Supp.  956. 


PART  V  —  PROCEDURE  447 

A  decree  of  the  surrogate  cannot  be  opened  to  correct  an 
error  of  law  made  in  calculating  executors'  commissions, 
and  the  remedy  is  by  an  appeal  from  the  decree.  If  the 
surrogate  erred  in  allowing  the  commissions  objected  to, 
the  error  was  one  of  law  and  not  a  clerical  mistake. 
Matter  of  Monteith,  27  Misc.  163;  58  Supp.  379. 

A  debt  overlooked  at  the  time  of  the  appraisal  was  held 
not  sufficient  ground  in  Matter  of  Hamilton,  41  Misc.  268; 
84  Supp.  44 ;  but  such  relief  is  usually  granted. 

And  where  the  application  is  based  on  the  proposition 
that  the  appraisal  was  too  high  after  the  time  to  appeal 
has  expired  the  motion  is  to  correct  an  error  of  law  and  not 
a  mistake  of  fact  and  is  invariably  denied. 

Matter  of  Van  Nest,  N.  Y.  Law  Journal,  November  8,  1913 ;  aff.  168 

App.  Div.  mem. 
Matter  of  Wallace,  28  Misc.  603;  59  Supp.  1084. 

When  the  moving  affidavits  merely  stated  that  the  assets 
had  been  overvalued  supported  only  by  appraisal  of  real 
estate  brokers  at  a  much  lower  figure,  application  denied. 
Matter  of  Barnum,  129  App.  Div.  418;  114  Supp.  33. 

The  same  rule  applied  against  the  state  where  under- 
valuation claimed  without  facts  to  support  the  assertion. 

Matter  of  Johnson,  37  Misc.  542 ;  75  Supp.  1046. 

When  the  moving  papers  disclosed  no  other  ground  than 
the  sale  of  real  estate  at  a  lower  figure  the  surrogate  has 
no  power  to  modify  the  decree  assessing  tax. 
Matter  of  Lowrij,  89  App.  Div.  226 ;  85  Supp.  924. 

The  same  rule  is  applied  against  the  state:  The  mere 
fact  that  assets  have  since  sold  for  a  larger  sum  than  the 
value  fixed  on  the  appraisal  is  not  ground  for  vacating  the 
decree. 

Matter  of  Bruce,  59  Supp.  1083. 


448  INHERITANCE  TAXATION 

Of  course  if  the  discrepancy  were  sufficient  to  indicate 
fraud  the  fact  would  be  competent,  coupled  with  other 
evidence. 

Where  the  facts  were  in  the  possession  of  the  estate 
which  might  have  reduced  the  appraised  value  and  were 
not  disclosed  there  is  no  ground  for  re-opening  the  case. 
So,  where  a  beneficiary  paid  the  tax  and  eight  years  after- 
wards sought  a  refund  on  the  ground  that  he  took  the 
property  by  deed  from  the  deceased,  inter  vivos,  and  the 
deed  was  not  recorded  nor  produced  on  the  appraisal  it 
was  held  that  he  was  not  entitled  to  a  refund. 
Matter  of  Mather,  90  App.  Div.  382;  85  Snpp.  657. 

On  the  other  hand  the  mistake  may  be  one  of  mixed  law 
and  fact  where  the  relief  is  usually  granted.  To  illustrate : 
Taxes  computed  on  a  mutually  mistaken  construction  of 
law  and  fact  or  paid  as  a  temporary  payment  should  be 
refunded.  Money  paid  by  executors  on  a  life  estate,  in 
ignorance  of  the  fact  that  the  life  estate  had  been  termi- 
nated by  death,  may  be  recovered  back  by  the  executors  as 
paid  under  a  mistake  of  fact.  This  is  not  a  voluntary  pay- 
ment, as  to  constitute  a  voluntary  payment  it  must  be 
made  with  full  knowledge  of  all  the  facts  and  circumstances. 
Where  a  beneficiary  under  misconception  of  the  law 
advanced  the  money  to  pay  more  than  was  really  charge- 
able to  him,  and  where  the  property  is  sold  for  the  tax,  he 
is  subrogated  to  the  rights  of  the  state  and  should  be  repaid 
what  he  has  erroneously  expended. 

Sherman  v.  United  States,  178  U.  S.  150, 152,  20  Sup.  Ct.  779. 
Matter  of  Skinner,  106  App.  Div.   217;   94  Supp.   144;   mod.  92 

Supp.  972. 
Kahn  v.  Herold,  147  Fed.  575;  aff.  86  C.  C.  A.  598;  159  Fed.  608; 

163  Fed.  947. 
Matter  of  Wilcox,  118  Supp.  254. 


PABT  V  —  PBOCEBURE  449 

d.  LACHES. 

Where  a  charitable  corporation  failed  to  appear  before 
the  appraiser  and  claim  exemption  or  to  notify  its  attorney 
of  the  bequest  in  time  to  appeal  the  court  refused  to  grant 
relief  on  motion  to  modify  the  decree  fixing  the  tax.  It 
said: 

"  By  subdivision  6  of  Section  2490,  Code  of  Civil  Pro- 
cedure, the  surrogate  is  authorized  *  To  open,  vacate, 
modify  or  set  aside  or  to  enter  as  of  a  former  time,  a  decree 
or  order  of  his  court ;  or  to  grant  a  new  trial  or  a  new  hear- 
ing for  fraud,  newly-discovered  evidence,  clerical  error,  or 
other  sufficient  cause  only  in  the  same  manner,  as  a  court 
of  record  and  of  general  jurisdiction  exercises  the  s?me 
powers. '  The  petition  presented  to  the  surrogate  does  not 
allege  fraud,  newly-discovered  evidence  or  clerical  error. 
Did  it  allege  *  other  sufficient  cause  '?  That  question  was 
one  addressed  to  the  judicial  discretion  of  the  surrogate, 
and  he  determined  that  the  oversight  of  the  respondent 
and  failure  on  its  part  to  bring  to  the  attention  of  its  attor- 
neys information  possessed  by  it,  when  it  was  notified  of 
the  hearing  before  the  appraiser,  was  not  sufficient  cause 
to  grant  a  new  hearing.  He  might  also  have  determined 
that  the  allegations  presented  in  the  petition  did  not  dis- 
close that  the  respondent  would  on  said  statements  be 
entitled  to  exemption.  For  the  reasons  stated  the  order 
of  the  Appellate  Division  must  be  reversed  and  the  order 
of  the  surrogate  affirmed,  without  costs." 
Matter  of  Townsend,  215  N.  Y.  442. 

So  where  the  appraiser  failed  to  deduct  proportionate 
commissions  on  foreign  assets  and  the  executor  neglected 
to  take  any  appeal,  application  denied. 
Matter  of  Badger,  N.  Y.  L.  J.,  June  8,  1912. 

e.  BAD  FAITH. 

Of  course  the  court  will  not  grant  such  an  application 
where  there  is  reason  to  believe  that  it  is  not  made  in  good 
15 


450  INHERITANCE  TAXATION 

faith.  This  was  very  recently  illustrated  in  a  rather  curious 
case  before  the  New  York  County  Surrogate's  Court.  The 
opinion  speaks  for  itself : 

"  This  is  an  application  by  a  person  claiming  to  be  the 
sole  heir  and  next  of  kin  of  the  decedent  for  an  order  vacat- 
ing the  order  heretofore  entered  which  adjudged  that  the 
decedent  was  not  a  resident  of  this  state  at  the  time  of  his 
death,  and  that  his  estate  therefore  was  not  subject  to  a 
tax  under  the  provisions  of  the  Tax  Law  of  this  state. 
After  an  appraiser  had  been  designated  by  this  court  to 
appraise  the  estate  of  the  decedent  subject  to  a  transfer 
tax,  the  executor  made  an  application  to  vacate  the  order 
designating  the  appraiser  and  to  declare  the  estate  exempt 
from  taxation  upon  the  ground  that  the  decedent  had  his 
domicile  in  France  at  the  time  of  his  death.  The  state 
comptroller  did  not  oppose  the  motion,  and  an  order  was 
entered  adjudging  that  the  estate  was  exempt  from  tax- 
ation because  the  decedent  was  not  a  resident  of  this  state. 
The  present  applicant  formally  consented  to  the  entry  of 
that  order.  Subsequently  the  applicant's  claim  to  a  part 
of  the  estate  was  contested  by  other  persons  upon  the 
ground  that  under  the  law  of  France  the  property  passed 
to  the  contestants  and  not  to  the  applicant.  Apparently 
realizing  the  validity  of  this  claim  the  applicant  now  comes 
to  this  court  and  asks  that  the  order  of  exemption  be 
vacated  and  that  it  be  adjudged  that  the  decedent  had  his 
domicile  in  this  state.  He  had  no  compunction  in  joining  in 
the  application  to  this  court  to  declare  the  decedent  a  resi- 
dent of  France  when  such  adjudication  rendered  him 
exempt  from  the  payment  of  a  transfer  tax  in  this  state, 
and  now  that  he  finds  it  to  his  interest  to  have  the  court 
make  a  contrary  adjudication,  he  has  no  hesitation  in 
reversing  his  position  and  contending  that  the  decedent 
had  his  domicile  in  this  state.  The  court  looks  with  grave 
distrust  upon  such  an  application.  As  far  as  the  petitioner 


PART  V  —  PROCEDURE  451 

is  concerned  there  is  no  newly  discovered  evidence  sub- 
mitted on  this  application  and  no  reason  is  adduced  which 
would  warrant  the  court  in  vacating  the  order  heretofore 
entered.  The  petitioner's  right  to  the  property  will  be 
amply  protected  in  the  accounting  proceeding  now  pend- 
ing, and  the  right  of  the  state  to  a  tax  upon  the  estate  of 
the  decedent  may  be  determined  by  this  court  in  a  proper 
proceeding  brought  for  that  purpose.  Application 
denied. ' ' 

Matter  of  Chadwick,  N.  Y.  L.  J.,  June  23,  1917. 

f.     STATUTE  OF  LIMITATIONS. 

Such  an  order  will  not  be  made  where  the  tax  has  been 
paid  and  the  Statute  of  Limitations  has  intervened. 

Matter  of  Hoople,  179  N.  Y.  308;  72  N.  E.  229. 

Matter  of  Buckingham,  106  App.  Div.  13 ;  94  Supp.  130. 

Matter  of  Von  Post,  35  Misc.  367;  71  Supp.  1039. 

And  the  statute  may  be  retroactive,  affecting  payments 
already  made;  Matter  of  Hoople,  supra,  where  the  court 
said  : 

"It  is  a  fundamental  principle  of  our  jurisprudence 
that  no  action  will  lie  against  a  sovereign  state,  or  any  of 
its  officers,  to  enforce  an  obligation  of  the  state  without 
express  legislative  permission  (People  v.  Dennison,  84  N. 
Y.  272;  Lewis  v.  State  of  N.  Y.,  96  N.  Y.  71;  Locke  v.  State 
of  N.  Y.,  140  N.  Y.  480;  35  N.  E.  476;  Smith  v.  Reeves,  178 
U.  S.  436;  Flagg  v.  Bradford,  181  Mass.  315) ;  and  when  a 
state  does  abdicate  this  attribute  of  sovereignty  and  per- 
mits itself  to  be  sued,  the  citizen  who  benefits  by  such  an 
act  of  grace  acquires  no  vested  right  thereby,  but  simply 
a  privilege  voluntarily  granted  by  the  state,  which  may  be 
hedged  about  with  terms  and  conditions,  and  may  be  with- 
drawn as  freely  as  it  was  given.  (Beers  v.  Arkansas,  20 
How.  (U.  S.)  527;  Parmenter  v.  State  of  N.  Y.,  135  N.  Y. 
154;  31  N.  E.  1035;  Battzer  v.  North  Carolina,  161  U.  S. 


452  INHERITANCE  TAXATION 

240;  Railroad  Co.  v.  Tennessee,  101  U.  S.  337;  Railroad  Co. 
v.  Alabama,  101  U.  S.  832.) 

"  In  the  light  of  these  principles  it  is  obvious  that  the 
statutes  under  discussion  (chap.  399,  Laws  1892;  chap.  284, 
Laws  1897;  chap.  382,  Laws  1900)  invested  the  respondent 
with  no  absolute  right,  but  conferred  upon  him  a  mere 
privilege,  the  extent  and  duration  of  which  depended 
entirely  upon  the  language  conferring  it." 

General  statutes  of  limitation  do  not  run  against  the 
state  in  transfer  tax  proceedings. 

Bradford  v.  Storey,  189  Mass.  104;  75  N.  E.  256. 

Where  a  proceeding  to  collect  was  brought  within  the 
limitation  and  was  amended  after  the  limitation  had  run 
to  increase  the  demand,  held  that  it  related  back  to  the 
commencement  of  the  proceeding,  and  was  within  the 
statute,  as  it  did  not  set  up  a  new  cause  of  action. 
Connell  v.  Crosby,  210  111.  380;  71  N.  E.  350. 

2.  Motions  to  Remit  Penalty. 

Most  of  the  statutes  provide  that  interest  may  be  reduced 
from  W%  to  6%  in  case  of  "  unavoidable  delay."  Such 
reduction  must  be  secured  on  motion  to  remit  the  penalty. 

On  such  motion  the  burden  of  proving  that  the  delay  was 
unavoidable  is  on  the  estate. 

People  v.  Prout,  53  Hun  541 ;  6  Supp.  457. 

And  the  affidavits  must  make  a  sufficient  case.    So  when 
they  merely  recited  that  the  executors  and  trustees  were 
non-residents,  had  no  actual  notice  of  the  tax  law,  or  that 
any  tax  was  due  the  application  was  denied. 
Matter  of  Head,  204  N.  Y.  672. 

Many  of  the  statutes  provide  that  litigation  to  oppose 
the  tax  shall  not  be  construed  as  li  unavoidable  delay." 
In  the  absence  of  such  a  provision  the  Wisconsin  court 
so  construed  it. 


PABT  V  —  PROCEDURE  453 

"  Litigation  to  determine  doubtful  and  perplexing 
questions  as  to  the  liability  of  transferees  for  the  inheri- 
tance tax  and  delays  occasioned  thereby  constitute 
'necessary  litigation  or  other  unavoidable  delay.' — 10% 
penalty  remitted. ' ' 

State  v.  Pabst,  139  Wis.  561;  121  N.  W.  351. 
Matter  of  Moore,  90  Hun  62;  35  Supp.  782. 

When  the  tax  would  be  the  same  whether  the  deceased 
died  testate  or  intestate  the  pendency  of  a  will  contest 
cannot  be  pleaded  as  unavoidable  delay. 

Shelton  v.  Campbell,  109  Tenn.  690;  72  S.  W.  112. 

1 '  Unavoidable  delay  ' '  may  be  a  misnomer  of  the  trustee 
named  in  the  will  which  was  not  discovered  for  some  time. 

In  re  Banks,  5  Pa.  Co.  Ct.  614. 

The  practice  is  for  the  surrogate  not  to  entertain  a  motion 
to  remit  penalty  until  after  the  report  of  the  appraiser  has 
been  filed. 

Matter  of  Theodore  Schumacher,  N.  Y.  L.  J.,  July  29,  1914. 

The  surrogate  has  not  power  to  direct  that  no  interest 
shall  be  charged.  He  is  limited  to  directing,  upon  a  proper 
case  shown,  a  reduction  of  the  interest  from  10%  to  6% 
in  accordance  with  the  provisions  of  the  second  sentence 
of  §  223. 

Matter  of  Golden,  N".  Y.  L.  J.,  July  29, 1914. 

It  is  the  penalty  alone  that  can  be  remitted.  There  is  no 
provision  in  any  of  the  statutes  for  the  remission  of  the 
interest  when  it  has  once  accrued  and  the  rights  of  the  state 
have  vested  thereto. 

Matter  of  Griggs,  163  Supp.  1096. 

It  is  not  a  matter  of  equitable  relief  and  therefore  pay- 
ment to  the  wrong  official  under  a  misapprehension  of  the 


454  INHERITANCE  TAXATION 

law  is  not  ground  for  the  granting  of  relief  that  is  not 
within  the  power  of  the  court  to  afford. 

People  ex  rel.  Lown  v.  Cook,  158  App.  Div.  74;  142  Supp.  692;  aff. 
209  N.  Y.  578. 

Application  to  remit  the  interest  can  only  be  made  to 
the  court  upon  motion,  and  is  not  to  be  the  subject  of  an 
appeal  from  the  decree  fixing  the  tax  as  the  decree  should 
not  concern  itself  with  the  amount  of  interest. 

Matter  of  De  Graaf,  24  Misc.  147 ;  153  Supp.  591. 

Application  for  the  remission  of  interest  will  be  denied 
unless  it  is  shown  that  the  reasons  required  by  the  statute 
existed  and  caused  the  delay. 

Matter  of  Wormser,  51  App.  Div.  441 ;  64  Supp.  897. 

Relief  from  the  payment  of  interest  will  not  be  granted 
where  the  only  reasons  given  were  that  the  executors  were 
ignorant  of  the  law,  or  that  such  payment  will  be  a  hard- 
ship to  the  legatee. 

Matter  of  Platt,  8  Misc.  144;  29  Supp.  396. 

The  appraiser  cannot  remit  the  penalty.  Special  appli- 
cation showing  grounds  therefor  must  be  made  to  the  sur- 
rogate. 

Matter  of  Skinner,  106  App.  Div.  217;  94  Supp.  144. 

' '  The  order  fixing  tax  was  entered  before  the  expiration 
of  the  eighteen  months  within  which  the  tax  could  be  paid 
without  penalty,  and  as  the  executrix  failed  to  take  advan- 
tage of  this  fact  the  application  is  denied. ' ' 

Matter  of  Brower,  N.  Y.  L.  J.,  July  15,  1913. 

Neither  is  payment  into  court  under  a  court  order  a  pay- 
ment and  discharge  of  the  tax. 

Pitman  v.  State,  (Okla.)  158  Pac.  1137. 


PART  V  -  -  PROCEDURE  455 

3.  Mandamus. 

The  surrogate  cannot  by  order  direct  the  comptroller  to 
refund  a  tax  already  paid. 

Matter  of  J.  H.  B.  Dwight,  N.  Y.  L.  J.,  Jan.  19,  1915. 
Matter  of  Meyer,  N.  Y.  L.  J.,  Jan.  31, 1914. 
Matter  of  Tillinghast,  94  Misc.  76;  157  Supp.  379. 

a.     WHEN  WRIT  GRANTED. 

Mandamus  is  the  proper  remedy  to  compel  a  refund 
where  the  tax  has  been  paid  erroneously,  as  where  the 
decree  of  the  surrogate  was  entered  without  jurisdiction. 

Matter  of  Coogan,  27  Misc.  563;  59  Supp.  Ill;  aff.  162  N.  Y.  613;  57 
N.  E.  1107. 

Where  the  tax  has  been  paid  erroneously  mandamus  will 
lie  to  compel  the  refund  of  interest  as  well. 

Matter  of  Han  ford,  113  App.  Div.  894;  aff.  186  N.  Y.  547. 
Matter  of  Wood,  91  App.  Div.  3;  86  Supp.  269. 

It  will  lie  to  compel  a  refund  from  the  county  treasurer 
before  the  tax  has  been  turned  over  to  the  state  treasury. 
Matter  of  Park,  8  Misc.  550 ;  29  Supp.  1081. 

But  if  the  county  treasurer  has  turned  over  the  fund 
recourse  must  be  had  against  the  comptroller. 

Matter  of  Howard,  54  Hun  305 ;  7  Supp.  594. 
Matter  of  Hall,  54  Hun  637;  7  Supp.  595. 

Mandamus  lies  to  compel  the  surrogate  to  appoint  an 
appraiser  : 

"  Of  course  before  acting  on  his  own  motion,  the  surro- 
gate must  determine  whether  the  facts  within  his  official 
knowledge  are  such  as  to  require  action,  and  before  acting 
upon  the  application  of  an  interested  party  he  must  deter- 
mine whether  a  proper  application  has  been  made,  but  his 
duty  to  act  is  just  as  imperative  in  either  case  as  is  the 
duty  of  local  assessors  to  obey  the  command  of  the  statute 
respecting  the  performance  of  their  duty,  and  there  is  no 


456  INHERITANCE  TAXATION 

more  reason  for  saying  that  he  has  a  discretion  in  the 
matter  than  there  is  for  saying  that  any  officer  charged  with 
the  performance  of  a  public  duty  has  a  discretion  whether 
he  will  discharge  such  duty. ' ' 

Kelsey  v.  Church,  112  App.  Div.  408;  98  Supp.  535. 

Mandamus  will  lie  to  compel  the  comptroller  to  issue  a 
receipt  where  the  tax  has  been  paid.  Upon  a  petition  for 
writ  of  mandate  to  compel  the  state  comptroller  to 
countersign  receipt  for  inheritance  tax,  the  court  held  that 
the  law  contemplates  the  payment  of  the  tax  by  any  legatee 
or  heir  of  the  amount  due  from  him,  so  that  he  may 
presently  come  into  possession  of  his  legacy  or  inheritance, 
and  the  receipt  attesting  its  payment  should  be  counter- 
signed by  the  comptroller,  and  should  be  allowed  in  the 
executor's  account.  The  comptroller  has  no  judicial  dis- 
cretion by  which  he  may  exercise  the  right  to  refuse  to 
countersign  a  receipt  as  directed  by  the  statute.  "  In 
countersigning  the  receipt  the  comptroller  decides  nothing, 
nor  should  the  receipt  be  so  framed  as  to  bind  the  state, 
or  to  conclude  its  right  to  have  the  question  reviewed  on 
appeal  should  the  state  desire  to  appeal  from  the  action  of 
the  court."  A  writ  of  mandate  lies  in  proper  cases  to 
compel  the  comptroller  to  countersign  the  receipt  for  the 
inheritance  tax. 

Becker  v.  Nye,  8  Cal.  Dec.  129. 

b.     WHEN  WRIT  REFUSED. 

But  if  there  is  a  dispute  as  to  the  amount  of  tax  due  and 
a  receipt  has  been  given  "  on  account  "  mandamus  will 
not  be  granted. 

People  ex  rel  Lawn  v.  Cook,  158  App.  Div.  74;  142  Supp.  692;  aff. 
209  N.  Y.  578. 

Nor  will  the  writ  be  allowed  where  the  tax  has  been  paid 
in  another  estate  and  must  be  refunded  to  the  executors  of 
that  estate. 

People  ex  rel.  Ripley  v.  Williams,  69  Misc.  402;  127  Supp.  749. 


PABT  V  —  PROCEDURE  457 

Mandamus  does  not  lie  to  compel  a  court  to  enter  a  final 
decree  without  payment  of  the  tax. 

Strauss  v.  Costello,  29  N.  Dak.  215;  150  N.  W.  874. 

The  court  said  at  page  222 : 

"  But  it  is  contended  by  the  appellant  that  the  County 
Court  refused  to  act  and  that  the  writ  will  lie  to  compel 
action.  We  do  not  so  construe  the  attitude  of  the  judge  of 
the  County  Court.  He  did  act.  He  took  jurisdiction 
of  the  application  for  the  granting  and  entry  of  a  decree 
of  final  distribution  and  acted  thereon,  holding  that  the 
petitioner  had  not  shown  facts  entitling  him  to  such  a 
decree.  If  the  judge  was  in  error,  it  constituted  an 
erroneous  decision  on  an  application  of  which  he  had  taken 
cognizance  and  was  an  error  in  judgment  reviewable  on 
appeal;  and  was  not  a  refusal  to  take  jurisdiction  or  to 
act.  Mandamus  does  not  lie  to  correct  errors  of  law 
occurring  in  course  of  proceedings  in  the  inferior  court. 
Having  assumed  jurisdiction,  the  only  function  the  writ 
could  serve,  if  issued,  would  be  to  direct  the  judge  of  the 
County  Court  what  character  of  judgment  to  enter.  This 
is  seldom,  if  ever,  proper. ' ' 

Mandamus  does  not  lie  to  compel  comptroller  to  accept 
the  nomination  of  an  appraiser  by  the  surrogate  under 
the  New  York  statute. 

Duell  v.  Glynn,  191  N.  Y.  357;  84  N.  E.  282. 

Where  there  is  a  right  of  appeal  given  from  the  order 
a  superior  court  will  not  restrain  the  action  of  a  lower 
court  in  fixing  an  inheritance  tax. 

Cross  v.  Superior  Court,  2  CaL  App.  342;  83  Pac.  815. 

4.  Proceedings  to  Collect  Delinquent  Taxes. 

Such  proceedings  cannot  be  entertained  if  commenced 
before  the  expiration  of  the  eighteen  months  allowed  by  the 
New  York  statute  for  payment  without  interest. 
Frazer  v.  People,  6  Dem.  174;  3  Supp.  134. 


458  INHERITANCE  TAXATION 

But  notice  to  the  comptroller  of  a  proposed  decree  which 
does  not  provide  for  the  payment  of  any  transfer  tax  does 
not  bar  a  subsequent  proceeding  to  collect  it. 
Matter  of  Pearsall,  149  Supp.  36. 

An  affidavit  merely  alleging  the  opinion  of  the  comp- 
troller or  district  attorney  that  a  tax  is  due  and  not  paid 
is  insufficient.    It  must  disclose  all  the  material  facts. 
Matter  of  McCarthy,  5  Misc.  276;  25  Supp.  987. " 

Error  in  fixing  tax  on  some  other  basis  than  market 
value  must  be  corrected  by  appeal ;  it  cannot  be  availed  of. 
in  a  collateral  proceeding  to  collect  the  tax,  as  a  defence. 
Hanberg  v.  Morgan,  263  111.  616;  105  N.  E.  720. 

The  decree  fixing  the  tax  is  final  and  conclusive  on  the 
defendant  in  a  proceeding  to  collect  it,  where  no  appeal 
was  taken. 

Matter  of  Hackett,  14  Misc.  282;  35  Supp.  1051. 
Attorney-General  v.  Skehill,  217  Mass.  364;  104  N.  E.  748. 

The  only  remedy  is  a  motion  to  modify  the  decree. 
Matter  of  Clarkson,  149  Supp.  32. 

5.  Personal  Liability  of  Executor. 

Failure  to  deduct  the  tax  before  delivery  of  the  legacy 
makes  the  executor  personally  liable. 
Matter  of  Weed,  10  Misc.  628;  32  Supp.  777. 

11  It  is  the  duty  of  the  personal  representative  in  every 
case  where  a  tax  is  due  under  this  act,  before  paying  over 
any  legacy  or  distributive  share,  to  exact  from  the  person 
who  is  to  receive  it,  or  to  retain  in  his  hands  out  of  the 
legacy  or  distributive  share,  a  sum  sufficient  to  pay  the 
tax.  If  he  does  not  he  runs  the  risk  of  paying  it  out  of 
his  own  property." 

Hunter  v.  Husted,  45  N.  C.  141. 


PART  V  —  PROCEDURE  459 

When  the  failure  to  pay  is  due  to  his  own  misconduct 
he  is  personally  liable. 

Hopkins'  Appeal,  77  Conn.  644;  60  A.  667. 

Testamentary  trustees  knew  of  a  deed  by  testator  con- 
veying away  property  but  failed  to  disclose  it  and  per- 
mitted an  inheritance  tax  to  be  assessed  against  the  whole 
estate  —  held  personally  liable  to  cestui  que  trust. 
Lorenz  v.  Wetter',  267  111.  230;  108  N.  E.  306. 

Where  executrix  resigns  without  paying  tax  the  court 
can  appoint  an  administrator  de  bonis  non  to  collect  it. 
Chamberlain  v.  Stecher,  78  Ohio  St.  271;  85  N.  E.  526. 

An  executor  cannot  be  held  personally  liable  for  tax  on 
property  without  the  state  which  never  comes  into  his 
possession,  but  must  be  included  in  his  inventory. 

Gallup's  Appeal,  76  Conn.  617;  57  A.  699. 
Matter  of  Kubler,  N.  Y.  L.  J.,  Aug.  6,  1915. 

The  executor  should  not  be  charged  with  five  per  cent, 
interest  upon  the  amount  of  the  transfer  tax  upon  the 
estate  upon  the  ground  that  he  should  have  had  the  tax 
assessed  and  paid  within  six  months  after  the  death  of 
the  testator,  where  the  testator  died  October  10,  1896,  and 
probate  was  issued  February  3,  1897,  and  the  tax  was 
assessed  May  27,  1897. 

In  re  Sudds,  32  Misc.  182;  66  Supp.  231. 

In  Matter  of  Alfred  W.  Kubler,  N.  Y.  Law  Journal, 
August  6,  1915,  Surrogate  Cohalan  held:  "  This  is  an 
appeal  by  the  executors  from  the  transfer  tax  appraiser's 
report  and  the  order  entered  thereon,  upon  the  ground 
that  these  do  not  each  contain  a  provision  exempting  the 
executors  from  such  liability  as  arises,  with  which  they 
would  be  chargeable  for  the  payment  of  the  transfer  tax 
upon  that  portion  of  decedent's  estate  amounting  to 
$29,326.48,  which  at  the  time  of  his  death  and  still  is 


460  INHERITANCE  TAXATION 

situated  at  Basel,  Switzerland,  and  which  will  be  admin- 
istered in  that  country.  Neither  the  executors  nor  this 
court  appear  to  have  any  control  over  the  disposition  of 
this  money  (Matter  of  Dingman,  66  App.  Div.  228;  72 
Supp.  694;  Matter  of  Marshing,  N.  Y.  Law  Journal, 
March  6, 1907).  The  appeal  is  sustained  and  the  executors 
relieved  from  liability  for  tax  on  the  transfer  of  the  said 
portion  of  decedent's  estate  situated  in  Basel,  Switzer- 
land. The  order  fixing  tax  will  be  modified  in  accordance 
with  the  terms  of  this  decision." 

Where,  after  a  hearing  upon  proper  notice  to  all  parties 
interested,  it  is  adjudged  that  an  executor  has  been  unable 
to  collect  the  moneys  for  the  payment  of  a  tax  imposed 
under  the  Transfer  Tax  Law  from  the  transferred  prop- 
erty, through  the  destruction  of  the  property  or  oblitera- 
tion of  its  value  during  the  process  of  administration 
without  fault  or  delinquency  upon  his  part,  the  executor 
is  not  personally  liable  for  the  tax,  and  the  provisions  of 
this  section  with  reference  to  his  final  accounting  are  not 
applicable. 

Matter  of  Meyer,  209  N.  Y.  386. 

The  mere  fact  that  the  beneficiaries  are  residents  within 
the  jurisdiction  is  not  enough  on  which  to  predicate  juris- 
diction to  assess  the  tax  where  neither  the  decedent  nor 
the  property  are  situated  within  the  state. 

State  v.  Brim,  27  N.  C.  300. 
State  v.  Brevard,  62  N.  C.  141. 

Where  the  executrix  has  paid  a  tax  to  the  federal  gov- 
ernment which  was  not  a  proper  charge  against  the  estate, 
this  should  not  be  surcharged  against  the  executrix  where 
it  is  admitted  that  the  sum  may  be  recovered  back. 
Matter  of  Marx,  117  App.  Div.  890;  103  Supp.  446. 


PART  V  —  PROCEDURE  461 

Personal  liability  extends  to  the  beneficiaries  who  have 
received  the  property. 

Matter  of  MeGne,  N.  Y.  L.  J.,  Feb.  7,  1913;  off.  160  App.  Div.  890; 

144  Supp.  1127. 

Succession  of  Pargoud,  13  La.  Ann.  267. 
Wilhelmi  v.  Wade,  65  Mo.  39. 
Matter  of  Gihon,  169  N.  Y.  443;  62  N.  E.  561. 
Matter  of  Thomson,  12  Phila.  (Pa.)  36. 
In  re  Lotzgesell,  62  Wash.  352;  113  Pac.  1105. 
United  States  v.  Tappan,  Fed.  Cas.  16,431. 
United  States  v.  Trucks,  27  Fed.  541. 
United  States  v.  Kelly,  27  Fed.  542. 
Montague  v.  State,  74  Md.  481,  487. 

Personal  liability  cannot  extend  to  foreign  executor. 

Goodrich  v.  Roch.  Trust  &  S.  D.  Co.,  173  App.  Div.  577;  160  Supp. 
454. 


PART  VI— THE  STATUTES 


A.  General  Review  of  the  State  Statutes. 

1.  Wherein  They  Agree. 

a.  Transfers  by  Will  and  Intestacy. 

b.  Transfers  in  Avoidance. 

c.  Common  Law  Transfers. 

d.  Powers  of  Appointment. 

e.  Life  Estates. 

f.  Remainders. 

g.  Executors  and  Their  Duties, 
h.  Appraisal. 

i.    Valuation. 

j.  Interest,  Discount  and  Penalty, 
k.  Banks  and  Trust  Companies. 
1.    The  Interest  Taxed. 

2.  Wherein  They  Differ. 

a.  Collaterals  and  Strangers  Only. 

b.  Nonresident  Decedents. 

c.  Tangibles  and  Intangibles. 

d.  Reciprocal  Statutes. 

e.  Double  Taxation. 

f.  Questions  of  Residence. 

3.  As  Producers  of  Revenue. 

a.  The  Rate. 

b.  Exemptions. 

c.  Facts  as  to  Revenue. 

B.  The  Federal  Statute. 

1.  History  and  Development. 

a.  Revolutionary  War  Tax  1797  to  1802. 

b.  Civil  War  Tax  1862  to  1870. 

c.  Spanish  War  Tax  1898  to  1902. 

2.  Doubtful  Constitutionality. 

3.  Provisions  in  Detail. 

a.  The  Rates. 

b.  Exemptions  and  Deductions. 

c.  Duties  of  Executors. 

d.  Discount,  Interest  and  Penalty. 

e.  Treasury  Department  Rulings. 

3.  The  Statute  and  Treasury  Department  Regulations. 

[462] 


PART  VI  —  THE  STATUTES  463 

C.  The  New  York  Statute. 

1.  History  and  Development. 

a.  Frequent  Changes. 

b.  List  of  the  Statutes. 

c.  The  First  Statutes  Taxing  Only  Collaterals. 

d.  The  Act  of  1892  Taxing  Direct  Inheritances. 

e.  The  Act  of  1896  —  Powers  of  Appointment. 

f.  Amendment  of  1899  —  Highest  Rate. 

g.  Act  of  1905  — Real  Estate  Added. 

2.  The  Present  Act  and  Its  Amendments. 

a.  The  Original  Statute  of  1909. 

b.  The  "  Reign  of  Terror  Act." 

c.  A  Radical  Change  in  Theory  as  to  the  Transfer  Taxed. 

d.  The  Amendments  of  1911  —  Tangibles  and  Intangibles. 

e.  The  Tax  Extended  to  Curtesy. 

f.  Maximum  and  Minimum  Rates. 

3.  The  Problem  as  the  Property  of  Nonresidents. 

a.  The  Previous  Policy  of  the  State. 

b.  Real  Estate  of  Corporations. 

c.  Copartnership  Assets. 

d.  Exemptions. 

e.  Joint  Estates. 

f.  Capital  Invested  in  Business. 

g.  Tenancies  by  the  Entirety. 

h.  Attempt  to  Define  a  "  Resident." 
i.    Computations. 
j.  New  Rates  and  Exemptions, 
k.  Amendments  of  1917. 

4.  Text  of  the  New  York  Statute  With  Amendments  to  Date. 


464  ^-INHERITANCE  TAXATION 


PART  VI— THE  STATUTES 


A.—  GENERAL  REVIEW  OF  THE  STATE  STATUTES 

The  Federal  Government  and  all  the  states  of  the  Union 
except  Alabama,  Florida,  South  Carolina,  Mississippi  and 
New  Mexico  now  impose  inheritance  taxes. 

In  the  last  four  years  36  states  have  passed  new  inher- 
itance tax  statutes  or  radically  amended  those  existing 
out  of  44  imposing  such  taxes,  as  follows: 

Arizonia,  1912,  first  statute  taxing  inheritances. 

Arkansas,  1913,  1915,  1917,  amendments. 

California,  1913,  1915,  amendments,  1917,  new  statute. 

Colorado,  1913,  amendments. 

Connecticut,  1915,  new  statute,  1917,  amendments. 

Delaware,  1917,  first  direct  inheritance  tax  imposed. 

Georgia,  1913,  first  statute  taxing  inheritances. 

Illinois,  1913,  1917,  amendments. 

Indiana,  1913,  first  statute,  amended  1917. 

Kansas,  1915,  new  statute,  amended  1917. 

Louisana,  1912,  amendments. 

Maine,  1913,  1917,  amendments. 

Massachusetts,  1912,  amendments. 

Michigan,  1913,  1915,  amendments. 

Missouri,  1917,  new  statute  first  taxing  direct  inher- 
itances. 

Nebraska,  1913,  new  statute,  amended  1915. 

Nevada,  1913,  first  statute  taxing  inheritances. 

New  Hampshire,  1913,  1915,  amendments. 

New  Jersey,  1914,  amendments. 

New  York,  1915,  1916,  1917,  amendments. 

North  Carolina,  1913,  1915,  1917,  amendments. 


PART  VI  —  THE  STATUTES  465 

North  Dakota,  1917,  new  statute. 

Ohio,  1913,  amendments. 

Oklahoma,  1915,  new  statute. 

Oregon,  1915,  1917,  amendments. 

Pennsylvania,  1917,  first  statute  taxing  direct  inher- 
itances. 

Rhode  Island,  1916,  first  statute  taxing  inheritances. 

South  Dakota,  1913,  new  statute,  amended  1915. 

Tennessee,  1915,  amendments. 

Texas,  1917,  amendments. 

Utah,  1915,  1917,  amendments. 

Vermont,  1917,  first  direct  inheritance  tax. 

Virginia,  1916,  first  direct  inheritance  tax. 

Washington,  1917,  amendments. 

West  Virginia,  1913,  amendments. 

Wisconsin,  1913,  1917,  amendments. 

United  States,  1916,  new  statute,  amended  1917. 

The  changes  in  nearly  all  the  states  in  the  last  four 
years  make  the  law  difficult  to  ascertain,  as  no  attempt 
has  been  made  to  collect  and  publish  the  statutes  since 
1913.  The  general  trend  has  been  to  increase  the  rates 
and  reduce  the  exemptions.  In  the  western  states  more 
stringent  efforts  have  been  made  to  reach  the  property  of 
non-residents  within  their  jurisdiction,  while  those  in  the 
east  have  generally  endeavored  to  avoid  double  taxation 
and  exempt  the  personal  property  of  nonresidents  within 
the  state. 

1.  Wherein  They  Agree. 

While  the  various  statutes  differ  widely  as  to  rates, 
exemptions  and  the  policy  of  taxing  the  personal  property 
of  nonresidents  they  are  all  built  on  the  same  general  plan 
and  are  largely  copied  one  from  the  other  with  only  minor 
differences  of  procedure. 


466  INHERITANCE  TAXATION 

a.  TRANSFERS  BY  WILL  AND  INTESTACY. 

The  statutes  all  tax  transfers  by  will  or  intestacy  and 
all  but  Rhode  Island,  Utah,  and  the  United  States  confine 
the  tax  to  the  amount  passing  at  death  to  each  beneficiary, 
the  tax  being  on  the  right  to  receive.  Ehode  Island  taxes 
both  the  entire  estate  for  the  right  of  the  decedent  to 
transfer  it  and  the  share  of  each  beneficiary  for  the  right 
to  receive  it.  The  Federal  statute  and  that  of  Utah  tax 
the  entire  net  estate  of  the  decedent  for  the  right  to  trans- 
fer it  to  the  living  successors. 

b.  TRANSFERS  IN  AVOIDANCE. 

With  the  exception  of  Virginia  all  the  statutes  tax  trans- 
fers by  deed,  grant,  sale  or  gift  made  "  in  contemplation 
of  death  or  intended  to  take  effect  in  possession  or  enjoy- 
ment at  or  after  death." 

California,  Colorado,  Delaware,  Georgia,  Kansas, 
Maine,  Massachusetts,  Nevada,  Ehode  Island,  Vermont, 
Wisconsin  and  the  Federal  Act  add  the  provision  that 
such  transfers  must  be  made  without  "  adequate  "  con- 
sideration or  "  fair  consideration  by  a  bona  fide  pur- 
chaser in  money  or  money's  worth." 

This  amendment  is  construed  rather  to  clarify  and 
explain  than  alter  the  law. 

Estate  of  Reynolds,  169  Cal.  600;  147  Pac.  268. 

When  a  transfer  is  made  without  such  consideration 
within  one  year  of  death  it  is  deemed  to  be  in  contempla- 
tion thereof  by  the  statute  of  Colorado.  When  so  made 
within  twro  years,  by  the  Federal  statute  and  Indiana, 
and  when  so  made  within  six  years  by  the  statute  of  Wis- 
consin. In  Missouri  the  transfer  is  deemed  to  be  "  in 
contemplation  ' '  when  made  without  valuable  and  adequate 
consideration  "  and  in  North  Dakota  when  so  made  within 
six  years.  The  other  states  leave  the  question  to  the 
courts. 


PART  VI  —  THE  STATUTES  467 

c.  COMMON  LAW  TRANSFERS. 

1.  Joint  estates:  After  much  litigation  the  courts  inclined 
to  the  view  that  the  succession  of  one  joint  tenant  to  the 
whole  estate  on  the  death  of  the  other  was  not  a  transfer 
taxable    under    the    statutes.      Such    transfers    are    now 
specifically  taxed  in  New  York,   California  and  by  the 
Federal  Act  by  declaring  successions  to  the  sole  estate  by 
joint  tenants  a  taxable  transfer. 

2.  Dower,  Curtesy,  Community  Property:   Most  of  the 
statutes  now  tax  a  husband's  succession  to  curtesy  and  to 
his  wife's  personalty  under  common  law  right.    With  the 
exception  of  Illinois  the  statutes  all  exempt  dower.    Until 
1917  California  taxed  a  widow's  community  succession  but 
now  exempts  it  as  does  Louisiana ;  but  the  Federal  statute 
taxes  it. 

d.  POWERS  OF  APPOINTMENT. 

Successions  under  powers  of  appointment  have  been  the 
source  of  much  legislative  concern  and  have  been  fruitful 
of  litigation.  They  continually  present  problems  as  to 
whether  the  succession  is  under  the  will  or  deed  creating 
the  power  or  under  the  exercise  of  the  power  by  its  donee 
and  what  happens  when  the  power  is  not  exercised.  These 
methods  are  followed: 

1.  California  (prior  to  1917)  and  New  Jersey  tax  the 
succession  under  such  powers  to  the  estate  of  the  creator 
of  the  power. 

2.  Arkansas,  Indiana,  New  York,  Oklahoma  and  West 
Virginia  tax  the  exercise  of  the  power  as  though  the  prop- 
erty in  fact  belonged  to  the  donee  thereof,  but  are  silent  as 
to  the  nonexercise  of  the  power. 

3.  California     (statute    1917),    Colorado,    Connecticut, 
Idaho,  Illinois,  Massachusetts,  Minnesota,  Rhode  Island, 
South  Dakota  and  Wisconsin  tax  the  exercise  of  the  power 
and  also  tax  the  succession  on  failure  to  exercise  it  as 


468  INHERITANCE  TAXATION 

though  it  has  been  the  property  of  the  donee  and  not  of 
the  creator  of  the  power. 

The  other  states  and  Federal  Act  leave  transfers  by 
powers  of  appointment  to  judicial  construction. 

e.  LIFE  ESTATES. 

All  the  statutes  provide  for  the  immediate  valuation  of 
life  estates  and  remainders  and  under  the  statutes  or  the 
practice  of  the  courts  this  is  universally  done  by  the  use 
of  the  various  mortality  tables  at  the  prescribed  rate  of 
interest.  As  to  these,  the  states  widely  differ  and  the 
whole  subject  is  reviewed  ante  under  Life  Estates  and 
Remainders. 

f.  REMAINDERS. 

The  states  differ  as  to  whether  the  tax  on  the  remainder 
shall  be  collected  at  once  or  postponed  until  the  beneficiary 
gets  the  property.  In  case  of  contingent  remainders  where 
the  amount  of  the  property  itself  is  uncertain,  as  in  case 
of  life  estates  with  power  to  invade  the  principal,  the 
taxation  of  the  remainder  is  usually  suspended  unless  the 
tax  is  compounded  by  a  settlement  agreement  which  nearly 
all  the  statutes  permit  in  such  cases. 

Eight  states  make  the  tax  on  all  remainders  due  at  once : 
Arkansas,  Delaware,  Georgia,  Maryland,  Maine,  NewT 
Hampshire,  Ohio  and  West  Virginia,  though  the  practice 
is  to  suspend  the  tax  where  the  amount  is  uncertain. 

These  states  postpone  contingent  remainder  taxation 
until  the  beneficiary  becomes  entitled  to  the  property, 
usually  providing  that  security  must  be  given  in  case  of 
personal  property:  Michigan,  Missouri,  New  Jersey, 
North  Dakota,  Oklahoma,  Oregon,  Pennsylvania,  Ten- 
nessee, Utah  and  Washington. 

The  usual  practice  is  to  give  the  remainderman  of  per- 
sonal property  an  election  not  to  pay  the  tax  until  he 


PART  VI  —  THE  STATUTES  469 

receives  the  property  provided  he  files  a  bond  to  pay  the 
tax  with  interest  with  an  inventory  of  the  property  and 
renews  the  bond  every  five  (5)  years.  This  is  the  law  in 
Arizona,  California,  Idaho,  Illinois,  Indiana,  Iowa, 
Kansas,  Kentucky,  Massachusetts,  Michigan  Montana, 
Missouri,  Nevada,  New  Jersey,  Oklahoma,  Oregon,  Penn- 
sylvania, Rhode  Island,  Wisconsin,  Wyoming.  Some  of 
these  states  extend  this  to  real  estate,  others  let  the  tax 
remain  a  lien  during  the  life  tenure. 

In  case  of  contingent  remainders  these  states  assess  the 
tax  at  the  highest  possible  rate  with  provision  for  a  refund 
if  a  lower  rate  turns  out  to  be  due :  California,  Colorado, 
Idaho,  Illinois,  Indiana,  New  York,  Minnesota,  and  South 
Dakota.  The  provision  has  been  the  source  of  much  liti- 
gation. 

Rhode  Island  and  Wisconsin  on  the  other  hand  tax  the 
contingent  remainder  at  the  lowest  possible  rate  and 
require  adjustment  if  a  higher  rate  is  ultimately  due. 

Connecticut  makes  the  contingent  remainder  rate  the 
same  as  that  of  the  life  tenant  with  provision  for  ultimate 
adjustment  of  any  difference  on  the  falling  in  of  the 
remainder. 

In  all  the  states  the  general  principle  is  the  same,  the 
variations  being  as  to  when  the  tax  falls  due  and  the  rate 
at  which  it  is  imposed. 

g.     EXECUTORS  AND  THEIR  DUTIES. 

All  the  statutes  require  the  executor  or  administrator 
to  file  a  sworn  inventory  which  is  made  the  basis  for  the 
appraisal  of  the  estate  and  the  assessment  of  the  tax. 
They  all  hold  him  personally  liable  for  the  tax.  They  all 
require  him  to  deduct  the  tax  from  a  money  legacy  or 
collect  it  from  the  beneficiary,  if  in  property,  and  forbid 
him  to  deliver  it  until  the  tax  is  paid.  They  all  make  the 
tax  a  lien  and  provide  that  the  property,  or  so  much 


470  INHERITANCE  TAXATION 

thereof  as  is  necessary,  may  be  sold  to  pay  the  tax  as  in 
case  of  debts.  They  all  require  him  to  pay  the  tax  to  the 
proper  official  and  secure  a  receipt  which  must  be  pro- 
duced as  a  voucher  on  final  accounting.  They  all  provide 
that  no  final  decree  settling  his  accounts  may  be  granted 
until  it  is  shown  that  the  tax  has  been  paid  or  that  none 
is  due.  Bequests  to  executors  in  lieu  of  commissions  are 
universally  taxed  where  they  exceed  a  reasonable  com- 
pensation for  services. 

h.     APPRAISAL. 

All  of  the  statutes  use  the  machinery  of  the  probate 
courts  for  the  collection  of  the  tax  and  most  of  them 
require  the  judge  or  surrogate  having  jurisdiction  to  grant 
letters  testamentary  or  of  administration  to  assess  it  on 
appraisal.  Some  states  permit  the  sworn  inventory  to 
stand  as  the  appraisal  unless  the  treasurer,  comptroller  or 
tax  commissioner  is  dissatisfied;  but  provide  for  the 
appointment  of  an  appraiser  if  there  is  any  question  in 
dispute  who  proceeds,  upon  due  notice  to  all  parties  inter- 
ested, to  appraise  the  estate  at  its  fair  market  value, 
usually  the  value  at  the  death  of  the  decedent.  From  the 
appraisal  so  made  there  is  always  an  appeal  to  the  probate 
court  which  may  order  a  reappraisal  or  assess  the  tax  and 
from  such  decree  an  appeal  lies  in  the  same  manner  as 
from  other  decrees  unless  special  provisions  are  made  as 
to  time,  etc.  In  all  these  features  the  statutes  are  prac- 
tically identical. 

Provisions  are  also  usually  made  for  motions  to  exempt 
an  estate  which  is  obviously  not  taxable  without  the 
formality  of  an  appraisal. 

i.     VALUATION. 

The  time  when  the  tax  falls  due  is  the  time  when  the 
value  must  be  fixed  but  losses  in  process  of  administration 


PART  VI  —  THE  STATUTES  471 

have  so  often  occurred  and  beneficiaries  so  frequently 
have  been  assessed  upon  the  transfer  for  the  property 
they  never  in  fact  have  received  that  the  recent  statutes 
enacted  by  Connecticut,  Khode  Island  and  the  Federal 
government  allow  a  deduction  for  losses  during  adminis- 
tration except  those  due  merely  to  the  rise  and  fall  in  the 
price  of  stocks.  This  is  a  relief  which  the  courts  cannot 
give  and  will  doubtless  be  generally  adopted  in  other 
states. 

j.     INTEREST,  DISCOUNT  AND  PENALTY. 

Following  is  a  synopsis  of  the  provisions  of  the  statutes 
with  regard  to  rates  of  interest  and  discount: 

Federal  tax  —  due  one  year  after  death.  If  not  paid 
within  90  days  after  that  10  per  cent,  interest  from  date 
of  death  which  may  be  reduced  to  6  per  cent,  in  case  of 
unavoidable  delay.  If  paid  before  due  discount  of  5  per 
cent,  per  annum  calculated  from  date  of  payment  to  date 
when  due. 

Arizona. —  Due  at  death,  after  8  months  interest  at  8 
per  cent,  from  death,  in  case  of  unavoidable  delay,  6  per 
cent.  If  paid  within  8  months,  5  per  cent,  discount. 

Arkansas. —  Due  at  death,  interest  at  6  per  cent,  after 
6  months,  after  12  months  10  per  cent,  penalty  in  addition 
to  interest,  except  in  case  of  unavoidable  delay  when 
penalty  is  remitted  —  no  discount. 

California. —  Due  at  death,  no  interest  until  18  months, 
after  that  10  per  cent,  from  date  of  death,  in  case  of 
unavoidable  delay  may  be  reduced  to  7  per  cent.  If  paid 
within  6  months  5  per  cent,  discount. 

Colorado. —  Due  at  death,  after  one  year  interest  at  10 
per  cent,  from  date  of  death,  discount  of  5  per  cent,  if 
paid  within  6  months. 

Connecticut. —  Due  14  months  after  death;  after  that 
interest  at  9  per  cent,  but  court  may  extend  time  of  pay- 
ment. No  discount. 


472  INHERITANCE  TAXATION 

Delaware. —  Taxes  payable  within  13  months.  No  pro- 
vision for  interest.  Legal  rate  is  6  per  cent.  No  discount. 

Georgia. —  Due  at  death,  no  interest  until  after  12 
months  then  from  date  of  death.  No  rate  specified.  Legal 
rate  7  per  cent. 

Hawaii. —  Due  at  death.  No  interest  for  18  months; 
after  that  10  per  cent,  from  date  of  death  which  may  be 
reduced  to  7  per  cent,  in  case  of  unavoidable  delay.  Dis- 
count of  5  per  cent,  if  paid  within  one  year. 

Idaho. —  Due  at  death.  No  interest  until  after  one  year ; 
then  10  per  cent,  reduced  to  6  per  cent,  in  case  of  unavoid- 
able delay.  Discount  of  5  per  cent,  if  paid  within  six 
months. 

Illinois. —  Taxes  due  at  death  and  interest  at  6  per  cent, 
charged  from  that  time  unless  paid  within  6  months  when 
no  interest  charged  and  a  discount  of  5  per  cent,  allowed. 

Indiana. —  Tax  due  at  death.  No  interest  for  18  months ; 
after  that  10  per  cent,  from  date  of  death,  discount  of 
15  per  cent,  if  paid  within  one  year. 

Iowa. —  At  death,  no  interest  for  18  months;  after  that 
8  per  cent,  from  date  of  death. 

Kansas. —  One  year  from  death  except  gifts  in  contem- 
plation of  death  on  which  tax  accrues  at  date  of  gift.  No 
provision  as  to  interest.  Legal  rate  is  6  per  cent. 

Kentucky. —  Due  at  death.  No  interest  for  18  months, 
after  that  10  per  cent,  from  date  of  death ;  may  be  reduced 
to  6  per  cent,  in  case  of  unavoidable  delay.  Discount  of 
5  per  cent,  if  paid  within  9  months. 

Louisiana. —  Due  6  months  after  death  from  which  time 
2  per  cent,  a  month  until  paid  but  court  may  remit  interest 
in  case  of  litigation  or  unavoidable  delay.  No  discount. 

Maine. —  Due  two  years  after  death,  after  that  6  per 
cent,  interest.  No  discount. 

Maryland. —  No  interest  until  after  12  months,  then  6 
per  cent,  from  date  of  death.  No  discount. 


PART  VI  —  THE  STATUTES  473 

Massachusetts. —  Due  within  one  year  after  the  executor 
or  administrator  qualifies;  after  that  interest  is  charged. 
Bate  not  specified.  Legal  rate  5  per  cent.  No  discount. 

Michigan. —  Due  at  death,  no  interest  for  18  months; 
after  that  8  per  cent.,  may  be  reduced  to  6  per  cent,  in  case 
of  unavoidable  delay.  Discount  of  5  per  cent,  if  paid 
within  one  year. 

Minnesota. —  Due  at  death,  no  interest  charged  for  one 
year,  after  that  7  per  cent,  from  date  of  death,  may  be 
reduced  to  6  per  cent,  in  case  of  unavoidable  delay.  No 
discount. 

Missouri. —  Due  at  death.  No  interest  for  six  months, 
after  than  6  per  cent,  from  date  of  death.  If  not  paid 
within  one  year  executor  must  file  a  bond.  No  discount. 

Montana. —  Due  at  death.  No  interest  for  10  months, 
after  than  10  per  cent.,  reduced  to  7  per  cent  from  18 
months  after  death  in  case  of  unavoidable  delay.  If  paid 
within  6  months  discount  of  3  per  cent. 

Nebraska. —  Due  at  death  with  interest  at  7  per  cent., 
but  if  paid  within  one  year  interest  rebated.  No  discount. 

Nevada. —  Due  at  death,  no  interest  until  after  18 
months,  then  10  per  cent,  from  date  of  death  unless 
unavoidable  delay,  then  7  per  cent.  If  paid  within  6- 
months,  discount  of  5  per  cent. 

Neiv  Hampshire. —  Due  two  years  after  executor  or 
administrator  qualifies  by  giving  bonds.  No  interest  until 
then,  after  that  10  per  cent.  No  discount. 

New  Jersey. —  Due  at  death,  no  interest  for  one  year, 
after  that  10  per  cent,  from  end  of  year  which  may  be 
reduced  to  6  per  cent,  in  case  of  unavoidable  delay.  If 
paid  within  6  months  5  per  cent,  discount. 

New  York. —  Due  at  date  of  transfer.  No  interest  for  18 
months,  after  that  10  per  cent.,  which  may  be  reduced  to 
6  per  cent,  in  case  of  unavoidable  delay.  Discount  of  5 
per  cent,  if  paid  within  6  months. 


474  INHERITANCE  TAXATION 

North  Carolina. —  Due  at  death,  no  interest  for  one 
year,  after  that  6  per  cent,  for  one  year  and  after  two 
years  10  per  cent,  and  2y2.  per  cent,  additional  for  sheriff's 
fees.  If  paid  within  six  months  a  discount  of  2y2  per  cent, 
allowed. 

North  Dakota. —  Due  at  death,  no  interest  for  one  year, 
after  that  10  per  cent,  from  date  of  accrual,  which  may  be 
reduced  to  6  per  cent,  in  case  of  unavoidable  delay,  until 
cause  of  delay  is  removed,  then  10  per  cent.  No  discount. 

Ohio. —  Due  at  death.  No  interest  for  one  year.  After 
that  8  per  cent.  Discount  of  one  per  cent,  for  each  full 
month  the  payment  anticipates  the  lapse  of  one  year. 

Oklahoma. —  Due  at  death.  Except  contingent  remain- 
ders which  are  due  when  beneficiaries  get  property.  Ten 
per  cent,  interest  charged  from  date  when  due.  No 
discount. 

Oregon. —  Due  at  death.  No  interest  for  8  months,  then 
8  per  cent,  from  death,  which  may  be  reduced  to  6  per  cent, 
in  case  of  unavoidable  delay.  If  paid  within  8  months 
discount  of  5  per  cent. 

Pennsylvania. —  Due  at  death.  No  interest  for  one  year, 
after  that  12  per  cent.,  which  may  be  reduced  to  6  per  cent, 
in  case  of  unavoidable  delay.  Discount  of  5  per  cent,  if 
paid  within  3  months. 

Rhode  Island. —  Due  6  months  after  executor  or  admin- 
istrator has  filed  his  bond.  After  9  months  interest 
charged  at  8  per  cent,  which  may  be  reduced  to  6  per  cent, 
in  case  of  unavoidable  delay.  Discount  of  4  per  cent,  if 
paid  within  the  6  months. 

South  Dakota. —  Due  at  death,  payable  as  soon  as  deter- 
mined. No  interest  until  one  year  from  death,  then  7  per 
cent,  from  date  of  death,  which  may  be  reduced  to  6  per 
cent,  in  case  of  unavoidable  delay.  No  discount. 

Tennessee. —  Due  one  year  after  death.  No  interest 
until  then,  after  that  6  per  cent.  If  paid  within  3  months 
after  death  discount  of  5  per  cent. 


PART  VI  —  THE  STATUTES  475 

Texas. —  Due  at  death  with  interest  from  that  date 
unless  paid  within  6  months  when  interest  is  rebated.  No 
rate  prescribed  but  legal  rate  is  6  per  cent.  No  discount. 

Utah. —  Due  at  death  but  no  interest  for  15  months, 
after  that  8  per  cent,  but  time  may  be  extended  by  court 
or  in  case  of  nonresidents  by  attorney  general. 

Vermont. —  Due  two  years  after  death.  No  rate  pre- 
scribed for  interest  after  that.  Legal  rate  is  6  per  cent. 

Virginia. —  Executor  or  administrator  must  pay  10  per 
cent  interest  if  he  deliver  share  or  legacy  without  paying 
the  tax  and  property  deemed  delivered  within  one  year 
unless  shown  that  legatee  has  neither  received  the  prop- 
erty nor  is  entitled  to  demand  it.  No  discount. 

Washington. —  Due  at  death.  No  interest  for  15  months. 
After  15  months  8  per  cent,  except  in  case  of  unavoidable 
delay  when  8  per  cent,  is  charged  only  after  cause  of  delay 
has  been  removed.  No  discount. 

West  Virginia. —  Due  on  assessment.  After  that  inter- 
est at  4  per  cent.  No  discount. 

Wisconsin. —  Due  at  death.  No  interest  for  18  months ; 
after  that  10  per  cent,  from  date  of  death  which  may  be 
reduced  to  6  per  cent,  in  case  of  unavoidable  delay.  If 
paid  within  one  year  discount  of  5  per  cent. 

Wyoming. —  Due  at  death.  Interest  at  6  per  cent,  after 
6  months  from  date  of  death.  If  paid  before  6  months  dis- 
count of  5  per  cent. 

All  of  the  statutes  make  provision  for  the  collection  of 
delinquent  taxes  by  the  attorney  general  or  district  attor- 
ney. 

k.    BANKS  AND  TRUST  COMPANIES. 

Most  of  the  states  make  stringent  regulations  as  to  the 
disclosure  by  banks  and  trust  companies  of  assets  belong- 
ing to  decedents.  They  are  generally  required  to  notify 
the  state  treasurer  or  comptroller  ten  days  before 
delivering  any  property  to  an  executor  or  administrator 


476  INHERITANCE  TAXATION 

and  they  are  sometimes  required  to  hold  enough  of  the 
assets  in  their  hands  to  pay  the  tax.  The  bank  or  trust 
company  violating  these  provisions  is  penalized  and  held 
liable  for  the  tax.  Some  of  the  states  extend  this  pro- 
vision to  all  corporations  within  the  state,  making  them 
liable  for  the  tax  if  they  transfer  stock  of  nonresident 
decedents  on  their  books  without  notifying  the  taxing 
officer. 

1.  THE  INTEREST  TAXED. 

The  early  statutes  imposed  inheritance  taxes  upon  the 
entire  estate  of  the  decedent;  but  all  the  states  but  Utah 
now  impose  the  tax  upon  the  share  of  each  beneficiary. 
Rhode  Island,  in  its  statute  of  1916,  which  is  in  many 
respects  a  model  law,  imposes  two  taxes, —  first  a  tax  of 
one-half  of  one  per  cent,  upon  the  entire  estate  "  for  the 
right  to  transfer  "  and  second  graded  taxes  upon  the 
beneficial  shares  "  for  the  right  to  receive." 

2.  Wherein  They  Differ. 

As  we  have  seen  the  general  plan  of  the  statutes  is 
identical  and  the  procedure  for  assessment  and  collection 
varies  more  in  detail  than  in  essentials.  In  the  matter 
of  rates  and  exemptions  and  in  the  policy  adopted  as  to 
transfers  by  non-resident  decedents  the  divergencies  are 
radical.  In  the  matter  of  non-residents  the  conflicting 
theories  and  conflicting  statutes  often  impose  oppressive 
double  taxation  on  the  one  hand,  while,  on  the  other,  large 
estates  frequently  escape  the  tax  altogether. 

a.     COLLATERALS  AND  STRANGERS  ONLY. 

The  early  statutes  in  all  the  states  taxed  only  transfers 
to  collaterals  and  strangers.  The  following  states  still 
preserve  this  policy  and  impose  no  tax  on  a  transfer  to 
direct  heirs.  Iowa,  Kansas,  Kentucky,  Maryland,  Ohio, 
and  Texas. 


PART  VI  —  THE  STATUTES  477 

The  other  states  all  tax  transfers  to  direct  heirs  and 
grade  the  rates  according  to  degrees  of  relationship. 
The  bequests  to  collaterals  and  strangers  are  universally 
taxed  at  a  higher  rate  than  the  others. 

b.  NON-RESIDENT  DECEDENTS. 

Thirty  states  tax  transfers  of  all  property  within  the 
state  by  non-resident  decedents. 

Michigan  and  Montana  tax  all  but  real  estate  of  non- 
residents. 

Massachusetts,  New  Hampshire,  Rhode  Island,  and 
Vermont  tax  the  real  estate  only. 

Arkansas,  Connecticut,  Indiana,  New  York,  New 
Jersey,  Pennsylvania,  and  Oklahoma  attempt  to  distin- 
guish between  "  tangible  "  and  "  intangible  "  property 
and  tax  only  the  tangibles  of  non-residents. 

c.  TANGIBLES  AND  INTANGIBLES. 

Pennsylvania  arrives  at  this  result  by  legal  construc- 
tion, its  courts  holding  that  the  movables  of  non-resi- 
dents "  follow  the  domicile  of  their  owner  '•  but  that 
"  tangible  "  assets  have  a  situs  within  the  state  apart 
from  their  owner. 

New  York  in  1911  enacted  the  Pennsylvania  doctrine 
into  law  upon  the  theory  that  the  other  states  would  fol- 
low its  lead;  but  only  a  few  have  done  so  and  New  York 
meanwhile  is  drifting  away  from  the  legal  results  of  the 
theory.  By  subsequent  amendments  it  now  taxes  stock 
of  non-resident  corporations  owning  real  estate  in  New 
York,  as  it  was  found  that  large  non-resident  real  prop- 
erty owners  were  incorporating  their  holdings.  The 
whole  of  a  non-resident  interest  in  a  co-partnership  is 
now  taxed  and  an  attempt  has  been  made  to  define  a 
resident  as  a  person  who  stays  in  the  state  a  few  months 
each  year.  This  has  just  met  with  failure  before  a  New 
York  surrogate  in  the  case  of  the  estate  of  the  late  Hettie 


478  INHERITANCE  TAXATION 

Green  whose  domicile  was  in  Vermont  which  taxed  only 
collateral  bequests  —  her  entire  estate  thus  escaping  the 
tax  if  the  decision  is  sustained.  It  is  instances  like  this 
that  lead  to  the  other  extreme  of  double  taxation. 

Arkansas,  New  Jersey,  and  Oklahoma,  while  ostensibly 
accepting  the  doctrine  of  "  tangibles  "  define  them  to 
include  stock  in  domestic  corporations  owning  tangibles 
within  the  state  which  practically  defines  away  the 
definition. 

d.     RECIPROCAL  STATUTES. 

The  plan  of  attempting  to  control  the  policy  of  sister 
states  by  offering  rewards  or  penalizing  its  inhabitants 
has  been  tried  in  Connecticut  and  Massachusetts,  but  those 
states  have  abandoned  the  idea.  Massachusetts  however 
exempts  property  of  her  own  resident  decedents  when  it 
is  taxed  in  another  state,  unless  the  tax  is  less  than  that 
of  Massachusetts,  when  the  beneficiary  must  pay  the 
difference.  In  this  she  has  been  followed  by  West  Vir- 
ginia. This  would  seem  to  be  a  step  toward  the  only 
possible  solution. 

Maine  exempted  transfers  of  personal  property  within 
that  state  by  non-resident  decedents  who  were  domiciled 
in  states  that  do  not  tax  similar  transfers  by  residents 
of  Maine,  but  this  provision  was  repealed  by  Ch.  266,  L. 
1917. 

Nx>rth  Dakota  and  Wisconsin  exempt  tangible  property 
of  their  own  residents  located  in  another  state  if  that 
state  makes  a  like  exemption  to  its  own  residents  as  to 
tangibles  in  North  Dakota  and  Wisconsin.  Whether 
these  provisions  are  sufficiently  reciprocal  with  those  of 
Maine,  Massachusetts  and  West  Virginia  has  not  yet  been 
determined  and  the  question  might  prove  a  source  of 
interesting  litigation. 

Reciprocal  provisions  have  proved  a  failure  or  have  not 
been  adopted  by  a  sufficient  number  of  states  to  be  useful. 


PART  VI  —  THE  STATUTES  479 

e.    DOUBLE  TAXATION. 

Three-fourths  of  all  the  states  now  tax  property  of 
non-residents  transferred  within  the  state  and  the  trend 
of  the  new  statutes  has  been  in  that  direction,  particu- 
larly in  the  western  states.  This  confessedly  results  in 
double  taxation ;  but  the  other  theory  permits  large  estates 
to  escape  without  paying  any  tax.  Three-fourths  of  the 
states  having  abolished  the  legal  fiction  that  movables  fol- 
low the  person  as  to  non-residents;  it  remains  for  each 
state  to  follow  the  example  of  Massachusetts  and  West 
Virginia  and  relieve  its  own  inhabitants  from  double  tax- 
ation by  exempting  them  when  they  have  paid  inheri- 
tance taxes  in  another  state  of  an  equal  or  greater  amount. 

If  all  personal  property  is  taxed  at  its  physical  situs 
upon  transfer  by  a  decedent,  double  taxation  would  be 
avoided  and  but  few  estates  could  escape  it  scot  free. 

3.  As  Producers  of  Revenue. 

The  only  legitimate  object  of  taxation  is  to  produce 
revenue  and  generally  its  purpose  is  to  produce  as  much 
revenue  as  possible  with  the  least  inconvenience  and  bur- 
den to  the  community.  The  prime  factors  governing  the 
amount  of  revenue  to  be  derived  from  inheritance  taxes 
are  the  rates  of  tax  and  exemptions. 

a.     THE  RATE. 

Generally  the  rate  is  small  to  near  relatives-  and  higher 
as  to  collaterals  and  strangers  and  increases  in  propor- 
tion to  the  amount  of  the  bequest  or  distributive  share. 
The  tax  on  transfers  to  collaterals  and  strangers  in  some 
states  runs  as  high  as  30%  on  amounts  in  excess  of  one 
million  and  usually  to  15%. 

While  this  is  picturesque  and  typifies  the  popular 
notion  that  the  government  can  be  maintained  by  sharing 
in  bonanzas  to  remote  relatives  this  touch  of  romance  in 
the  tax  statutes  fails  to  produce  much  revenue. 


480  INHERITANCE  TAXATION 

A  tax  of  five  per  cent,  on  all  bequests  or  shares  in 
excess  of  $100,000  and  graded  down  from  that  point  will 
produce  a  large  and  steady  income  to  the  state,  while 
excessive  rates  on  mythical  millions  only  bring  cash  into 
the  treasury  on  the  advent  of  an  earthquake  or  a  Titanic 
disaster. 

b.     EXEMPTIONS. 

The  .tendency  has  been  to  increase  the  number  and 
amount  of  exemptions.  This  has  also  tended  to  make  the 
tax  a  failure  as  a  producer  of  revenue. 

In  this  connection  the  following  excerpt  from  the  report 
of  Comptroller  Travis  of  New  York  for  1915  is  significant: 

The  net  receipts  from  inheritance  taxes  for  the  fiscal 
year  ended  September  30,  1914,  was  $11,162,478.40. 

There  were  8,947  reports  of  appraisal  examined  and 
filed  and  11,608  orders  received  from  the  surrogates' 
courts  of  the  several  counties  of  this  state. 

The  small  percentage  of  estates  subject  to  the  graded 
rates  of  tax,  as  shown  by  the  appraisals  for  the  past  two 
years,  justifies  me  in  calling  to  your  attention  the  neces- 
sity of  reducing  both  the  exemptions  allowed  on  individual 
transfers,  as  well  as  the  several  limitations  beyond  which 
the  next  higher  rate  of  tax  becomes  effective,  if  the  state 
is  to  receive  annually  from  this  source  of  revenue  the 
amount  of  tax  that  the  present  statute  was  expected  to 
produce. 

From  1892  till  July  11, 1910,  individual  transferees  were 
not  allowed  an  exemption  of  any  amount  whatsoever  if 
the  whole  estate  exceeded  $10,000  and  passed  to  those  in 
the  one  per  cent,  class,  or  exceeded  $500  and  some  part 
thereof  passed  to  persons  in  the  five  per  cent,  class. 

By  the  amendment  of  1910  a  father,  mother,  widow  or 
minor  child  was  given  an  exemption  of  $5,000.  The  other 


PAST  VI — THE  STATUTES  481 

persons  in  the  one  per  cent,  class  were  allowed  an  exemp- 
tion of  $500,  and  those  in  the  five  per  eent.  class  an  exemp- 
tion of  $100. 

Under  the  present  statute  (Chapter  732,  Laws  of  1911) 
each  person  in  the  one  per  cent,  class  is,  given  an  exemp- 
tion of  $5,000,  and  those  in  the  five  per  cent,  class  are 
given  an  exemption  of  $1,000. 

Owing  to  the  present  large  exemptions  almost  every 
estate  between  $10,000  and  $30,000  where  the  property 
passes  to  those  in  the  one  per  cent,  class  is  wholly  exempt. 
This  amendment  eliminates  from  twenty-five  to  forty  per 
cent,  of  the  estates  in  most  of  the  counties  of  the  state 
which  under  the  old  law  would  have  been  taxable. 

The  statute  still  recognizes  two  classes  of  taxable  per- 
sons. Persons  related  to  the  decedent  as  a  father,  mother, 
brother,  sister,  wife  or  widow  of  a  son  or  the  husband  of 
a  daughter,  lineal  descendants,  etc.,  are  referred  to  as  the 
one  per  cent,  class,  while  transfers  to  more  remote 
relatives,  such  as  uncle,  aunt,  nephew,  niece,  cousin,  or 
to  persons  unrelated,  are  referred  to  as  the  five  per  cent, 
class. 

The  present  limitations  of  $50,000,  $250,000  and  $1,000,- 
000  upon  which  the  corresponding  progressive  rate  per 
cent,  is  computed  are  purely  arbitrary  amounts  placed  in 
the  statute  without  the  knowledge  since  gained  that  in 
almost  every  million  dollar  estate  the  individual  transfer 
seldom  reaches  the  maximum  of  the  present  two  per  cent, 
rate. 

The  amendments  to  the  statute  in  1916  by  the  New 
York  legislature  were  adopted  in  view  of  the  fact  that  the 
receipts  had  fallen  from  thirteen  millions  in  1913  to  seven 
millions  in  1916,  nearly  50  per  cent  The  effect  of  the 
amendment  is  already  beginning  to  be  felt  in  increased 
revenue.  The  proceeds  for  1917  were  $13,791,000  under 
the  1916  amendment. 
16 


482 


INHERITANCE  TAXATION 


c.     FACTS  AS  TO  REVENUE. 

The  revenue  in  1913  produced  by  the  inheritance  tax 
statutes  of  the  several  states  which  then  imposed  such 
taxes  is  shown  by  the  following  table: 

TABLE    SHOWING    INHERITANCE    TAX    RECEIPTS   IN    STATES 
LEVYING  SUCH  TAXES  IN  1913. 

Arkansas  $23,665 

California 1,586,875 

Colorado 224,406 

Connecticut 1,080,483 

Delaware  8,381 

Idaho   5,036 

Illinois  1,612,818 

Iowa 280,733 

Kansas 170,234 

Kentucky   99,224 

Louisiana  207,004 

Maine 275,318 

Maryland 289,332 

Massachusetts .• 2,154,407 

Michigan   360,898 

Minnesota   678,455 

Missouri   .479,517 

Montana 8-,959 

*Nebraska  100,000 

New  Hampshire 173,415 

New  Jersey 748,086 

New  York 12,153,189 

North  Carolina • 5,265 

Oklahoma 4,865 

Ohio  225,507 

Oregon   ' 74,269 

Pennsylvania  2,064,300 

South  Dakota 9,781 

Tennessee 210,381 

Texas       47,574 

Utah   242,800 

Vermont   78,593 

Virginia 43,392 

Washington    186,231 

West  Virginia 168,234 

Wisconsin 924,736 

Wyoming 361 

Total $27,006,697 

*  Estimated. 


PART  VI  —  THE  STATUTES  483 

California,  Connecticut,  Illinois,  Massachusetts  and 
Pennsylvania  collected  a  total  of  $8,498,883. 

Wisconsin,  Minnesota,  New  Jersey,  Missouri,  and 
Michigan  a  total  of  $3,191,692,  making  $11,690.575  for  the 
ten  states  while  New  York  collected  $12,153,189. 

The  total  collections  in  all  the  other  states  totaled  only 
$3,162,933. 

Under  increased  rates  California  jumped  from  $1,586,- 
000  in  1913  to  $2,783,000  in  1915  and  now  collects  over 
$3,000,000.  Wisconsin,  also,  has  about  doubled  her 
receipts. 

But  while  these  amendments  have  increased  the  rates 
and  made  the  penalties  more  severe  little  has  been  done 
to  make  the  collection  of  the  tax  more  efficient.  Few  of 
the  states  make  any  appropriation  for  the  expenses  of 
collection  or  provide  the  collecting  officers  with  adequate 
legal  assistance.  The  result  is  as  should  be  expected. 
Every  estate  of  taxable  proportions  has  astute  and  vigi- 
lent  attorneys  employed  to  minimize  the  tax  or  evade  it 
if  possible.  Several  of  the  states  have  in  the  last  year 
amended  their  statutes  to  authorize  the  employment  of 
one  special  transfer  tax  attorney.  New  York  has  over 
one  hundred  attorneys  so  employed,  and  such  states  as 
California,  Wisconsin  and  Illinois  where  a  comparatively 
large  revenue  is  secured  are  following  her  example,  with 
the  result  that  the  increased  revenue  is  out  of  all  propor- 
tion to  the  extra  cost. 

As  a  producer  of  revenue  inheritance  taxation  is  still 
in  the  state  of  experiment.  Its  purpose  too  often  seems 
to  be  to  punish  the  "  idle  rich  "  and  goad  them  into 
evasion  and  tax  dodging  rather  than  to  take  even  ordinary 
precautions  to  make  the  collection  of  the  tax  sure. 

Moderate  rates  and  efficient  provisions  for  collection 
would  seem  to  be  the  recommendation  of  experience. 


484  INHERITANCE  TAXATION 

An  abstract  of  all  the  state  statutes  with  the  important 
sections  in  full  and  the  rest  carefully  digested  is  given 
in  the  Appendix. 

B.— THE  FEDERAL  STATUTE 
1.  History  and  Development. 

Inheritance  taxes  have  been  imposed  by  the  United 
States  government  only  under  pressure  of  emergency 
caused  by  war,  and  have  been  repealed  as  soon  as  that 
pressure  was  removed,  on  the  theory  that  such  taxes  were 
primarily  a  source  of  revenue  tacitly  reserved  to  the 
state  governments  for  their  support.  Four  times  in  its 
history,  war  conditions  have  produced  such  taxes.  They 
may  be  known  as  the  Revolutionary  war  tax,  enacted  in 
1797  and  repealed  in  1802;  the  Civil  war  tax,  enacted  in 
1862  and  repealed  in  1870;  the  Spanish  war  tax,  enacted 
in  1898  and  repealed  in  1902;  and  the  present  German 
war  tax  enacted  September  8, 1916,  and  amended  March  3, 
1917. 

a.     THE  REVOLUTIONARY  WAR  TAX. 

This  was  enacted  July  6,  1797,  as  a  stamp  duty,  the 
stamps  being  affixed  to  receipts  given  by  the  legatee  to 
the  executor  —  Chap.  11,  1  Stat.  527.  The  statute  closely 
followed  the  legacy  duty  imposed  in  the  mother  country. 
It  was  paid  by  the  legatee  and  not  out  of  the  estate.  The 
act  was  repealed  as  soon  as  the  country  somewhat 
recovered  from  the  war  debt  pressure,  the  repealing  act 
being  Chapter  17,  2  Stat.  148,  June  30,  1802. 

It  had  none  of  the  features  of  the  more  recent  inheri- 
tance tax  statutes  and  was  strictly  speaking  more  to  be 
classed  as  a  duty  or  impost  than  a  tax.  It  imposed  a  fee 
of  25  cents  on  legacies  from  $50  to  $100 ;  50  cents  on  lega- 
cies from  $100  to  $500;  and  $1.00  additional  for  every 
additional  $500. 


PART  VI  —  THE  STATUTES  485 

b.  THE  CIVIL  WAR  TAX. 

For  sixty  years  the  Federal  government  ignored  this 
source  of  revenue  but  was  once  more  driven  to  it  by  the 
conditions  in  1862.  By  Chapter  119,  12  Stat.  433,  485, 
another  inheritance  tax  was  imposed. 

This  was  also  a  legacy  and  probate  stamp  tax,  closely 
following  an  English  model  of  that  date.  It  involved  as 
well  as  the  tax  on  the  legacy  a  probate  tax  on  the  entire 
estate. 

This  statute  also  was  different  in  theory  and  in  manner 
of  collection  from  any  of  the  modern  inheritance  tax 
statutes. 

This  tax  ranged  from  50  cents  to  $20  on  estates  valued 
at  from  $50,000  to  $100,000  and  $10  for  every  additional 
$50,000  or  part  thereof. 

The  act  was  amended  in  1864  and  1866  and  was  repealed 
July  14,  1870,  by  Chapter  255,  Stat.  1870. 

c.  THE  SPANISH  WAR  TAX. 

This  statute  enacted  June  13, 1898,  30  U.  S.  Stat.  p.  464, 
and  was  amended  March  2,  1901,  31  U.  S.  Stat.  p.  946,  to 
exempt  charitable  corporations  and  regulating  procedure. 
It  was  repealed  April  12,  1902,  and  taxes  on  charitable 
bequests  collected  between  1898  and  1901  were  refunded 
by  32  U.  S.  Stat.  p.  406. 

The  act  was  a  tax  on  beneficiaries  for  the  right  to 
receive  and  was  modeled  after  the  pattern  of  many  of 
the  state  statutes  now  in  force.  It  taxed  only  personal 
property  passing  by  will,  intestate  laws  or  "  deed,  grant, 
bargain,  sale  or  gift  made  or  intended  to  take  effect  in 
possession  or  enjoyment  after  the  death  "  of  the  grantor, 
etc. 

It  did  not  tax  estates  valued  at  less  than  $10,000.  When 
they  exceeded  that  sum  a  tax  was  levied  on  the  whole 
amount  at  these  rates. 


486  INHERITANCE  TAXATION 

TABLE  OF  RATES  UNDER  FEDERAL  ACT  OF  1898 


CLASS  OR  RELATIONSHIP 

GRADED  RATES  OF  TAX 

Up  to 
25,000 

25,000 
to 
100,000 

100,000 
to 
500,000 

500,000 
to 
1,000,000 

In  excess 
of 
1,000,000 

Lineal    issue,    lineal    ancestor,    brother    or 
sister  

Per  cen 

$ 

4 
5 

Per  cent 
11 

IS 

6 

7i 

Per  cent 

tf 

3 
6 

8 
10 

Per  cent 
2i 

s 

10 
12* 

Per  cent 
2i 

t1 

12 
15 

Descendant  oi  brother  or  ister  

Aunt  or  uncle  and  their  descendants  

Brother  or  sister  of  grand  parents  and  their 
descendants  

Inheritances  of  the  husband  or  wife  were  altogether 
exempt  and  by  act  of  1901  all  charitable,  religious,  edu- 
cational, etc.,  bequests  were  exempted. 

These  taxes  were  superimposed  over  and  above  the 
taxes  collected  by  the  states  and  it  will  be  observed  that 
rates  which,  when  imposed  by  the  states,  are  denounced 
as  "  confiscatory, "  were  charged  and  collected. 

It  should  be  borne  in  mind  however  that  under  this  tax 
real  estate  was  exempted  altogether  thus  reducing  the 
size  of  all  estates  liable  to  the  tax;  and  that  there  was 
no  attempt  to  tax  contingent  remainders. 

Vanderbilt  v.  Eidman,  196  U.  S.  480;  25  S.  Ct.  331. 
Herold  v.  Shanley,  146  Fed.  20;  76  C.  C.  A.  478. 
Heberton  v.  McClain,  135  Fed.  226. 
Brown  v.  Kinney,  137  Fed.  1018. 

2.  Doubtful  Constitutionality. 

Pressure  caused  by  war  conditions,  particularly  the  fall- 
ing off  of  the  taxable  imports  and  the  necessary  prepara- 
tions for  defense,  caused  the  Federal  government  once 
more  to  resort  to  estates  as  a  source  of  revenue.  By 
the  revenue  act  approved  September  8,  1916,  the  present 
tax  was  enacted  and  was  amended  March  3,  1917,  by 
greatly  increasing  the  rates  which  run  up  to  15  per  cent,  on 
estates  in  excess  of  five  million. 


PART  VI  —  THE  STATUTES  487 

The  distinguishing  feature  of  the  present  Federal 
statute  is  that  it  proceeds  upon  a  different  theory  from 
all  prior  Federal  inheritance  taxes  and  from  that  of  all 
but  two  of  the  states. 

It  levies  the  tax  on  the  entire  estate  of  the  decedent 
without  reference  to  the  beneficiaries  or  their  interests. 
It  includes  real  estate  as  well  as  personal  property  in 
determining  the  value  of  the  "  net  estate  "  subject  to 
the  tax  and  makes  one  general  exemption  of  $50,000  which 
is  to  be  deducted  from  any  estate  before  a  tax  is  imposed 
as  well  as  all  debts,  funeral  expenses  and  the  like,  that 
are  allowed  by  the  laws  of  the  state  wherein  the  estate  is 
administered. 

It  makes  no  exemptions  to  charitable,  educational  or 
religious  institutions,  being  regarded  as  an  "  estate  tax  " 
and  not  a  tax  on  the  transfer  to  such  institutions. 

Another  unusual  feature,  and  one  that  seems  to  violate 
every  constitutional  principle,  is  that  it  makes  no  pro- 
vision for  notice  or  a  hearing  but,  on  the  contrary,  requires 
that  the  executor  shall  notify  the  collector  instead  of  the 
collector  notifying  the  executor!  This  is  an  anomaly  in 
tax  legislation.  The  obvious  defect  may,  perhaps,  be 
remedied  by  the  treasury  department,  which  is  empowered 
to  make  regulations  for  the  enforcement  of  the  law,  but 
thus  far  no  such  provision  has  been  made. 

The  whole  scheme  of  the  law  would  seem  to  be  to  impose 
oppressive,  if  not  confiscatory  rates,  on  large  estates, 
with  no  provision  for  the  adjustment  of  burdens. 

The  unfortunate  error  of  imposing  oppressive  taxation 
rather  than  efficient  taxation  must  inevitably  bear  fruit  in 
a  mass  of  litigation  with  disappointing  results  in  the 
amount  of  revenue  derived. 

It  is  to  be  regretted  that  the  Congress  did  not  see  fit 
to  re-enact  the  statute  of  1898.  This  law  had  been  inter- 
preted by  the  courts,  its  constitutionality  sustained,  and 


488  INHERITANCE  TAXATION 

its  practical  workings  tested  by  experience.  If  it  failed 
to  produce  sufficient  revenue  the  fault  was  in  extensive 
exemptions  and  also,  doubtless,  in  lack  of  efficiency  in 
enforcement  —  and  possibly  in  an  exaggerated  notion  as 
to  the  amount  of  revenue  to  be  derived  from  the  devolution 
of  large  estates.  The  vast  bulk  of  the  country's  wealth  is 
in  the  hands  of  people  of  moderate  means.  No  tax  will 
produce  a  large  revenue  which  does  not  reach  the  pocket- 
books  of  the  masses-. 

It  is  "  not  an  Inheritance  Tax."  Art.  IV,  Department 
Eegulations  (see  post).  That  is  to  say  the  tax  is  on 
the  right  to  transmit  property  from  the  dead,  not  on  the 
right  to  receive  it. from  the  dead.  It  is,  therefore,  not  a 
tax  upon  the  succession  or  inheritance,  but  is  imposed 
upon  the  estate.  No  provision  is  made  for  adjusting  the 
burden  of  the  tax  among  the  beneficiaries. 

But  the  right  to  transmit  at  death  is  not  a  privilege 
bestowed  by  the  Federal  government.  It  is  not  one  of  the 
powers  delegated  to  Congress  by  the  states  in  the  National 
Constitution. 

Matter  of  Becker,  26  Misc.  633;  57  Supp.  940. 

If  the  transfer  is  by  will  a  right  has  been  exercised  by 
the  decedent  and  is  logically  taxable;  but  if  no  will  is 
made ;  if  the  property  is  distributed  by  the  intestate  laws 
of  a  state;  under  what  theory  can  the  right  to  transmit  be 
taxed?  A  legatee  may  renounce  and  thus  escape  taxation. 
If  a  decedent  does  not  exercise  the  privilege  of  making  a 
will  it  is  difficult  to  see  how  any  transfer  tax  can  be 
imposed  upon  him,  or  his  property  by  reason  of  its  dis- 
tribution under  intestate  laws  with  the  operation  of  which 
he  has  no  concern. 

The  right  to  transfer  necessarily  involves  a  transferee 
and  in  case  of  intestacy  the  only  privilege  exercised  is 
the  privilege  of  receiving. 

Under  the  department's  ruling  the  Federal  "  Estate 


PAKT  VI  —  THE  STATUTES  489 

Tax  "  as  it  is  termed,  comes  very  near  to  being  a  tax  on 
property  and  hence  unconstitutional,  not  only  as  a  prop- 
erty tax  unequal  in  its  burdens  but  because  not  appor- 
tioned among  the  states  as  a  direct  tax. 

But  the  state  courts  must  concern  themselves  with  the 
distribution  of  the  burdens  of  the  tax  among  the  benefi- 
ciaries if  the  tax  is  to  be  enforced.  Unless  the  real  estate 
is  made  to  bear  its  share,  unless  the  specific  legatee  pays 
a  portion,  unless  the  burden  is  adjusted  between  the  life 
tenant  and  the  remainderman,  the  law  will  operate 
oppressively  and  unconstitutionally. 

Very  little  light  can  be  thrown  upon  these  problems  by 
the  decisions  under  the  former  Federal  statute  because 
that  statute  was  a  tax  on  the  right  to  receive  and  was 
paid  out  of  the  share  of  each  beneficiary. 

As  the  tax  is  not  due  until  a  year  after  death  and  as 
the  year  when  the  first  tax  is  due  will  not  expire  until 
September  8,  1917,  the  problems  which  the  practical 
administrations  of  the  law  presents  and  the  litigations 
which  must  grow  out  of  it  are  only  just  arising. 

Meanwhile  the  only  light  to  be  had  is  the  rulings  and 
regulations  of  the  treasury  department.  These  will  doubt- 
less be  materially  modified  as  their  effect  is  appreciated. 

To  illustrate :  The  rule  that  a  gift  made  in  contempla- 
tion of  death,  .though  made  years  prior  to  the  enactment 
of  the  Federal  statute,  is  taxable  under  it,  if  the  death 
occurred  after  its  passage,  is  clearly  unconstitutional  in 
its  construction  of  the  statute.  A  gift  inter  vivos,  passing 
title,  vests  in  interest  and  possession;  and  no  subsequent 
statute  can  tax  a  transfer  that  has  already  taken  place. 

Matter  of  Travis,  19  Misc.  393 ;  44  Supp.  349. 
Matter  of  Pell,  171  N.  Y.  48;  63.N.  E.  789. 
Matter  of  McKelway,  221  N.  Y.  15;  116  N.  E.  348. 

The  apportionment  of  the  tax  among  the  beneficiaries 
would  be  difficult  if  the  law  attempted  it.  Apparently 


490  INHERITANCE  TAXATION 

specific  legacies  will  escape  and  the  entire  tax  fall  on  the 
residuary  estate.  There  is  no  provision  for  apportioning 
the  tax  between  the  real  estate  and  the  personal  prop- 
erty, and  apparently  it  is  to  be  collected  out  of  the  per- 
sonalty if  there  is  sufficient  to  pay  it.  The  regulations  of 
the  treasury  department  thus  far  afford  no  solution,  if 
a  solution  is  to  be  had. 

Even  at  this  early  date  these  views  are  not  unsupported 
by  authority.  In  Matter  of  Bierstadt,  decided  by  the 
Appellate  Division  July  14,  1917,  the  question  at  issue 
was  whether  the  Federal  tax  was  to  be  deducted  from  the 
value  of  the  estate  subject  to  the  tax  levied  by  the  state 
of  New  York.  "The  attorney  for  the  executor  appellant 
urged  that  the  Federal  tax  was  not  on  the  succession  but 
was  plainly  a  tax  on  property  and  therefore  was  a  deduc- 
tion. The  court  held  that  if  this  was  so  the  Federal  tax 
was  unconstitutional!  The  court  said: 

"  Mary  S.  Bierstadt,  deceased,  left  a  will  by  which  she 
disposed  of  an  estate  valued  at  upwards  of  two  million 
dollars.  Of  this  estate  she  disposed  of  upwards  of  one 
million,  two  hundred  thousand  dollars  by  legacies  of 
specific  sums,  and  gave  the  residue  to  certain  named 
relatives.  No  complaint  is  made  of  the  assessment  of  the 
property  thus  devised  so  far  as  concerns  the  taxability  of 
the  several  transfers  under  the  State  Transfer  Tax  Law, 
except  that  the  executors-appellants  claim  that  the  tax 
to  be  paid  under  the  Federal  Revenue  Act  of  1916,  esti- 
mated to  amount  to  $57,309.58  should  be  deducted  from  the 
gross  estate  left  by  the  testatrix,  before  the  tax  due  under 
the  laws  of  the  State  of  New  York  is  calculated.  This 
claim  is  based  upon  the  proposition  that  the  tax  provided 
for  in  the  Federal  Revenue  Act  is  a  tax  upon  the  estate, 
as  such,  and  not  upon  the  transfer  of  the  property  under 
the  will  and  the  laws  of  this  state  of  which  the  deceased 
was  a  resident. 


PART  VI  —  THE  STATUTES  491 

"A  similar  claim  for  the  deduction  of  the  succession  tax 
levied  under  the  Federal  War  Revenue  Act  of  1898  was 
decided  adversely  to  the  claimant  in  Matter  of  Gihon 
(169  N.  Y.  443),  wherein  it  was  held  that  the  Federal 
Tax  was  not  a  tax  upon  the  property  transferred,  but  one 
upon  the  transfer  itself,  the  amount  of  the  tax  being 
measured  by  the  value  of  the  property  affected  by  the 
transfers.  If  therefore  the  tax  imposed  by  the  Act  of 
1916  is,  like  that  imposed  by  the  Act  of  1898,  a  tax  upon 
the  transfer  and  not  upon  the  property  transferred  the 
claim  of  the  executors  was  rightly  denied.  It  is  argued 
however  that  the  Federal  Revenue  Act  of  1916  differs 
radically  from  the  War  Revenue  Act  of  1898,  in  that  under 
the  Act  of  1916,  the  tax  is  imposed  distinctly  and  unequi- 
vocally upon  the  property  transferred,  and  that  by  no  con- 
struction can  it  be  held  to  be  merely  a  tax  -upon  the  trans- 
fer of  the  property.  Without  expressing  an  opinion  upon 
this  construction  of  the  Act,  it  will  suffice  to  say  that  if  it 
must  be  construed  as  the  executors  claim  that  it  must  be,  it 
would  be  invalid  on  constitutional  grounds  -and  no  tax 
could  lawfully  be  collected  under  it  (Knowlton  v.  Moore, 
178  N.  Y.  41;  Matter  of  Gihon,  supra).  If  so  it  would  be 
clearly  improper  to  deduct  it  from  the  gross  estate 
before  estimating  the  amount  of  the  tax  to  be  paid  under 
the  state  law. 

"  So  in  either  aspect  of  the  law,  whether  it  merely  pro- 
vided for  a  tax  upon  the  transfer  of  the  property,  or  pro- 
vides for  a  tax  upon  the  property  itself  which  is  trans- 
ferred, the  order  appealed  from  is  right.  It  is  quite 
apparent  that  the  executors  will  be  confronted  with 
serious  questions  which  must  be  decided  before  they  can 
safely  proceed  to  finally  distribute  the  estate.  With  those 
questions  however  we  are  not  now  concerned.  All  we  are 
called  upon  to  decide  is  that  the  executors  are  not  entitled 


492  iNHEKITAiSrCE   TAXATION 

to  deduce  from  the  gross  estate,  as  an  expense  of  admin- 
istration, the  estimated  tax  provided  for  in  the  Federal 
Revenue  Act  of  1916,  before  the  amount  of  the  tax  under 
the  state  law  is  fixed. 

"  The  order  appealed  from  is  affirmed  with  $10  costs 
and  disbursements. 

"All  concur." 

In  the  current  number  of  the  Trust  Companies  Maga- 
zine (July,  1917)  Mr.  Arthur  W.  Blakemore,  a  well 
recognized  authority  and  one  of  the  authors  of  "  Blake- 
more  &  Bankroft  "  on  Inheritance  Taxation  discusses  the 
constitutionality  of  the  Federal  Statute  as  follows : 

"  In  the  midst  of  a  great  war  it  would  be  unpatriotic  to 
attempt  to  attack  the  constitutionally  of  the  law.  No  court 
would  sustain  such  an  objection  presumably  as  in  time  of 
war  nothing  is  unconstitutional  as  a  practical  matter. 
But  after  peace  is  declared  it  is  reasonable  to  suppose 
that  the  law  may  be  attacked  and  with  fair  chance  of 
success.  Its  outstanding  feature  is  that  it  is  imposed  on 
the  estate  itself,  instead  of  on  the  shares  of  each  benefi- 
ciary, and  at  a  progressive  rate.  This  was  exactly  the 
sort  of  tax  which  Congress  attempted  to  impose  in  1898, 
but  which  the  Supreme  Court  construed  as  applying  to 
each  distributive  share,  giving  as  one  of  its  reasons  the 
crass  injustice  of  the  other  view.  The  court  remarks : 

"  *  The  gross  inequalities  which  must  inevitably  result 
from  the  admission  of  this  theory  are  readily  illustrated. 
Thus  a  person  dying,  and  leaving  an  estate  of  $10,500, 
bequeathes  to  a  hospital  $10,000.  The  rate  of  tax  would  be 
5  per  cent,  and  the  amount  of  tax  $500.  Another  person 
dies  at  the  same  time,  leaves  an  estate  of  $1,000,000,  and 
bequeathes  $10,000  to  the  same  institution.  The  rate  of 
tax  would  be  12*/>  per  cent,  and  the  amount  of  the  tax 
$1,250.  It  would  thus  come  to  pass  that  the  same  person, 
occupying  the  same  relation  and  taking  in  the  same  char- 
acter two  equal  sums  from  two  different  persons,  would 


PART  VI  —  THE  STATUTES  493 

pay  in  the  one  case  more  than  twice  the  tax  that  he  would 
in  the  other. 

Knowlton  v.  Moore,  178  U.  S.  41,  76,  983 ;  20  Sup.  St.  Rep.  747. 

"  The  act  of  1898  was  sufficiently  ambiguous  in  its  terms 
to  enable  the  court  to  avoid  by  construction  this  result. 
There  is  no  possible  ambiguity  in  this  respect  in  the  act 
of  1916.  It  is  clearly  and  unmistakably  a  tax  with  pro- 
gressive rates  based  on  the  size  of  the  estate  alone.  The 
Supreme  Court  will  be  forced  to  decide  squarely  the 
validity  of  such  a  method,  and  judging  by  its  past  utter- 
ances the  result  would  seem  extremely  doubtful.  It  should 
be  borne  in  mind  that  it  is  commonly  supposed  that  inheri- 
tance taxes  are  laid  on  the  right  to  receive  rather  than  on 
the  right  to  transmit,  that  there  is  already  sufficient 
authority  in  this  country  that  a  progressive  rate  dependent 
on  the  size  of  the  estate  is  void,  and  that  the  provisions 
of  the  Federal  Constitution  are  no  weaker  than  those  of 
the  State  Constitutions  on  which  these  decisions  in  the 
state  courts  are  based.  On  the  other  hand,  the  court  may 
take  the  view  that  Congress  may,  if  it  pleases,  levy  a  tax 
on  the  right  to  transmit  rather  than  on  the  right  to 
receive,  and  that  the  matter  of  injustice  and  inequality 
is  a  legislative  rather  than  a  judicial  question. 

"Another  objection  made  to  the  law  is  that  it  is  a  direct 
tax  on  the  property  of  the  estate,  and  should  therefore 
be  apportioned  among  the  several  states.  The  language 
of  the  act  is  that  the  tax  is  imposed  on  the  '  transfer  ' 
and  is  fixed  by  the  value  of  the  net  estate.  It  should  be 
noted,  however,  that  this  tax  certainly  comes  nearer  being 
a  direct  property  tax  than  any  other  yet  passed  in  this 
country.  The  official  returns  required  of  executors  ajsk 
only  for  a  detailed  property  statement  like  any  direct 
tax  return." 


494  INHERITANCE  TAXATION 

3.  Provisions  in  Detail, 
a,    THE  RATES 

The  rates  imposed  by  the  act  of  1916  upon  net  estates 
of  those  dying  after  September  8,  of  that  year  and  prior 
to  March  3, 1917,  are  as  follows : 

Up  to  $50,000  —  1   per  cent $500 

On  the  next      $100,000  —  2  per  cent 2.  000 

On  the  next      $100,000  —  3  per  cent 3.  000 

On  the  next      $200,000  —  4  per  cent 8.  000 

On  the  next      $550,000  —  5  per  cent 27,  500 

On  the  next  $1,000,000  —  6  per  cent 60,  000 

On  the  next  $1,000,000  —  7  per  cent 70.  000 

On  the  next  $1,000,000  —  8  per  cent 80.  000 

On  the  next  $1,000,000  —  9  per  cent 90.  000 

On  all  amounts  in  excess  of  $5,000,000  ten  per  cent. 

The  rates  established  by  the  amendment  of  March  3, 
1917  on  net  estates  of  those  dying  after  that  date  are  as 
follows : 

Up  to  $50,000 —  1%  per  cent $750 

On  the  next      $100,000  —    3       per  cent 3,  000 

On  the  next      $100,000  —    4%  per  cent 4,  500 

On  the  next      $200,000  —    6       per  cent 12.  000 

On  the  next      $550,000  —    7%   per  cent 41.  250 

On  the  next  $1,000,000  —    9       per  cent 90,  000 

On  the  next  $1,000,000  —  10V2  per  cent 105.  000 

On  the  next  $1,000,000  —  12       per  cent 120.  000 

On  the  next  $1,000,000  —  13%  per  cent 135.,  000 

On  all  amounts  in  excess  of  $5,000,000  fifteen  per  cent. 

ADDITIONAL  WAR  TAX 

Title  ix  of  the  War  Revenue  Act  of  October  3,  1917  im- 
poses the  following  in  addition  to  those  above. 

Upon  the  transfer  of  each  net  estate  of  any  decedent  dying  after  the  pas- 
sage of  this  Act:  a  tax  equal  to  the  following  percentages  of  its  value: 

Per  cent 

Net  Estate  not  excess  of  $50,000 % 

Exceeds  $50. 000  not  over         $150, 000 1 


150,  000 
250.  000 
450. 000 

1.  000,  000 

2.  000.  000 

3.  000.  000 

4.  000.  000 

5.  000,  000 
8.  000.  000 


250,000 


450,000  .........................  2 

1.000.000  .........................  2V2 

2,  000,  000  .........................  3 

3.  000.  000  .........................  3% 

4.000.000  ............  .  ............  4 

5.000,000  .........................  4% 

8,000.000  .........................  5 

10.000.000..  7 


10,  000,  000 10 

No  tax  shall  be  paid  on  the  transfer  of  the  net  estate  of  any  decedent  dying 
while  serving  in  the  military  or  naval  forces  of  the  United  States,  during  the 
continuance  of  the  present  war,  or  if  death  results  from  injuries  received  or 
disease  contracted  in  such  service  within  one  year  after  the  termination  of 
such  war. 

NOTE. —  The  above  was  passed  by  Congress  after  this  chapter  was  written 
and  the  book  nearly  printed. 


PART  VI  —  THE  STATUTES  495 

If  the  tax  is  on  the  transfer  there  must  be  a  transferee 
and  some  provision  must  be  made  for  adjusting  the  burden 
among  several  transferees.  '  Apparently  the  law  is 
regarded  by  the  treasury  department  as  an  estate  tax 
on  property.  How  the  courts  will  regard  it,  and,  if  they 
sustain  the  law,  how  they  will  legislate  to  adjust  the  bur- 
dens of  the  tax  remains  to  be  seen. 

b.  EXEMPTIONS  AND  DEDUCTIONS. 

To  non-residents  there  is  no  specific  exemption. 

On  all  estates  of  resident  decedents  $50,000  is  deducted 
before  any  tax  can  accrue.  « 

There  is  also  deducted  debts,  funeral  expenses,  admin- 
istration- expenses,  state  inheritance  taxes,  mortgages, 
losses  not  compensated  by  insurance  and  any  other  deduc- 
tion allowed  by  the*  laws  of.  the  state  where  the  estate  is 
administered. 

In  case  of  non-residents  such  deductions  are  propor- 
tioned on  the:  ratio  of  the  value  of  the  property  in  this 
country  to  the  entire  estate  of  the  decedent  located  else- 
where. 

c.  DUTIES  OF  EXECUTORS. 

Within  thirty  days  after  qualifying  the  executor  or 
administrator  must  give  written  notice  to  the  collector  of 
internal  revenue  if  the  gross  estate  exceeds  $60,000  in  case 
of  a  resident,  or  in  case  of  a  non-resident  if  any  part  of 
the  property  is  situated  within  the  United  States,  and  file 
an  inventory. 

As  the  executor  is  appointed  by  a  state  court  and  has  no 
relations  with  the  United  States  government  the  power  to 
impose  this  duty  upon  him  is  not  clear.  At  all  events  it  is 
the  first  taxing  statute  that  requires  notice  from  the  tax- 
payer instead  of  providing  that  the  taxing  power  shall  itself 
give  the  notice.  Apparently  the  Congress  sup-posed  that 
the  "  notice  and  a  hearing"  afforded  should  be  for  the 
benefit  of  the  taxing  power  and  not  for  the  benefit  of  the 
taxpayer. 


496  INHERITANCE   TAXATION 

d.  DISCOUNT  INTEREST  AND  PENAI/TY. 

The  tax  is  due  within  one  year  and  must  be  paid  from 
the  principal  of  the  estate  before  any  distribution.  A 
discount  of  5%  per  annum  is  allowed  for  payment  before 
the  year,  -based  on  the  amount  of  time  the  tax  is  antici- 
pated. After  90  days  the  tax  draws  interest  at  10%  from 
death  but  the  penalty  may  be  reduced  to  6%  in  case  of 
unavoidable  delay.  Unpaid  taxes  remain  a  lien  against 
the  estate  for  ten  years. 

e.  TREASURY  DEPARTMENT  RULINGS. 

Some  of  the  important  rulings  of  the  treasury  depart- 
ment upon  questions  arising  in  specific  cases  under  the 
tax  are  as  follows : 

1.  Transfers  in  contemplation  of  death  made  prior  to 
the   statute   are   taxable  if  the   decedent  died  after  the 
statute  took  effect. 

2.  Inheritances  taxes  imposed  by  the  states  are  a  proper 
deduction  in  ascertaining  the  net  estate.    (Revoked  Sept.  1, 
1917.    Not  allowed  since  that  date.) 

3.  Income  and  increases  during  settlement  are  not  taxed 
but  losses  are  allowed. 

4.  Advance  payments  for  the  discount  are  not  accepted 
unless  a  reasonably  accurate  inventory  has  been  filed. 

5.  United  States  bonds  must  pay  the  inheritance  tax  and 
be  included  in  the  net  estate. 

6.  One  half  of  a  wife 's  community  property  under  Texas 
and  Louisiana  laws  is  taxable. 

7.  Deductions  are  regulated  by  those  allowed  by  the 
local  state  courts. 

3.  The  Federal  Statute  and  Department  Regulations. 

The  Federal  Statute  (Sec.  212)  authorized  the  Commis- 
sioner of  Internal  Revenue,  with  the  approval  of  the 
Secretary  of  the  Treasury,  to  make  such  regulations  as 
he  may  deem  necessary  to  carry  out  the  provisions  of  the 


PART  VI  —  THE  STATUTES  497 

act,  and  these  regulations,  within  that  limitation,  and  if 
consistent  with  the  Federal  laws  and  the  Constitution, 
have  the  force  of  law. 

The  statute,  accompanied  "by  the  regulations  prescribed, 
was  issued  by  the  Department  as  Internal  Revenue  Regu- 
lations No.  37,  May,  1917,  and  is  the  most  recent  and  only 
authoritative  exposition  of  the  law,  in  the  absence  of 
judicial  construction. 

In  view  of  the  doubtful  constitutionality  of  the  entire 
statute,  emphasized  rather  than  minimized  by  the  view  of 
the  department ;  the  law  as  interspersed  with  these  regula- 
lations  is  given  as  issued  by  Regulation  No.  37,  as  follows : 

INTERNAL  REVENUE  REGULATIONS  NO.  37, 
MAY,  1917.* 


LAW  AND  REGULATIONS  RELATING  TO  THE 
ESTATE  TAX. 


[For  convenient  reference  each  section  of  Title  II  of  the  revenue  act  of  September 
8,  1916,  or  of  Title  III  of  the  special  preparedness  revenue  act  of  'March  3, 
1917,  is  immediately  followed  by  the  pertinent  articles  of  the  regulations.  Unless 
otherwise  shown,  all  sections  are  of  the  September  8,  1916,  act.] 

DEFINITIONS. 

SEC.  200.  That  when  used  in  this  title  — 

The  term  "  person "  includes  partnerships,  corporations,  and  associa- 
tions. 

The  term  "United  States"  means  only  the  States,  the  Territories  of 
Alaska  and  Hawaii,  and  the  District  of  Columbia. 

The  term  "  executor  "  means  the  executor  or  administrator  of  the  dece-  ' 
dent,  or,  if  there  is  no  executor  or  administrator,  any  person  who  takes 
possession  of  any  property  of  the  decedent ;  and 

The  term  " collector"  means  the  collector  of -internal  revenue  of  the  dis- 
trict in  which  was  the  domicile  of  the  decedent  at  the  time  of  his  death,  or, 
if  there  was  no  such  domicile  in  the  United  States,  then  the  collector  of  the 
district  in  which  is  situated  the  part  of  the  gross  estate  of  the  decedent  in 
the  United  States,  or,  if  such  part  of  the  gross  estate  is  situated  in  more 
than  one  district,  then  the  collector  of  internal  revenue  at  Baltimore,  Md. 


*  Additional  war  tax  October  3,   1917,  enacted  after  this  chapter  was  in 
prr.-s.      Sec  page  494. 


498  INHERITANCE  TAXATION 

AKTICLE  I.  The  tax  is  not  imposed  in  Porto  Rico  or  the 
Philippine  Islands,  but,  under  the  definition  in  the  title, 
the  property  in  the  United  States  of  deceased  residents 
of  the  islands  is  taxable  as  the  property  of  non-residents. 

ART.  II.  This  act  does  not  distinguish  between  citizens 
and  aliens  but  does  distinguish  between  residents  and  non- 
residents of  the  United  States.  If  a  citizen  of  the  United 
States  has  maintained  his  principle  domicile  abroad  prior 
to  death,  his  estate  is  taxable  as  that  of  a  non-resident. 

AUT.  III.  If  a  resident  decedent  has  maintained  domi- 
ciles in  more  than  one  collection  district,  the  facts  should 
be  presented  to  the  commissioner  for  ruling  as  to  the 
proper  collector  to  receive  30-day  notice,  return  and  tax 
payment. 

RATES  OF  TAX. 

SEC.  201.  That  a  tax  (hereafter  in  this  title  referred  to  as  the  tax), 
equal  to  the  following  percentages  of  the  value  of  the  net  estate  to  be 
determined  as  provided  in  section  two  hundred  and  three,  is  hereby  imposed 
upon  the  transfer  of  the  net  estate  of  every  decedent  dying  after  the  pas- 
sage of  this  act,  whether  a  resident  or  non-resident  of  the  United  States : 

One  per  centum  of  the  amount  of  such  net  estate  not  in  excess  of 
$50,000; 

Two  per  centum  of  the  amount  by  which  such  net  estate  exceeds  $50,000 
and  does  not  exceed  $150,000; 

Three  per  centum  of  the  amount  by  which  such  net  estate  exceeds 
$150,000  and  does  not  exceed  $250,000; 

Four  per  centum  of  the  amount  by  which  such  net  estate  exceeds  $250,- 
000  and  does  not  exceed  $450,000 ; 

Five  per  centum  of  the  amount  by  which  such  net  estate  exceeds  $450,- 
000  and  does  not  exceed  $1,000,000; 

Six  per  centum  of  the  amount  by  which  such  net  estate  exceeds 
$1,000,000  and  does  not  exceed  $2,000,000 ; 

Seven  per  centum  of  the  amount  by  which  such  net  estate  exceeds 
$2,000,000  and  does  not  exceed  $3,000,000 ; 

Eight  per  centum  of  the  amount  by  which  such  net  estate  exceeds  $3,000,- 
000  and  does  not  exceed  $4,000,000 ; 

Nine  per  centum  of  the  amount  by  which  such  net  estate  exceeds  $4,000,- 
000  and  does  not  exceed  $5,000,000;  and 

Ten  per  centum  of  the  amount  by  which  such  net  estate  exceeds 
$5,000,000. 


PART  VI  —  THE  STATUTES  499 

TITLE  III.— ACT  OF  MARCH  3,  1917. 

SEC.  300.  That  section  two  hundred  and  one,  Title  II,  of  the  act  entitled 
"An  act  to  increase  the  revenue,  and  for  other  purposes,"  approved  Sep- 
tember eighth,  nineteen  hundred  and  sixteen,  be,  and  the  same  is  hereby, 
amended  to  read  as  follows: 

"  SEC.  201.  That  a  tax  (hereinafter  in  this  title  referred  to  as  the  tax), 
equal  to  the  following  percentages  of  the  value  of  the  net  estate,  to  be 
determined  as  provided  in  section  two  hundred  and  three,  is  hereby  imposed 
upon  the  transfer  of  the  net  estate  of  every  decedent  dying  after  the  pas- 
sage of  this  act,  whether  a  resident  or  nonresident  of  the  United  States : 

"  One  and  one-half  per  centum  of  the  amount  of  such  net  estate  not  in 
excess  of  $50,000; 

"  Three  per  centum  of  the  amount  by  which  such  net  estate  exceeds 
$50,000  and  does  not  exceed  $150,000 ; 

"  Four  and  one-half  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $150,000  and  does  not  exceed  $250,000 ; 

"  Six  per  centum  of  the  amount  by  which  such  net  estate  exceeds  $250,- 
000  and  does  not  exceed  $450,000 ; 

"  Seven  and  one-half  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $450,000  and  does  not  exceed  $1,000,000; 

"  Nine  per  centum  of  the  amount  by  which  such  net  estate  exceeds 
$1,000,000  and  does  not  exceed  $2,000,000 ; 

"  Ten  and  one-half  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $2,000,000  and  does  not  exceed  $3,000,000; 

"  Twelve  per  centum  of  the  amount  by  which  such  net  estate  exceeds 
$3,000,000  and  does  not  exceed  $4,000,000 ; 

"  Thirteen  and  one-half  per  centum  of  the  amount  by  which  such  net 
estate  exceeds  $4,000,000  and  does  not  exceed  $5,000,000 ;  and 

"  Fifteen  per  centum  of  the  amount  by  which  such  net  estate  exceeds 
$5,000,000." 

SEC.  301.  That  the  tax  on  the  transfer  of  the  net  estate  of  decedents 
dying  between  September  eighth,  nineteen  hundred  and  sixteen,  and  the 
passage  of  this  act  shall  be  computed  at  the  rates  originally  prescribed  in 
the  act  approved  September  eighth,  nineteen  hundred  and  sixteen. 

ART.  IV.  This  is  not  an  inheritance  tax,  and  the  inter- 
ests of  separate  beneficiaries  and  the  manner  of  their 
taking  have  no  bearing  upon  the  question  of  liability  to 
tax  or  the  amount  of  tax  due.  This  is  a  transfer  tax  in 
a  lump  sum  resting  upon  the  decedent's  whole  net  estate 
computed  according  to  sections  202  and  203  of  the  act. 

ART.  V.  The  rates  of  tax  apply  upon  separate  blocks  of 
the  net  estate,  the  first  $50,000  being  taxable  at  the  rate 


500  INHERITANCE  TAXATION 

of  1  per  cent.  (Vfa  per  cent,  if  the  decedent  died  after 
March  2,  1917),  the  next  $100,000  being  taxable  at  the 
rate  of  2  per  cent.  (3  per  cent,  if  the  death  occurred  after 
March  2,  1917),  etc. 

ART.  VI.  The  rates  imposed  in  the  act  of  September  8, 
1916,  apply  to  estates  of  those  who  died  on  or  after  Sep- 
tember 9,  1916,  and  before  March  3,  1917 ;  the  higher  rates 
imposed  in  the  act  of  March  3,  1917,  apply  to  estates  of 
those  who  died  on  or  after  March  3,  1917. 

THE  GROSS  ESTATE. 

SEC.  202.  That  the  value  of  the  gross  estate  of  the  decedent  shall  be 
determined  by  including  the  value  at  the  time  of  his  death  of  all  property, 
real  or  personal,  tangible  or  intangible,  wherever  situated. 

(a)  To  the  extent  of  the  interest  therein  of  the  decedent  at  the  time  of 
his  death  which  after  his  death  is  subject  to  the  payment  of  the  charges 
against  his  estate  and  the  expenses  of  its  administration  and  is  subject  to 
distribution  as  part  of  his  estate. 

(6)  To  the  extent  of  any  interest  therein  of  which  the  decedent  has  at  any 
time  made  a  transfer,  or  with  respect  to  which  he  has  created  a  trust,  in 
contemplation  of  or  intended  to  take  effect  in  possession  or  enjoyment  at 
or  after  his  death,  except  in  case  of  a  bona  fide  sale  for  a  fair  considera- 
tion in  money  or  money's  worth.  Any  transfer  of  a  material  part  of  his 
property  in  the  nature  of  a  final  disposition  or  distribution  thereof,  made 
by  the  decedent  within  two  years  prior  to  his  death  without  such  a  con- 
sideration shall,  unless  shown  to  the  contrary,  be  deemed  to  have  been 
made  in  contemplation  of  death  within  the  meaning  of  this  title ;  and 

(c)  To  the  extent  of  the  interest  therein  held  jointly  or  as  tenants  in  the 
entirety  by  the  decedent  and  any  other  person,  or  deposited  in  banks  or 
other  institutions  in  their  joint  names  and  payable  to  either  or  the  sur- 
vivor, except  such  part  thereof  as  may  Jbe  shown  to  have  originally 
belonged  to  such  other  person  and  never  to  have  belonged  to  the  decedent. 

For  the  purpose  of  this  title  stock  in  a  domestic  corporation  owned  and 
held  by  a  nonresident  decedent  shall  be  deemed  property  within  the 
United  States,  and  any  property  of  which  the  decedent  has  made  a  transfer 
or  with  respect  to  which  he  has  created  a  trust,  within  the  meaning  of  sub- 
division (6)  of  this  section,  shall  be  deemed  to  be  situated  in  the  United 
States,  if  so  situated  either  at  the  time  of  the  transfer  or  the  creation  of 
the  trust,  or  at  the  time  of  the  decedent's  death. 

ART.  VII.  All  property,  tangible  and  intangible,  which  is 
legally  liable  for  satisfaction  of  charges  against  the  estate 


PART  VI  —  THE  STATUTES  501 

and  for  administration  expenses  and  to  distribution  to  the 
decedent's  beneficiaries  is  a  portion  of  his  gross  estate  to 
be  shown  in  the  return  on  Form  706.  There  is  no  pro- 
vision of  the  taxing  act  under  which  the  value  of  widow's 
dower  or  husband's  curtesy,  or  any  similar  interest  of  a 
successor  to  decedent  by  whatever  name  designated  in  the 
local  law,  can  be  excluded  or  deducted  from  the  gross 
estate.  This  is  true  also  of  real  and  other  property  pass- 
ing to  beneficiaries  without  the  intervention  of  an  executor. 

ART.  VIII.  The  value  at  the  time  of  death  of  United 
States  and  other  "  tax  free  "  bonds  owned  by  decedent  is 
a  part  of  the  gross  estate.  (T.  D.  2449.) 

ART.  IX.  Income  of  the  estate  and  appreciation  of 
values  after  death  are  not  to  be  included  in  the  gross  estate 
(T.  D.  2406).  Dividends  upon  stock  declared  prior  to  the 
day  of  death  are  to  be  included,  whether  paid  before  or 
after  death.  Dividends  declared  after  the  day  of  death 
are  not  to  be  included.  Interest  upon  bonds  is  to  be  com- 
puted to  the  day  of  death  and  the  amount  thus  found  to 
have  been  accrued  is  to  be  included  in  the  gross  estate. 
Interest  on  mortgage  notes  and  certificates  of  deposit, 
dividends,  if  fixed  and  certain,  on  preferred  stock,  and 
income  from  other  similar  assets  having  fixed  and  certain 
earnings  must  be  included  in  the  gross  estate  to  the  extent 
of  the  amount  actually  accrued  to  the  day  of  death  (T.  D. 
2483). 

ART.  X.  Insurance  passing  to  the  estate  is  to  be 
returned^  on  Form  706.  If  the  contract  of  insurance  has 
named  a  definite  beneficiary  and  the  insurance  is  paid 
directly  to  such  beneficiary  it  is  not  a  part  of  the  gross 
estate.  If  insurance  which  by  the  terms  of  the  contract 
is  payable  to  the  executor,  is  transferred  to  another  bene- 
ficiary or  trustee  for  another  beneficiary,  and  the  transfer 
is  made  in  contemplation  of  death,  the  value  of  such  insur- 
ance is  taxable  under  the  provisions  of  paragraph  B, 
section  202. 


502  INHERITANCE  TAXATION 

ART.  XL  Property  passing  under  a  general  power  of 
appointment  is  to  be  included  as  a  portion  of  the  gross 
estate  of  a  decedent  appointor.  (T.  D.  2477.) 

ART.  XII.  The  value  of  loans  evidenced  by  promissory 
notes  is  to  be  included  in  the  gross  estate,  even  though  by 
will  the  decedent  provides  that  the  notes  shall  be  canceled. 

ART.  XIII.  Any  transfer  of  his  property,  except  for  a 
valuable  consideration,  effected  by  a  taxable  decedent  at 
any  time  during  his  life  but  in  contemplation  of  his  death 
is  a  portion  of  his  gross  estate,  regardless  of  whether  the 
transfer  was  fully  effected  or  the  instrument  of  transfer 
executed  before  or  after  the  passage  of  the  taxing  act, 
September  8,  1916.  (T.  D.  2385.) 

ART.  XIV.  If  any  transfer  of  a  material  part  of 
decedent's  property  was  effected  within  two  years  prior 
tq  death  a  presumption  lies  that  it  was  made  in  contempla- 
tion of  death  and  its  value  must  be  shown  upon  the  return 
on  Form  706.  With  the  return  the  estate  may  submit 
evidence  and  argument  to  establish  whether  the  transfer 
was  actually  made  in  such  contemplation,  and  such  evi- 
dence will  be  passed  upon  by  the  commissioner  before  the 
assessment  against  the  estate  is  confirmed.  It  should  be 
noted  that  taxable  transfers  are  not  limited  to  those  made 
within  two  years  prior  to  death.  A  transfer  made  at  any 
time  whatsoever  during  the  transferor's  life  is  taxable  if 
it  is  of  the  kind  defined  in  paragraph  B,  section  202. 

ART.  XV.  Where  community  property  is  held  in  partner- 
ship by  husband  and  wife  during  the  lives  of  both,  one-half 
the  whole  value  of  the  community  property  is  to  be  included 
in  the  gross  estate  of  the  decedent  husband  or  wife. 
Where,  however,  the  wife's  interest  in  so-called  com- 
munity property  is  equivalent  merely  to  a  common  law 
right  of  dower  the  whole  value  of  the  so-called  community 
property  is  to  be  included  in  the  deceased  husband's  gross 
estate.  This  is  the  rule,  too,  where  the  husband's  interest 


PART  VI  —  THE  STATUTES  503 

in  such  property  is  equivalent  merely  to  the  curtesy  right. 
(T.  D.  2450.) 

ART.  XVI.  Bonds,  as  well  as  stocks,  in  domestic  cor- 
porations, owned  by  a  non-resident  decedent,  are  a  portion 
of  this  gross  estate  within  the  United  States. 

THE  NET  ESTATE. 

SEC.  203.  That  for  the  purpose  of  the  tax  the  value  of  the  net  estate 
shall  be  determined  — 

(a)  In  the  ease  of  a  resident,  by  deducting  from  the  value  of  the  gross 
estate  — 

(1)  Such  amounts  for  funeral  expenses,  administration  expenses,  claims 
against  the  estate,  unpaid  mortgages,  losses  incurred  during  the  settle- 
ment of  the  estate  arising  from  fires,  storms,  shipwreck,  or  other  casualty, 
and  from  theft,  when  such  losses  are  not  compensated  for  by  insurance  or 
otherwise,  support  during  the  settlement  of  the  estate  of  those  dependent 
upon  the  decedent,  and  such  other  charges  against  the  estate,   as  are 
allowed  by  the  laws  of  the  jurisdiction,  whether  within  or  without  the 
United  States,  under  which  the  estate  is  being  administered;  and 

(2)  An  exemption  of  $50,000; 

(&)  In  the  case  of  a  non-resident,  by  deducting  from  the  value  of  that 
part  of  his  gross  estate  which  at  the  time  of  his  death  is  situated  in  the 
United  States  that  proportion  of  the  deductions  specified  in  paragraph  (1) 
of  subdivision  (a)  of  this  section  which  the  value  of  such  part  bears  to  the 
value  of  his  entire  gross  estate,  wherever  situated.  But  no  deduction  shall 
be  allowed  in  the  case  of  a  non-resident  unless  the  executor  includes  in  the 
return  required  to  be  filed  under  section  two  hundred  and  five  the  value  at 
the  time  of  his  death  of  that  part  of  the  gross  estate  of  the  non-resident 
not  situated  in  the  United  States. 

ART.  XVII.  A  deduction  can  not  be  taken  merely  because 
it  would  be  allowable  as  a  credit  in  the  executor's  account 
under  the  laws  of  the  local  jurisdiction;  the  amount  must 
actually  have  been  disbursed  by  the  executor.  Further- 
more, if  an  expenditure  of  the  nature  of  those  specified  in 
sub-paragraph  1,  above,  has  exceeded  the  amount  allow- 
able under  the  local  law  as  a  credit  in  the  executor's 
account,  only  that  portion  which  represents  the  legal  credit 
can  be  deducted  on  the  estate  tax  return.  (T.  D.  2453.) 

ART.  XVIII.  Only  such  mortgages  as  were  existent  and 
unpaid  at  the  time  of  decedent's  death  may  be  deducted. 


504  INHERITANCE  TAXATION 

The  whole  value  of  the  mortgaged  property  should  be 
shown  in  the  gross  estate  and  the  amount  of  the  mortgage 
deducted  in  the  proper  place  on  page  2  of  the  return  on 
Form  706. 

ART.  XIX.  Support  of  decedent's  dependents  can  not  be 
deducted  unless  there  has  been  an  actual  disbursement 
by  the  executor  under  the  conditions  and  in  the  amount 
prescribed  by  the  local  law.  If  the  local  law  contains  no 
provision  regarding  support  of  dependents  no  amount  can 
be  deducted  because  of  such  support. 

ART.  XX.  The  specific  exemption  of  $50,000  applies  only 
to  the  estates  of  residents.  It  is  taken  in  arriving  at  the 
net  estate,  so  that  a  net  estate  of  any  value  whatever  is 
subject  to  tax.  Thus  if  a  resident  decedent's  gross  estate 
had  a  value  of  $60,000,  and  the  legal  deductions  under  the 
local  law  for  expenses,  charges,  claims,  and  losses  aggre- 
gated $8,000,  the  net  value  of  $52,000  is  further  reduced 
by  the  specific  exemption  of  $50,000,  leaving  a  net  estate 
of  $20,000,  subject  to  tax  at  the  minimum  rate,  the  tax 
due  being  $20  under  the  act  of  September  8,  1916,  or  $30 
under  the  act  of  March  3,  1917. 

ART.  XXL  The  Federal  estate  tax  is  not  determined, 
does  not  attach  and  can  not  be  assessed  or  paid  until  the 
net  estate  upon  which  it  is  based  has  been  exactly  estab- 
lished. The  estate  tax,  therefore,  can  not  be  deducted 
from  the  gross  estate  to  determine  the  taxable  net  estate. 

ART.  XXII.  The  due  date  for  the  return  (Form  706)  is 
simultaneous  with  the  due  date  for  the  tax  —  i.  e.,  one ' 
year  from  the  day  of  decedent's  death.  While  a  tentative 
return  may  be  filed  within  the  year  (or  a  final  return  if 
administration  is  completed),  upon  such  tentative  return 
estimated  expenses  can  not  be  deducted.  If  ultimately 
there  proves  to  have  been  an  overpayment  of  tax  because 
of  expense  arising  after  the  filing  of  return  a  claim  for 
the  abatement  or  refund  of  the  excess  tax  may  be  filed. 


PART  VI  —  THE  STATUTES  505 

ART.  XXIII.  From  the  gross  estate  of  a  non-resident 
decedent  there  may  be  deducted,  provided  the  vahie  of  the 
entire  gross  estate  wherever  situated  is  shown  upon  the 
return,  a  proportionate  share  of  the  expenses,  claims, 
losses  and  other  legal  charges  equal  to  the  share  the  gross 
estate  within  the  United  States  is  of  the  entire  gross 
estate  wherever  situated: 

Example:  If  the  total  gross  estate  wherever  situated  is 
$1,000,000,  and  the  share  in  the  United  States,  Alaska,  and 
Hawaii  is  $100,000,  and  if  the  total  legal  expenses,  charges, 
and  losses  is  $50,000,  the  share  deductible  from  the  gross 
estate  within  the  United  States  etc.,  is  $5,000.  A  synopsis 
of  the  correct  return  would  read:  Gross  estate,  $100,000; 
legal  deductions,  $5,000;  net  estate,  $95,000;  tax  due,  $750 
on  $50,000  plus  $1,350  on  $45,000,  total  tax  $2,100  (at  the 
rates  of  the  March  3,  1917,  act).  Unless  the  return  shows 
the  value  of  the  whole  gross  estate  wherever  situated,  the 
tax  will  be  collected  upon  the  value  of  the  entire  gross 
estate  in  the  United  States,  without  deduction  of  any  kind 
or  amount. 

NOTICE  AND  RETURN 

SEC.  205.  That  the  executor,  within  thirty  days  after  qualifying  as  such, 
or  after  coming  into  possession  of  any  property  of  the  decedent,  which- 
ever event  first  occurs,  shall  give  written  notice  thereof  to  the  collector. 
The  executor,  shall,  also,  at  such  times  and  in  such  manner  as  may  be 
required  by  the  regulations  made  under  this  title,  file  with  the  collector  a 
return  under  oath  in  duplicate,  setting  forth  (a)  the  value  of  the  gross 
estate  of  the  decedent  at  the  time  of  his  death,  or,  in  case  of  a  nonresident, 
of  that  part  of  his  gross  estate  situated  in  the  United  States;  (b)  the 
deductions  allowed  under  section  two  hundred  and  three;  (c)  the  value  of 
the  net  estate  of  the  decedent  as  defined  in  section  two  hundred  and  three; 
and  (d)  the  tax  paid  or  payable  thereon;  or  such  part  of  such  informa- 
tion as  may  at  the  time  be  ascertainable  and  such  supplemental  data  as 
may  be  necessary  to  establish  the  correct  tax. 

Return  shall  be  made  in  all  cases  of  estate  subject  to  the  tax  or  where 
the  gross  estate  at  the  death  of  the  decedent  exceeds  $60,000,  and  in  the 
case  of  the  estate  of  every  nonresident  any  part  of  whose  gross  estate  is 
situated  in  the  United  States.  If  the  executor  is  unable  to  make  a  com- 
plete return  as  to  any  part  of  the  gross  estate  of  the  decedent,  he  shall 


506  INHERITANCE  TAXATION 

include  in  his  return  a  description  of  such  part  and  the  name  of  every 
person  holding  a  legal  or  beneficial  interest  therein,  and  upon  notice  from 
the  collector  such  person  shall  in  like  manner  make  a  return  as  to  such 
part  of  the  gross  estate.  The  Commissioner  of  Internal  Revenue  shall 
make  all  assessments  of  the  tax  under  the  authority  of  existing  administra- 
tive special  and  general  provisions  of  law  relating  to  the  assessment  and 
collection  of  taxes. 

SEC.  206.  That  if  no  administration  is  granted  upon  the  estate  of  a  dece- 
dent, or  if  no  return  is  filed  as  provided  in  section  two  hundred  and  five, 
or  if  a  return  contains  a  false  or  incorrect  statement  of  a  material  fact,  the 
collector  or  deputy  collector  shall  make  a  return  and  the  Commissioner  of 
Internal  Revenue  shall  assess  the  tax  thereon. 

ART.  XXIV.  The  general  rule  governing  the  filing  of 
the  30-day  notice  is  that  as  to  all  property  of  the  decedent 
which  will  come  into  charge  of  the  executor  the  duty  of 
filing  the  notice,  Form  704,  is  upon  the  executor  and  the 
form  must  be  filed  with  the  collector  in  whose  district  was 
decedent's  domicile  at  the  time  of  death  within  30  days 
after  the  granting  of  letters.  With  regard  to  all  property 
which  passes  directly  to  beneficiaries  and  will  not  come  in 
charge  of  the  executor  the  primary  duty  of  filing  the  notice, 
Form  705,  rests  upon  the  immediate  possessor  after 
decedent  or  upon  the  person  having  in  charge  the  property 
at  the  time  of  decedent's  death,  for  instance  the  bank  in 
which  is  deposited  the  joint  account  of  decedent  and 
another.  Such  person  is  made  the  "  executor  "  under  the 
definition  in  section  200  for  the  purpose  of  filing  the  notice, 
since  whereas  prior  to  the  death  he  held  the  property 
for  the  decedent,  immediately  upon  the  death  there  is 
a  change  in  the  nature  of  the  holding  and  the  holder  takes 
possession,  within  the  meaning  and  intent  of  the  law,  for 
the  succeeding  owner.  In  such  cases  Form  705  must  be 
filed  within  30  days  after  decedent's  death.  If,  however, 
at  the  time  of  taking  by  the  succeeding  owner  the  notice, 
Form  705,  has  not  been  filed,  this  duty  devolves  immedi- 
ately upon  such  succeeding  taker  and  he  must  file,  within 
30  days  from  the  date  of  possession,  the  Form  705  with  the 
proper  collector.  (T.  D.  2372,  T.  D.  2421,  and  T.  D.  2454.) 


PART  VI  —  THE  STATUTES  507 

ART.  XXV.  The  law  contemplates  also  that  all  persons 
who  shall  have  received  within  two  years  prior  to  the  death 
of  the  decedent  any  material  part  of  decedent's  property, 
either  as  a  gift  in  contemplation  of  death,  or  by  a  transfer 
intended  to  take  legal  effect  at  decedent's  death,  or  by  a 
so-called  sale  which  was  not  a  bona  fide  sale  for  a  fair 
consideration  in  money  or  money's  worth,  should  file  a 
similar  notice  with  the  collector  within  30  days  after  the 
death  of  decedent.  This  is  clearly  indicated  by  section  202, 
paragraph  B,  of  the  act,  wherein,  for  the  purpose  of  tax 
liability,  such  gifts,  transfers,  and  "  sales  "  are  held 
effective  in  every  case  as  of  the  day  of  the  donor's  or 
transferor's  death.  With  the  notice  to  the  collector,  the 
donee  or  transferee  may  file  such  evidence  as  may  be 
desired  to  establish  whether  the  gift  or  transfer  was  in 
contemplation  of  or  intended  to  take  effect  at,  the  donor's 
or  transferor's  death,  or  whether  the  sale  was  bona  fide. 

ART.  XXVI.  The  30-day  notice  (Form  705)  is  required 
to  be  filed  for  all  property  of  every  kind,  located  or  legally 
situate  in  this  country  (including  Hawaii  and  Alaska), 
by  those  agents  or  representatives,  donees,  transferees, 
trustees,  or  fiduciaries  of  a  decedent  dying  domiciled 
abroad,  whether  alien  or  citizen  of  the  United  States.  The 
notice  must  be  filed  within  30  days  from  decedent's  death 
with  the  collector  of  internal  revenue  in  whose  district  the 
property  within  this  country  is  situate,  unless  the  local 
agent,  etc.,  having  the  property  in  charge  knows  that  there 
is  other  property  of  decedent  located  in  another  collection 
district,  in  which  case  the  notice  is  to  be  filed  with  the 
collector  of  internal  revenue,  Baltimore,  Md. 

If  it  be  not  possible  for  the  local  agent,  representative, 
etc.,  to  file  the  notice  within  30  days  from  death  of  the  non- 
resident, the  penalty  denounced  in  section  210  will  not  be 
asserted  if  the  notice  is  filed  within  30  days  from  the  day 


508  INHERITANCE  TAXATION 

upon  which  the  local  agent,  representative,  etc.,  receives 
information  of  the  nonresident  decedent's  death. 

Each  collector  receiving  Form  705  showing  property  of 
a  non-resident  will  immediately  inform  the  commissioner 
of  the  fact.  A  record  will  be  kept  in  the  commissioner's 
office  from  which  it  can  be  determined  whether  Forms  705 
for  a  given  estate  have  been  filed  in  more  than  one  collec- 
tion district,  in  which  case  the  several  collectors  will  be 
instructed  to  forward  the  Forms  705  to  the  collector  at 
Baltimore,  Md. 

This  regulation  applies  to  transfer  agents  of  corporate 
stock,  receiving  into  possession  for  transfer  such  person- 
ality of  a  non-resident  decedent ;  to  safe-deposit  companies, 
warehouses,  and  similar  custodians  of  a  non-resident's 
property  in  this  country;  to  brokers  holding  as  collateral 
securities  belonging  to  a  non-resident  decedent,  to  banking 
institutions  holding  money  of  non-resident  decedents  on 
deposit  or  for  any  specific  purpose,  such  as  the  purchase 
of  goods,  so  long  as  the  title  rests  in  the  non-resident 
decedent,  his  estate  or  his  heirs,  and  to  debtors  in  this 
country  of  non-resident  decedents. 

It  does  not  apply  to  carriers  of  property  of  a  non- 
resident decedent  while  such  property  is  in  their  charge 
for  the  purpose  of  transit. 

ART.  XXVII.  The  filing  of  Forms  704  and  705  should 
not  be  delayed  for  the  securing  of  exact  information  as  to 
the  value  of  the  gross  or  net  estate.  The  spaces  upon  the 
forms  for  the  insertion  of  such  values  may  be  filled  in  with 
approximate  figures  representing  the  judgment  at  the  time 
of  filing  of  the  executor  or  beneficiary  as  to  the  values  of 
the  gross  and  net  estate.  The  signature  of  one  executor 
on  Form  704  is  sufficient. 

THE  RETURN. 

ART.  XXVIII.  Return  is  required  of  the  estate  of  every 
resident  decedent  whose  gross  estate,  as  defined  in  the  law, 


PART  VI  —  THE  STATUTES  509 

exceeds  in  value  $60,000,  or  whose  net  estate,  as  denned  in 
the  law,  has  any  value  in  excess  of  the  specific  exemption 
of  $50,000. 

Return  is  required  of  the  estate  of  every  non-resident 
owning  property  in  the  United  States,  Hawaii,  or  Alaska, 
including  stock  or  bonds  of  domestic  corporations,  or  who 
has  at  any  time  transferred  any  such  property  in  con- 
templation of  death. 

ART.  XXIX.  The  filing  of  tentative  return  within  one 
year  after  decedent's  death  does  not  relieve  from  the 
necessity  of  filing  final  and  complete  return  at  the  expira- 
tion of  the  year.  If  at  the  expiration  of  the  year  it  is 
impossible  for  the  executor  to  show  upon  the  return  com- 
plete and  accurate  data  of  the  gross  estate  and  deductions, 
he  shall  inform  the  collector,  fully  explaining  the  necessity 
for  further  delay,  and  the  collector,  if  he  considers  the 
delay  unavoidable,  may  extend  the  time  for  filing  over  a 
further  period  until,  in  the  collector's  judgment,  the  cause 
for  the  delay  has  been  removed.  Interest,  however,  begins 
to  run  from  90  days  after  the  year  from  death  has  elapsed, 
and  extensions  for  a  period  beyond  90  days  should  not  be 
granted;  at  the  end  of  the  90  days,  even  though  the  cause 
for  delay  still  exists,  the  collector  should  require  return  to 
be  made  in  such  manner  that  the  tax  shown  thereon  to  be 
due  will  satisfy,  in  the  collector 's  opinion,  all  tax  the  estate 
will  be  required  by  the  law  to  pay.  (See  Sec.  207,  below.) 
The  final  return  should  be  signed  and  sworn  to  by  all  the 
executors. 

ART.  XXX.  In  the  case  of  estates  having  no  executors 
or  administrators,  or  where  any  part  of  the  gross  estate 
passes  other  than  in  charge  of  executors  or  administrators, 
the  act  places  upon  the  separate  beneficiaries  the  precise 
duties  with  regard  to  the  filing  of  the  return  and  the  pay- 
ment of  tax  that  are  otherwise  imposed  on  the  executors 
and  administrators.  Each  such  beneficiary  is  as  fully  liable 
to  all  the  penalties  provided  in  the  act  as  is  the  executor 


510  INHERITANCE  TAXATION 

or  the  administrator.  Where  the  property  is  held  for  the 
beneficiary  by  guardians,  trustees,  or  fiduciaries,  the 
return  may  be  executed  by  such  representatives  of  the 
beneficiary. 

ART.  XXXI.  Each  beneficiary  making  return  for  any 
part  of  the  estate  is  required  by  the  law  to  give  all  the 
information  possible  regarding  any  part  of  the  estate. 
The  final  and  complete  return,  in  cases  where  no  executor 
or  administrator  acts,  will  be  compiled  by  the  collector 
from  the  several  returns  of  the  individual  beneficiaries. 
After  having  determined  in  this  matter  the  total  gross  and 
net  estate,  the  rate  of  tax,  and  the  proportionate  amount 
due  from  each  beneficiary,  the  collector  shall  notify  each 
beneficiary  accordingly,  and  will  enter  upon  the  assess- 
ment list  the  amount  of  tax  apportionable  to  each. 

ART.  XXXII.  Since  the  gross  estate  includes  the  "full 
value  of  mortgaged  property,  and  the  mortgages  are  to  be 
deducted  instead  of  being  excluded  from  the  gross  estate, 
where  such  gross  estate,  including  the  full  value  of 
mortgaged  property,  exceeds  $60,000,  the  return  must  be 
filed,  even  though  with  the  mortgages  taken  into  considera- 
tion the  net  value  is  less  than  $50,000. 

ART.  XXXIII.  In  the  case  of  property  of  a  nonresident 
decedent  in  charge  of  an  agent  or  other  representative  in 
this  country,  if  within  a  year  from  the  day  of  death  of  the 
nonresident  the  foreign  executor  has  failed  to  file  return, 
the  collector  shall  require  such  return  to  be  made  by  the 
person  having  such  property  in  possession  and  charge. 
No  deductions  whatever  may  be  taken  upon  such  a  return 
unless  there  is  a  showing  that  all  the  nonresident's  prop- 
erty is  located  in  this  country  and  is  included  in  the  gross 
estate  on  the  return. 

Under  no  circumstances  may  the  local  agent  or  repre- 
sentative release  to  a  foreign  administrator  or  executor 
or  a  foreign  beneficiary  of  the  decedent  any  property 


PART  VI  -  -  THE  STATUTES  511 

within  this  country  at  the  time  of  decedent 's  death  until 
either  (1)  the  tax  due  because  thereof  has  been  paid  or  (2) 
ancillary  letters  have  been  taken  out  in  this  country  or 
otherwise  provision  has  been  made  by  the  estate  for  the 
satisfaction  of  the  tax  lien  resting  upon  the  decedent's 
property  in  this  country.  When  such  ancillary  letters 
have  been  taken,  out  or  such  provision  has  been  made,  the 
local  agent,  representative,  etc.,  shall  immediately  inform 
the  collector  fully  as  to  the  facts. 

An  administrator  or  executor  acting  in  a  foreign 
country  will  not  be  recognized  as  relieving  others  in 
charge  or  possession  of  a  decedent's  property  from 
responsibility  for  satisfying  the  requirements  of  the  tax- 
ing act  unless  and  until  he  has  made  return  and  tendered 
payment  of  all  tax  due.  The  penalty  denounced  in  section 
210  of  the  act  will  be  asserted  against  every  agent  or 
representative  in  this  country  releasing  to  a  foreign 
administrator,  or  executor  of  beneficiary  of  the  decedent 
the  property  within  this  country,  except  where  the  require- 
ments of  this  regulation  have  been  complied  with. 

PAYMENT 

SEC.  204.  That  the  tax  shall  be  due  one  year  after  the  decedent's  death. 
If  the  tax  is  paid  before  it  is  due,  a  discount  at  the  rate  of  five  per  centum 
per  annum,  calculated  from  the  time  payment  is  made  to  the  date  when  the 
tax  is  due  shall  be  deducted.  If  the  tax  is  not  paid  within  ninety  days  after 
it  is  due,  interest  at  the  rate  of  ten  per  centum  per  annum  from  the  time  of 
the  decedent's  death  shall  be  added  as  part  of  the  tax,  unless  because  of 
claims  against  the  estate,  necessary  litigation,  or  other  unavoidable  delay 
the  collector  finds  that  the  tax  can  not  be  determined,  in  which  case  the 
interest  shall  be  at  the  rate  of  six  per  centum  per  annum  from  the  time  of 
the  decedent's  death  until  the  cause  of  such  delay  is  removed,  and  there- 
after at  the  rate  of  ten  per  centum  per  annum.  Litigation  to  defeat  the 
payment  of  the  tax  shall  not  be  deemed  necessary  litigation. 

SEC.  207.  That  the  executor  shall  pay  the  tax  to  the  collector  or  deputy 
collector.  If  for  any  reason  the  amount  of  the  tax  can  not  be  determined, 
the  payment  of  a  sum  of  money  sufficient,  in  the  opinion  of  the  collector, 
to  discharge  the  tax  shall  be  deemed  payment  in  full  of  the  tax,  except  as 
in  this  section  otherwise  provided.  If  the  amount  so  paid  exceeds  the 
amount  of  the  tax  as  finally  determined,  the  Commissioner  of  Internal 


512  INHERITANCE  TAXATION 

Revenue  shall  refund  such  excess  to  the  executor.  If  the  amount  of  the 
tax  as  finally  determined  exceeds  the  amount  so  paid,  the  commissioner 
shall  notify  the  executor  of  the  amount  of  such  excess.  From  the  time  of 
such  notification  to  the  time  of  the  final  payment  of  such  excess  part  of  the 
tax  interest  shall  be  added  thereto  at  the  rate  of  ten  per  centum  per  annum, 
and  the  amount  of  such  excess  shall  be  a  lien  upon  the  entire  gross  estate, 
except  such  part  thereof  as  may  have  been  sold  to  a  bona  fide  purchaser 
for  a  fair  consideration  in  money  or  money's  worth. 

The  collector  shall  grant  to  the  person  paying  the  tax  duplicate  receipts, 
either  of  which  shall  be  sufficient  evidence  of  such  payment,  and  shall 
entitle  the  executor  to  be  credited  and  allowed  the  amount  thereof  by 
any  court  having  jurisdiction  to  audit  or  settle  his  accounts. 

ART.  XXXIV.  Advance  payment  of  tax  in  an  estimated 
lump  amount  can  not  be  accepted.  The  initial  tax-payment 
must  be  based  upon  a  return  showing  reasonably  com- 
plete and  accurate  figures  for  every  item  of  gross  estate 
and  deductions. 

ART.  XXXV.  Discount  for  advance  payment  is  com- 
puted from  the  date  of  payment  (actual  date  of  receipt  by 
collector)  to  the  due  date,  i.  e.,  one  year  from  day  of 
death.  It  is  based  upon  a  year  of  365  days.  An  approved 
formula  for  the  computation  is:  Tax  multiplied  by  5  per 
cent.,  multiplied  by  the  exact  number  of  days  from  date 
of  payment  to  due  date,  divided  by  365  equals  discount. 
In  transmitting  payment  by  mail  allowance  must  be  made 
for  the  time  that  will  elapse  before  the  payment  is  received 
by  the  collector,  since  discount  can  be  taken  only  from  the 
date  of  actual  receipt  of  payment. 

COLLECTION  BY  COURT  PROCEEDINGS. 

SEC.  208.  That  if  the  tax  herein  imposed  is  not  paid  within  sixty  days 
after  it  is  due  the  collector  shall,  unless  there  is  reasonable  cause  for  fur- 
ther delay,  commence  appropriate  proceedings  in  any  court  of  the  United 
States,  in  the  name  of  the  United  States,  to  subject  the  property  of  the 
decedent  to  be  sold  under  the  judgment  or  decree  of  the  court.  From  the 
proceeds  of  such  sale  the  amount  of  the  tax,  together  with  the  cost  and  ex- 
penses of  every  description  to  be  allowed  by  the  court,  shall  be  first  paid 
and  the  balance  shall  be  deposited  according  to  the  order  of  the  court,  to  be 
paid  under  its  direction  to  the  person  entitled  thereto.  If  the  tax  or  any 


PART  VI  —  THE  STATUTES  513 

part  thereof  is  paid  by,  or  collected  out  of  that  part  of  the  estate  passing  to 
or  in  the  possession  of,  any  person  other  than  the  executor  in  his  capacity 
as  such,  such  person  shall  be  entitled  to  reimbursement  out  of  any  part  of 
the  estate  still  undistributed  or  by  a  just  and  equitable  contribution  by 
the  person  whose  interest  in  the  estate  of  decedent  would  have  been  reduced 
if  the  tax  had  been  paid  before  the  distribution  of  the  estate  or  whose 
interest  is  subject  to  equal  or  prior  liabilities  for  the  payment  of  taxes, 
debts,  or  other  charges  against  the  estate,  it  being  the  purpose  and  intent 
of  this  title  that  so  far  as  is  practicable  and  unless  otherwise  directed  by 
the  will  of  the  decedent  the  tax  shall  be  paid  out  of  the  estate  before  its 
distribution.. 

ART.  XXXVI.  Collectors  should  not  bring  proceedings 
for  the  collection  of  estate  tax  without  first  reporting  all 
the  facts  to  the  commissioner.  In  the  case  of  the  property 
in  this  country  of  nonresident  decedents,  it  is  apprehended 
that  there  may  arise  cases  where,  under  present  condi- 
tions, it  will  be  impossible  for  payment  of  tax  to  be  made 
upon  the  doie  date,  or  within  90  days  thereafter.  If  the 
nonresident  was  a  citizen  of  a  country  with  which  the 
United  States  may  not  be  sustaining  diplomatic  relations, 
the  collector  should  report  all  the  facts  in  his  knowledge 
to  the  commissioner  immediately  upon  the  expiration  of 
the  60  days  period  of  grace,  in  order  that  there  may  be 
no  delay  in  determining  what  steps  are  necessary  to  be 
taken  to  assure  the  collection  of  the  tax.  In  the  cases  of 
the  estates  of  decedents  who  were  citizens  of  an  allied  or 
friendly  country  the  collector  should  report  the  facts  with 
his  recommendation  at  the  expiration  of  the  90  days  after 
the  due  date. 

ART.  XXXVII.  The  provision  in  the  last  sentence  of 
section  208  merely  recognizes  the  essential  fact  that  this 
is  not  an  inheritance,  but  is  an  estate  tax.  It  is  levied 
upon  the  whole  net  estate  and  is  payable  therefrom  by 
the  executor  before  distribution  to  and  without  regard  to 
its  effect  upon  the  several  inheritors.  In  the  event,  there- 
fore, that  in  the  collection  of  the  tax  the  Government  has 
17 


514  INHERITANCE  TAXATION 

proceeded  against  that  part  of  the  estate  which  has  come 
into  possession  of  an  individual  beneficiary,  the  law  pro- 
vides an  adjustment  of  the  tax  among  the  several  benefi- 
ciaries in  such  a  manner  as  to  restore  the  condition  that 
would  have  existed  had  the  tax  been  paid  when  due,  as  a 
tax  upon  and  payable  out  of  the  whole  net  estate. 

LIEN. 

SEC.  209.  That  unless  the  tax  is  sooner  paid  in  full,  it  shall  be  a  lien 
for  ten  years  upon  the  gross  estate  of  the  decedent,  except  that  such  part 
of  the  gross  estate  as  is  used  for  the  payment  of  charges  against  the  estate 
and  expenses  of  its  administration  allowed  by  any  court  having  jurisdiction 
thereof,  shall  be  divested  of  such  lien. 

If  the  decedent  makes  a  transfer  of,  or  creates  a  trust  with  respect  to, 
any  property  in  contemplation  of  or  intended  to  take  effect  in  possession 
or  enjoyment  at  or  after  his  death  (except  in  the  case  of  a  bona  fide  sale 
for  a  fair  consideration  in  money  or  money's  worth)  and  if  the  tax  in 
respect  thereto  is  not  paid  when  due,  the  transferee  or  trustee  shall  be 
personally  liable  for  such  tax,  and  such  property,  to  the  extent  of  the 
decedent's  interest  therein  at  the  time  of  such  transfer,  shall  be  subject  to 
a  like  lien  equal  to  the  amount  of  such  tax.  Any  part  of  such  property 
sold  by  such  transferee  or  trustee  to  a  bona  fide  purchaser  for  a  fair  con- 
sideration in  money  or  money's  worth  shall  be  divested  of  the  lien  and  a 
like  lien  shall  then  attach  to  all  the  property  of  such  transferee  or  trustee, 
except  any  part  sold  to  a  bona  fide  purchaser  for  a  fair  consideration  in 
money  or  money's  worth. 

Note  in  connection  with  this  section  the  lien  provision 
in  section  207,  which  reads: 

If  for  any  reason  the  amount  of  the  tax  can  not  be  determined,  the 
payment  of  a  sum  of  money  sufficient,  in  the  opinion  of  the  collector,  to 
discharge  the  tax  shall  be  deemed  payment  in  full  of  the  tax,  except  as  in 
this  section  otherwise  provided.  If  the  amount  so  paid  exceeds  the 
amount  of  the  tax  as  finally  determined,  the  Commissioner  of  Internal 
Revenue  shall  refund  such  excess  to  the  executor.  If  the  amount  of  the 
tax  as  finally  determined  exceeds  the  amount  so  paid,  the  commissioner 
shall  notify  the  executor  of  the  amount  of  such  excess.  From  the  time  of 
such  notification  to  the  time  of  the  final  payment  of  such  excess  part  of  the 
tax,  interest  shall  be  added  thereto  at  the  rate  of  ten  per  centum,  and  the 
amount  of  such  excess  shall  be  a  lien  upon  the  entire  gross  estate,  except 
such  part  thereof  as  may  have  been  sold  to  a  bona  fide  purchaser  for  a 
fair  consideration  in  money  or  money's  worth. 


PART  VI  —  THE  STATUTES  515 

ART.  XXXVIII.  The  provisions  of  section  209  apply 
where  the  tax  shown  upon  a  final  return  to  be  due  remains 
unpaid.  The  provision  above  quoted  from  section  207 
applies  where,  after  payment  of  the  tax  shown  upon  a 
return  accepted  by  the  collector  and  the  commissioner  as 
final,  it  should  be  discovered  later,  whether  because  of 
court  decisions  necessitating  a  change  in  rulings,  or 
because  of  the  discovery  of  additional  property  subject  to 
inclusion  in  the  gross  estate,  or  for  any  other  reason,  that 
an  additional  tax  must  be  assessed.  In  other  words,  the 
tax  shown  to  be  due  upon  a  final  return  is  a  lien  for  ten 
years,  or  until  sooner  paid,  upon  the  entire  gross  estate, 
except  such  part  as  is  used  for  the  payment  of  charges 
and  expenses  of  administration,  this  lien  following  the 
property  into  the  hands  of  distributees  and  purchasers. 
But  once  the  tax  has  been  paid  upon  a  return  accepted  by 
the  commissioner  as  final,  if  later  additional  tax  is  found 
to  be  due,  the  lien  for  this  additional  tax  rests  upon  the 
property  in  the  hands  of  the  decedent's  executor  or  bene- 
ficiaries, but  does  not  rest  upon  any  part  of  the  decedent's 
property  which  may  have  been  sold  to  a  bona  fide  pur- 
chaser. 

PENALTIES. 

SEC.  210.  That  whoever  knowingly  makes  any  false  statement  in  any 
notice  or  return  required  to  be  filed  by  this  title  shall  be  liable  to  a  penalty 
of  not  exceeding  $5,000,  or  imprisonment  not  exceeding  one  year,  or  both, 
in  the  discretion  of  the  court. 

Whoever  fails  to  comply  with  any  duty  imposed  upon  him  by  section 
two  hundred  and  five,  or,  having  in  his  possession  or  control  any  record, 
file,  or  paper  containing  or  supposed  to  contain  any  information  concern- 
ing the  estate  of  the  decedent,  fails  to  exhibit  the  same  upon  request  to  the 
Commissioner  of  Internal  Revenue  or  any  collector  or  law  officer  of  the 
United  States,  or  his  duly  authorized  deputy  or  agent,  who  desires  to 
examine  the  same  in  the  performance  of  his  duties  under  this  title,  shall 
be  liable  to  a  penalty  of  not  exceeding  $500,  to  be  recovered,  with  costs  of 
suit,  in  a  civil  action  in  the  name  of  the  United  States. 

ART.  XXXIX.  It  should  be  noted  that  an  internal- 
revenue  agent,  inspector  or  deputy  collector,  or  any  duly 


516  INHERITANCE  TAXATION 

authorized  representative  of  the  commissioner,  when 
instructed  by  the  commissioner  and  after  due  request,  has 
complete  authority  to  examine  records  containing  or  by 
him  supposed  to  contain  any  data  bearing  upon  the  ques- 
tion of  the  liability  of  an  estate  to  tax.  It  is  not  necessary 
for  the  collector  to  issue  a  summons  for  the  production 
of  such  records  in  his  presence.  The  provision  in  section 
3173  E.  S.  is  supplemented,  for  the  purposes  of  this  title, 
by  the  explicit  provision  of  section  210. 

ADMINISTRATION. 

SEC.  211.  That  all  administrative,  special,  and  general  provisions  of  law, 
including  the  laws  in  relation  to  the  assessment  and  collection  of  taxes,  not 
heretofore  specifically  repealed  are  hereby  made  to  apply  to  this  title  so 
far  as  applicable  and  not  inconsistent  with  its  provisions. 

SEC.  212.  That  the  Commissioner  of  Internal  Revenue,  with  the  approval 
of  the  Secretary  of  the  Treasury,  shall  make  such  regulations  and  pre- 
scribe and  require  the  use  of  such  books  and  forms  as  he  may  deem  neces- 
sary to  carry  out  the  provisions  of  this  title. 

******* 

SEC.  902.  That  unless  otherwise  herein  specifically  provided,  this  act 
shall  take  effect  on  the  day  following  its  passage,  and  all  provisions  of 
any  act  or  acts  inconsistent  with  the  provisions  of  this  act  are  hereby 
repealed. 

Approved,  September  8,  1916. 

ART.  XL.  Collectors  will  not  report  on  the  assessment 
list,  Form  23,  estate  tax,  except  as  an  advance  collection 
and  with  each  list  forwarded  on  which  such  tax  is  reported 
from  estates  where  the  date  of  death  was  March  3,  1917, 
and  subsequent  thereto  will  be  attached  a  receipt  Form 
476,  covering  such  taxes  collected.  It  should  be  borne  in 
mind  that  only  estate  tax  under  the  act  of  March  3,  1917, 
will  be  entered  on  this  receipt  and  for  lists  closing  quarters 
of  the  fiscal  year  two  receipts  Form  476  will  be  furnished 
one  for  estate  tax  under  the  act  mentioned  and  the  other 
for  all  other  advance  collections  reported  on  that  list. 


PART  VI  —  THE  STATUTES  517 

ART.  XLI.  The  act  does  not  apply  to  the  estates  of 
decedents  who  died  on  or  before  September  8,  1916. 

W.  H.  OSBORX, 

Commissioner  of  Internal  Revenue. 
Approved : 

W.  G.  McADoo, 

Secretary  of  the  Treasury. 

C.—  THE  NEW  YORK  STATUTE. 

1.  History  and  Development. 

The  State  of  New  York  collects  from  a  half  to  a  third 
of  all  the  inheritance  taxes  and  at  least  one-half  of  all 
the  litigations  arising  from  the  imposition  of  those  taxes 
have  been  decided  by  her  courts.  Her  various  statutes 
with  all  their  experiments  and  changes  of  policy  have  been 
copied  along  with  the  construction  placed  upon  them  by 
her  courts  by  nearly  every  state  in  the  Union. 

a.     FREQUENT  CHANGES. 

In  the  course  of  the  last  forty  years  the  New  York 
statute  has  been  altered  or  amended  no  less  than  ninety- 
one  times.  She  has  taxed  all  the  personal  property  of 
collaterals  and  strangers  and  exempted  direct  heirs.  She 
has  added  real  estate  and  taxed  transfers  to  near  rela- 
tions. She  has  taxed  all  personal  property  within  the 
state  of  non-residents  and  has  exempted  such  property 
except  in  the  case  of  tangibles  and  she  is  now  drifting 
away  from  that  policy  before  the  other  states  can  follow 
her.  She  has  experimented  with  all  sorts  of  graded  rates 
and  exemptions  and  radically  changed  them  again  only 
last  year.  The  original  statutes  were  poorly  drafted  and 
ingenious  attorneys  found  many  loopholes  for  avoiding 
the  tax  on  behalf  of  their  clients.  As  fast  as  these  flaws 
were  pointed  out  by  the  courts  there  has  been  a  constant 
effort  to  patch  the  statute  and  stop  the  leaks.  In  spite  of 
all  this  the  present  act  is  fairly  consistent  and  intelligible 


518  INHERITANCE  TAXATION 

and  the  practice  under  it  well  established  and  defined. 
Most  of  its  essential  details  have  been  preserved  and  per- 
fected throughout  the  legislation  and  litigation  of  nearly 
half  a  century. 

b.     LIST  OF  THE  STATUTES. 

Following  is  a  full  list  of  all  the  inheritances  tax  statutes 
passed  by  the  New  York  Legislature  since  the  first  tax  was 
imposed  in  1885: 

Year  Chapter 

1885 483. 

1887 713. 

1889 307^79. 

1890 553. 

1891 34-215. 

1892 167, 168, 169,  399,  443. 

1893 199-704. 

1894 767. 

1895 191,  378,  515,  556,  861. 

1896 160,  908,  952,  953. 

1897 284,375. 

1898 88,289. 

1899 76,  269,  270,  389,  406,  672,  737. 

1900 379,  382,  658,  723. 

1901 173,  288,  458,  493,  609. 

1902 101,  283,  496. 

1903 41. 

1904 758,  62. 

1905 368. 

1906 Ill,  567,  699. 

1907 204,  323,  709. 

1908 310,  312,  321. 

1909 62,596. 

1910 70,  600,  706. 

1911 308,  732,  800,  803. 

1912 206,  214. 


PART  VI  —  THE  STATUTES  519 

Year  Chapter 

1913 356,  366,  639,  795. 

1915 383,  664. 

1916 80,  323,  548,  549,  550,  551,  562, 

582. 
1917 53,  128,  194,  481/482,  700. 

Most  of  these  are  merely  amendments  and  many  of  them 
are  trivial  but  only  six  times  has  the  legislature  enacted 
an  entire  statute. 

These  statutes  are: 

Laws  1885,  Chapter  483.    In  Effect  June  30. 
Laws  1887,  Chapter  713.    In  Effect  'June  25. 
Laws  1892,  Chapter  399.    In  Effect  May  1. 
Laws  1896,  Chapter  908.    In  Effect  June  15. 
Laws  1905,  Chapter  368.    In  Effect  June  1. 
Laws  1909,  Chapter  62,  Article  10.    In  Effect  Feb.  17. 

The  last  statute  is  the  present  law  which  has  been 
amended,  as  indicated,  thirty  times. 

c.     THE  FIRST  STATUTES  TAXING  ONLY  COLLATERALS. 

The  first  inheritance  tax  in  the  State  of  New  York  was 
imposed  by  Chapter  493,  L.  1885,  which  became  a  law 
June  10  of  that  year,  was  upon  the  entire  estate  of  the 
decedent  if  valued  at  more  than  $500,  and  included  all 
property  within  the  state  of  non-residents.  It  exempted 
from  any  tax  the  father,  mother,  husband,  wife,  children, 
brother,  sister,  lawful  lineal  descendants,  son-in-law, 
daughter-in-law  and  all  corporations  or  institutions 
exempted  by  law  from  general  taxation.  Upon  all  others 
it  imposed  the  flat  rate  of  5%.  It  took  effect  twenty  days 
after  its  passage. 

Matter  of  Howe,  112  N.  Y.  100. 

It  taxed  transfers  by  will  and  intestate  laws  and  trans- 
fers by  "  deed,  grant,  sale,  or  gift  made  or  intended  to 
take  effect  in  possession  or  enjoyment  after  the  death  of 
the  grantor  or  bargainer." 


520  INHERITANCE  TAXATION 

The  only  material  changes  made  by  the  second  statute, 
Laws  of  1887,  Chapter  713,  was  to  add  an  adopted  or 
mutually  acknowledged  child  to  the  exempt  class  and  make 
provision  for  the  computation  of  the  value  of  life  estates 
and  remainders  by  the  superintendent  of  insurance  on 
the  5%  basis. 

<L    THE  ACT  OF  1892,  TAXING  DIRECT  INHERITANCES. 
Chapter  399,  L.  1892,  took  effect  May  1,  1892. 

Matter  of  Milne,  76  Hun  328. 

By  the  first  section  the  description  of  transfers  in  avoid-, 
ance  of  the  tax  was  strengthened  and  made  to  read :  "  by 
deed,  grant,  bargain,  sale  or  gift  made  in  contemplation 
of  the  death  of  the  grantor,  vendor  or  donor  or  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  such 
death." 

The  tax  was  also  made  retroactive  as  to  any  such  trans- 
fers by  providing  "  such  tax  shall  also  be  imposed  when 
any  such  person  or  corporation  becomes  beneficially 
entitled  in  possession  or  expectancy  to  any  property  or 
the  income  thereof  by  any  such  transfer  whether  made 
before  or  after  the  passage  of  this  act. 

A  tax  of  \%  on  all  estates  in  personal  property  valued 
at  more  than  $10,000  was  imposed  when  the  beneficial 
interest  passed  to  the  persons  exempted  by  the  former 
statutes  excepting  bishops  and  religious  corporations. 
The  tax  at  5%  when  the  property  passed  to  others 
remained  unchanged. 

When  the  aggregate  amount  transferred  or  passing  to 
both  classes  of  taxable  persons  was  over  $500,  but  less 
than  $10,000,  the  portion  passing  to  the  5%  class  was 
taxable. 

Matter  of  Rosendahl,  40  Misc.  542 ;  82  Supp.  992. 
Matter  of  Garland,  88  App.  Div.  380 ;  84  Supp.  630. 
Matter  of  Mock,  113  App.  Div.  913;  49  Misc.  283. 
Matter  of  Corlett,  171  N.  Y.  516;  64  N.  E.  209. 


PART  VI  —  THE  STATUTES  521 

A  section  of  definitions  was  added  in  which  it  was  pro- 
vided :  * '  The  words  '  estate  '  and  '  property  '  as  used  in 
this  act  shall  be  taken  to  mean  the  property  or  interest 
therein  of  the  testator,  intestate,  grantor,  bargainer  or 
vendor  passing  or  transferred  to  those  not  specifically 
exempted  by  the  provisions  of  this  act  and  not  as  the 
property  or  interest  therein  passing  or  transferred  to 
individual  legatees,  etc." 

This  provision  made  it  clear  that  the  tax  was  imposed 
as  an  excise  on  the  right  to  transfer  and  not  as  an  impost 
upon  the  right  to  receive. 

Matter  of  Hoffman,  143  N.  Y.  327;  38  N.  E.  311. 

e.     THE  ACT  OF  1896  —  POWERS  OF  APPOINTMENT. 

In  1896  the  act  of  1892  was  incorporated  as  Article  10 
of  the  tax  law  by  Ch.  908,  L.  1896  in  effect  June  15  of  that 
year;  but  no  material  change  was  made,  excepting  that 
banks  and  safe  deposit  companies  holding  securities  of  a 
decedent  were  for  the  first  time  required  to  notify  the 
comptroller  before  delivering  them.  The  following  year, 
however,  by  ch.  284,  L.  1897  a  provision  was  added  which 
has  been  the  subject  of  much  litigation. 

It  was  found  that  valuable  estates  were  passing  under 
powers  of  appointment  created  in  wills  of  decedents  who 
had  died  before  the  inheritance  tax  laws  were  enacted. 
The  courts  were  inclined  to  the  view,  and  the  Court  of 
Appeals  subsequently  decided,  that  the  exercise  of  such 
power  was  not  taxable  under  the  statute.  (Matter  of  Har- 
beck,  161  N.  Y.  211;  55  N.  E.  850.) 

The  amendment  of  1897  added  the  following  as  a  fifth 
subdivision  to  section  220: 

"  Whenever  any  person  or  corporation  shall  exercise  a 
power  of  appointment  derived  from  any  disposition  of 
property  made  either  before  or  after  the  passage  of  this 
act,  such  appointment  when  made  shall  be  deemed  a  trans- 
fer taxable  under  the  provisions  of  this  act  in  the  same 
manner  as  though  the  property  to  which  such  appoint- 


522  INHERITANCE  TAXATION 

ment  relates  belonged  absolutely  to  the  donee  of  such 
power  and  had  been  bequeathed  or  devised  by  such  donee 
by  will;  and  whenever  any  person  or  corporation  possess- 
ing such  a  power  of  appointment  so  derived  shall  omit  or 
fail  to  exercise  the  same  within  the  time  provided  there- 
for, in  whole  or  in  part,  a  transfer  taxable  under  the  pro- 
visions of  this  act  shall  be  deemed  to  take  place  to  the 
extent  of  such  omission  or  failure,  in  the  same  manner  as 
though  the  persons  or  corporations  thereby  becoming 
entitled  to  the  possession  or  enjoyment  of  the  property 
to  which  such  power  related  had  succeeded  thereto  by  a 
will  of  the  donee  of  the  power  failing  to  exercise  such 
power,  taking  effect  at  the  time  of  such  omission  or 
failure. ' ' 

In  1899  by  Chapter  76  Section  230  was  amended  to  this 
effect:  "All  estates  upon  remainder  or  reversion  which 
vested  prior  to  June  30,  1885  but  which  will  not  come  into 
actual  possession  or  enjoyment  until  after  the  passage  of 
this  act  shall  be  assessed,  when  those  beneficially  entitled 
enter  into  possession." 

This  amendment  and  the  provision  taxing  successions 
even  though  there  was  a  failure  to  exercise  the  power  of 
appointment  were  held  unconstitutional. 

Matter  of  Pell,  171  N.  Y.  48;  63  N.  E.  789. 
Matter  of  Lansing,  182  N.  Y.  238;  74  N.  E.  882. 

These  cases  proved  a  stumbling  block  in  the  develop- 
ment of  the  transfer  tax  law  in  New  York.  The  latter 
provision  was  copied  by  Massachusetts  and  several  other 
states  and  has  there  been  upheld. 

Minot  v.  Treasurer,  207  Mass.  588;  93  N.  E.  973. 
Burnham  v.  Treasurer,  212  Mass.  165;  98  N.  E.  603 

The  tax  upon  the  succession  under  the  exercise  of  a 
power  when  the  creator  of  the  power  died  before  the 
statute  was  sustained. 

Matter  of  Dows,  167  N.  Y.  227;  60  N.  E.  439;  aff.  Orr  v.  Oilman, 
183  U.  S.  278;  22  S.  Ct.  Rep.  213. 


PART  VI  —  THE  STATUTES  523 

It  is  where  there  is  a  failure  to  exercise  that  the  New 
York  rule  diverges. 

f.  AMENDMENT  OF  1899  —  HIGHEST  RATE. 

Chapter  76,  Laws  of  1899  amended  the  rules  as  to  the 
taxation  of  contingent  remainders  which  amendment  still 
obtains  in  this  state  and  has  been  followed  in  several 
others.  It  has  been  fruitful  of  litigation  and  though  it 
has  stood  for  nearly  twenty  years  it  was  again  before  the 
Court  of  Appeals  for  construction  in  1917. 

Matter  of  Hujton,  176  App.  Div.  217;  160  Supp.  223;  aff.  220  N.  Y. 

As  it  is  incorporated  into  the  present  statute  substan- 
tially unchanged  it  requires  no  further  comment  here,  the 
topic  being  fully  considered  under  Contingent  Remainders. 

g.  ACT  OF  1905  —  REAL  ESTATE  ADDED. 

The  re-enactment  of  1905,  Chapter  368,  included  real 
estate  in  the  property  passing  to  direct  heirs  and  near 
relatives  subject  to  the  tax  of  one  per  cent,  when  the 
estate  exceeded  $10,000  and  extended  the  exemptions  to 
practically  all  religious,  charitable  or  benevolent  corpor- 
ations, including  for  the  prevention  of  cruelty  to  animals, 
and  these  provisions  are  substantially  incorporated  in 
the  present  statute.  It  was  first  taxed  by  Ch.  41,  L.  1903. 

Under  section  227  the  comptroller  or  his  representative 
was  authorized  to  examine  the  securities  of  a  decedent  in 
the  possession  of  a  bank  or  trust  company.  This  pro- 
vision is  retained  in  the  present  law  and  has  been  widely 
copied  by  other  states. 

Laws  of  1908,  Chapter  310,  added  the  following,  which  is 
retained  in  the  present  statute,  as  to  tangible  property 
of  non-residents. 

"  Whenever  the  property  of  a  resident  decedent,  or  the 
property  of  a  non-resident  decedent  within  the  state, 
transferred  by  will,  is  not  specifically  bequeathed  or 
devised,  such  property  shall,  for  the  purposes  of  this  act, 


524 


INHERITANCE  TAXATION 


be  deemed  to  be  transferred  proportionately  to,  and 
divided  pro  rata  among  all  the  general  legatees  and 
devisees  named  in  said  decedent's  will,  including  all  trans- 
fers under  a  residuary  clause  of  such  will. ' ' 

2.  The  Present  Law  and  its  Amendments. 

a.  THE  ORIGINAL  STATUTE  OF  1909. 

Nominally  the  present  inheritance  tax  law  of  the  state 
of  New  York  is  Chapter  62  of  the  laws  of  1909,  being 
Article  X  of  the  Tax  Law.  But  it  has  several  times  been 
radically  changed  by  amendment  though  chiefly  as  to  the 
theory  of  the  tax  and  the  graded  rates  and  exemptions. 
The  original  statute  was  a  substantial  re-enactment  of 
the  act  of  1905  and  a  codification  of  its  numerous  amend- 
ments. 

b.  THE  "  EEIGN  OF  TEEROR  ACT  "  OF  1910. 

The  amendment  of  1910,  Chapter  706,  is  popularly 
known  among  estate  attorneys  as  the  "  reign  of  terror  ' 
statute  on  account  of  the  high  rate  of  taxation  it  imposed. 
It  became  a  law  July  11,  1910,  and  remained  in  force  until 
it  was  repealed  and  replaced  by  the  act  of  1911,  Chapter 
732,  which  took  effect  July  21,  1911. 

It  imposed  the  rates  and  prescribed  the  exemptions 
shown  by  the  following  table : 

1910 
TABLE  OF  KATES  AND  EXEMPTIONS  UNDER  CHAPTER  706, 

L.  1910. 
In  Effect  From  July  11,  1910  to  July  21,  1911. 


CLASS    OR    RELATIONSHIP 

Exempt- 
tion 

Up  to 
25,000 

25,000 
to 
100,000 

100,000 
to 
250,000 

250,000 
to 
1,000,000 

In  excess 
of 
1,000,000 

Father,   mother,  widow,   minor 
child  

$5,000 

Percent 
1 

Percent 
2 

Percent 
3 

Per  cent 
4 

Per  cent 
5 

Husband,  adult  child,  brother, 
sister,        daughter-in-law, 
adopted  or  mutually  acknowl- 
edged child,  step-child,  lineal 
descendents. 
All  others,  except  exempt,  charit- 
able, etc.,  corporations. 

Not  taxed 
if      less 
than 
$500. 

Not  taxed 
if      less 
than 
S100. 

1 
5 

2 
10 

3 
15 

4 
20 

5 
25 

PART  VI  —  THE  STATUTES  525 

It  will  be  noticed  that  these  rates,  while  they  created 
a  panic  among  large  property  owners  in  New  York  are 
identical  with  those  now  imposed  by  several  of  the  western 
states.  As  to  direct  heirs  it  was  not  as  severe  as  the 
present  statute.  In  practical  application  no  estate  has 
ever  come  under  the  25%  rate. 

c.     A  RADICAL  CHANGE  IN  THEORY  AS  TO  TRANSFER  TAXED. 

The  whole  scheme  of  the  1910  statute  was  to  support 
the  government  by  confiscatory  rates  upon  the  very  rich 
collateral  relative  and  impose  no  burden  upon  the  moder- 
ately well  to  do. 

Heretofore  all  estates  above  $10,000  had  been  subject 
to  tax  on  the  entire  amount.  Under  the  act  of  1910  an 
exemption  was  made  to  each  beneficiary  and  the  theory 
of  the  tax  was  also  changed.  Instead  of  being  imposed 
upon  the  right  to  transfer  it  was  imposed  on  the  right  to 
receive. 

This  change  was  accomplished  by  the  amendment  of 
the  definition  section,  243,  and  the  language  is  retained 
in  the  present  law: 

§  243.  Definitions.  The  words  "  estate  "  and  "  prop- 
erty," as  used  in  this  article,  shall  be  taken  to  mean  the 
property  or  interest  therein  passing  or  transferred  to 
individual  or  corporate  legatees,  devisees,  heirs,  next  of 
kin,  grantees,  donees  or  vendees,  and  not  the  property  or 
interest  therein  of  the  decedent,  grantor,  donor,  or  vendor 
passing  or  transferred,  and  shall  include  all  property  or 
interest  therein,  whether  situated  within  or  without  this 
state.  The  word  "  transfer,"  as  used  in  this  article,  shall 
be  taken  to  include  the  passing  of  property  or  any  interest 
therein  in  possession  or  enjoyment,  present  or  future,  by 
inheritance,  descent,  devise,  bequest,  grant,  deed,  bargain, 
sale  or  gift  in  the  manner  herein  prescribed.  The  words 
"  county  treasurer  "  and  "  district  attorney,"  as  used  in 


526 


INHERITANCE  TAXATION 


this  article,  shall  be  taken  to  mean  the  treasurer  or  the 
district  attorney  of  the  county  of  the  surrogate  having 
jurisdiction  as  provided  in  section  two  hundred  and 
twenty-eight  of  this  article. 

d.     THE  AMENDMENTS  OF  1911.     TANGIBLES  AND  INTANGI- 
BLES. 

Another  radical  change  was  made  by  the  amendment  of 
1911,  Chapter  732.  It  reduced  the  graded  rates,  preserved 
the  altered  theory  of  the  tax  and  the  exemptions  to  each 
beneficiary  but  it  exempted  all  but  the  "  tangible  "  prop- 
erty of  non-resident  decedents.  As  has  been  pointed  out 
this  statute  resulted  ultimately  in  the  falling  off  of 
receipts  from  $13,000,000  to  $7,000,000. 

The  statute  eliminated  the  provision  taxing  the  succes- 
sion upon  the  failure  to  exercise  a  power  of  appointment 
in  the  estate  of  the  donee  of  the  power.  This  leaves 
property  subject  to  a  power  which  is  not  disposed  of 
in  either  will  to  pass  by  intestacy  and  has  left  open  a 
question  which  has  been  fruitful  of  litigation. 

The  rates  and  exemptions  prescribed  by  the  1911 
amendments  were  as  follows: 

TABLE    OF    RATES    AND  EXEMPTIONS    AS    ESTABLISHED    BY 
CHAPTER  732,  L.  1911. 

In  Force  From  July  21,  1911  to  May  15,  1916. 


Above 

CLASS  OR  RELATIONSHIP 

Exemp- 

exemp- 
tion 

50,000 
to 

250,000 
to 

All  in 
excess  of 

up  to 

250,000 

1,000,000 

1,000,000 

60,000 

Per  cent 

Per  cent 

Per  cent 

Per  cen 

Father,  mother,  husband,  wife,  child, 

brother,  sister,  daughter-in-law,  son- 

in-law,  adopted  child  or  mutually 

acknowledged  child,  lineal  descend- 

$5,000 

1 

2 

3 

4 

All  others,  excepting  charitable,  etc., 

corporations  

1,000 

5 

6 

7 

8 

This  amendment  was  not  retroactive. 

Matter  of  Holt,  N.  Y.  L.  J.,  March  16,  1912. 
Matter  of  Niles,  N.  Y.  L.  J.,  Jan.  5,  1912. 


PART  VI  —  THE  STATUTES  527 

e.  TAX  EXTENDED  TO  CURTESY. 

The  courts  having  held  that  a  husband's  right  of 
curtesy  and  his  right  to  succeed  to  the  personalty  of  his 
intestate  wife  this  provision  was  added  to  the  definitions 
of  Section  243: 

"  The  words  *  the  intestate  laws  of  this  state,'  as  used 
in  this  article,  shall  be  taken  to  refer  to  all  transfers  of 
property,  or  any  beneficial  interest  therein,  effected  by 
the  statute  of  descent  and  distribution  and  the  transfer 
of  any  property,  or  any  beneficial  interest  therein,  effected 
by  operation  of  law  upon  the  death  of  a  person  omitting 
to  make  a  valid  disposition  thereof,  including  a  husband's 
right  as  tenant  by  the  curtesy  or  the  right  of  a  husband 
to  succeed  to  the  personal  property  of  his  wife  who  dies 
intestate  leaving  no  decendants  her  surviving." 

f.  MAXIMUM  AND  MINIMUM. 

By  Chapter  800,  Laws  of  1911  a  well-intentioned  pro- 
vision was  added  to  Section  241,  which  has  proved  of  great 
difficulty  in  practical  application.  It  relates  to  the  tax- 
ation of  contingent  remainders  at  the  highest  rate  and  is 
still  in  the  law.  It  provides  that  the  difference  between 
the  "  highest  possible  rate  "  and  the  minimum  rate  to 
which  a  contingent  remainder  may  ultimately  be  subject 
shall  be  deposited  by  the  state,  the  interest  paid  to  the 
executors  or  trustee,  and  the  principal  sum  returned  in 
case  the  highest  rate  is  not  ultimately  due;  or  securities 
may  be  deposited  in  lieu  of  cash. 

3.  The  Problem  as  to  the  Property  of  Non-Residents. 

a.     PREVIOUS  POLICY  OF  THE  STATE. 

From  1885  until  1911  the  State  of  New  York  had  taxed 
all  personal  property  of  non-residents  within  the  state. 
Until  1912  Massachusetts  did  the  same.  The  problems 
arising  under  such  taxation  were  solved  by  the  courts  of 


528  INHERITANCE  TAXATION 

these  two  states  and  gradually  a  body  of  law  was  evolved 
through  years  of  litigation.  These  statutes  were  widely 
copied  by  the  western  states  where  the  decisions  con- 
struing them  are  authoritative. 

But  as  the  western  states  began  to  impose  high  rates 
upon   non-resident   inheritances,   it   was   found   that    the 
logical  result  was  to  impose  double  taxation.     To  avoid 
double  taxation  New  York  adopted  the  plan  evolved  by 
the  Pennsylvania  courts   of   declaring  that  "  tangible  " 
j  assets  such  as  goods,  wares  and  merchandise  had  a  situs 
'while  intangibles,  such  as  stocks  and  bonds,  evidences  of 
/'debt  and  money  on  deposit  in  banks,  followed  the  domicile 
)  of  the  owner.    It  was  expected  that  the  other  states  would 
all  fall  in  line.    Massachusetts  taxed  only  real  estate  of 
non-residents  and  exempted  her  own  residents  from  tax- 
ation on  property  out  of  the  state  which  was  taxed  else- 
where, by  amendments  adopted  in  1912. 

The  plan  offered  by  New  York  has  been  rejected  by 
three-fourths  of  the  states  for  the  simple  reason  that 
being  newer  in  development  much  of  their  most  valuable 
property  is  owned  by  non-residents.  The  Massachusetts 
plan  is  fairer  to  the  so-called  ' '  debtor  ' '  states  —  but  it 
is  the  so-called  "  creditor  "  states  that  must  take  the 
initiative. 

b.    REAL  ESTATE  OF  CORPORATIONS. 

On  the  other  hand  it  was  soon  found  that  the  experi- 
mental distinction  between  tangible  and  intangible  prop- 
erty of  non-residents  was  full  of  loopholes  which  ingenious 
attorneys  for  estates  were  not  slow  to  discover.  Non- 
residents with  large  real  estate  holdings  in  New  York 
began  forming  corporations  to  hold  the  real  estate.  The 
stock  and  bonds  of  such  a  corporation  obviously  were 
intangible.  On  the  other  hand  to  declare  all  stocks  and 
bonds  in  New  York  corporations  il  tangible  "  as  is  done  in 


PART  VI  —  THE  STATUTES  529 

New  Jersey  and  Oklahoma  was  practically  to  abolish  the 
distinction. 

c.     CO-PARTNERSHIP  ASSETS. 

It  also  became  apparent  that  the  large  proportion  of 
the  tangible  assets  owned  by  non-residents  within  the  state 
consisted  of  goods,  wares  and  merchandise  of  co-partner- 
ships. Co-partnerships  also  owned  real  estate  and  as 
the  interest  of  co-partners  is  only  in  the  surplus  after  an 
accounting  when  all  debts  have  been  paid  that  interest  is 
11  intangible." 

Matter  of  Albert  D.  Smith,  N.  Y.  Law  Journal,  Mar.  14,  1914. 
Matter  of  Ludeke,  N.  Y.  Law  Journal,  Jan.  22,  1914. 

Here  was  a  second  loophole  and  the  statute  of  1911 
obviously  required  patching.  This  was  the  patch  —  being 
an  amendment  to  section  220  by  Chapter  664,  L.  1915, 

"  When  the  transfer  is  by  will  or  intestate  law,  of  tan- 
gible property  within  the  state  or  of  any  intangible  prop- 
erty, if  evidenced  by  or  consisting  of  shares  of  stock,  bonds, 
notes  or  other  evidences  of  interest  in  any  corporation, 
joint  stock  company  or  association  wherever  incorporated 
or  organized,  except  a  corporation,  foreign  or  domestic,  or 
joint  stock  company  or  association  constituting,  being  or 
in  the  nature  of  a  moneyed  corporation,  a  railroad  or 
transportation  corporation  or  a  public  service  or  manu- 
facturing corporation  as  denned  and  classified  by  the 
laws  of  this  state,  and  the  property  represented  by  such 
shares  of  stock,  bonds,  notes  or  other  evidences  of  interest 
consists  of  real  property  which  is  located,  wholly  or  partly, 
within  the  state  of  New  York,  or  of  an  interest  in  any 
partnership  business  conducted,  wholly  or  partly,  within 
the  state  of  New  York,  in  such  proportion  as  the  vahie  of 
the  real  property  of  such  corporation,  joint  stock  company 
or  association,  or  as  the  value  of  the  entire  property  of 
such  partnership  located  in  the  state  of  New  York  bears 


530  INHERITANCE  TAXATION 

to  the  value  of  the  entire  property  of  such  corporation, 
joint  stock  company  or  association  or  partnership,  and  the 
decedent  was  a  non-resident  of  the  state  at  the  time  of  his 
death." 

d.  EXEMPTIONS. 

Until  1911  there  had  been  but  one  exemption  to  the  entire 
estate,  or  rather,  estates  of  less  than  $10,000  were  not 
taxed  at  all  when  passing  to  near  relatives  but  when  above 
that  amount  the  tax  was  levied  on  the  entire  estate.  It 
was  discovered  that  the  statute  was  so  worded  in  giving 
each  beneficiary  an  exemption  of  $5,000  in  case  of  near 
relatives  that  one  exemption  might  be  allowed  on  property 
given  in  contemplation  of  death  and  a  second  exemption  of 
a  like  amount  on  property  passing  to  the  same  beneficiary 
by  the  will  of  the  same  decedent. 

Matter  of  Hodges,  215  N.  Y.  447. 

This  was  not  the  intent  of  the  legislature  and  by  chapter 
664,  L.  1915,  the  language  of  section  221-a  was  changed  to 
mend  the  flaw. 

e.  JOINT  ESTATES. 

Another  and  more  serious  loophole  was  discovered  in 
the  matter  of  joint  bank  deposits  and  joint  holdings  of 
stock.  Estate  attorneys  had  begun  advising  their  clients 
—  particularly  married  people,  that  by  putting  large  hold- 
ings of  stock  in  their  joint  names  taxation  would  be 
avoided  on  the  death  of  either  joint  tenant  —  and  this  was 
the  result. 

Matter  of  Tilley,  166  App.  Div.  240,  151  Supp.  79 ;  aff.  215  N.  Y. 

702. 
Matter  of  Thompson,  167  App.  Div.  354,  153  Supp.  166;  aff.  217 

N.  Y.  609. 
Matter  of  Dalsimer,  167   App.   Div.   365,   153   Supp.   58;   aff.   217 

N.  Y.  608. 


PART  VI  -  -  THE  STATUTES  531 

Once  again  the  statute  had  to  be  patched.  Chapter  664, 
L.  1915,  inserted  the  following  as  sub.  7,  section  220: 

11  Whenever  intangible  property  is  held  in  the  joint 
names  of  two  or  more  persons,  or  as  tenants  by  the 
entirety,  or  is  deposited  in  banks  or  other  institutions  or 
depositaries  in  the  joint  names  of  two  or  more  persons  and 
payable  to  either  or  the  survivor,  upon  the  death  of  one 
of  such  persons  the  right  of  the  surviving  tenant  by  the 
entirety,  joint  tenant  or  joint  tenants,  person  or  persons, 
to  the  immediate  ownership  or  possession  and  enjoyment  of 
such  property  shall  be  deemed  a  transfer  taxable  under 
the  provisions  of  this  chapter  in  the  same  manner  as 
though  the  whole  property  to  which  such  transfer  relates 
belonged  absolutely  to  the  deceased  tenant  by  the  entirety, 
joint  tenant  or  joint  depositor  and  had  been  bequeathed 
to  the  surviving  tenant  by  the  entirety,  joint  tenant  or 
joint  tenants,  person  or  persons  by  such  deceased  tenant 
by  the  entirety,  joint  tenant  or  joint  depositor  by  will." 

f.     CAPITAL  INVESTED  IN  BUSINESS. 

Still  another  effort  was  made  by  chapter  323,  L.  1916,  to 
prevent  the  escape  of  intangible  personal  property  of  non- 
residents which  ought  to  pay  a  tax  and  yet  preserve  the 
new  policy  of  the  state  against  taxation  of  securities  and 
money  on  deposit  in  banks  and  trust  companies  by  non- 
residents and  the  following  was  added  to  sub.  2,  Sec.  220. 

"  Or  when  the  transfer  is  by  will  or  intestate  law  of 
capital  invested  in  business  in  the  state  by  a  non-resident 
of  the  state  doing  business  in  the  state  either  as  principal 
or  partner. ' ' 

Of  all  the  departures  from  the  theory  of  * '  intangibles  ' 
this  is  the  most  radical  and  far  reaching.    Its  inconsistency 
is   obvious.     New  York  does  not  tax  transfers  of  non- 
resident stock  in  domestic  corporations,  but  if  the  capital 
is  invested  in  a  business  that  has  not  been  incorporated 


532  INHERITANCE  TAXATION 

the  transfer  is  taxed.    Apparently  it  will  not  be  long  before 
the  Empire  state  abandons  the  whole  theory. 

The  amendment  was  recently  construed  by  the  Surro- 
gate's Court  of  New  York  County  in  Matter  of  Voorhees, 
N.  Y.  L.  J.  June  1,  1917,  165  Supp.  527,  where  Surrogate 
Fowler  said: 

"  This  is  an  appeal  by  the  executor  from  the  order 
assessing  a  tax  upon  the  decedent's  estate.  The  decedent, 
who  was  a  resident  of  South  Carolina,  died  on  the  23d  of 
June,  1916.  He  conducted  a  commission  business  in  this 
city,  and  under  the  amendment  effected  by  chapter  323  of 
the  Laws  of  1916  the  capital  invested  in  such  business  is 
subject  to  a  tax.  The  controversy  between  the  executor 
and  the  state  comptroller  relates  to  the  value  or  amount 
of  such  capital.  The  appraiser  found  that  it  was 
$73,758.59,  and  this  amount  included  $49,138.91  on  deposit 
in  the  Fidelity  Trust  Company  in  this  city.  Besides  con- 
ducting a  commission  business  in  this  city,  the  decedent 
was  engaged  in  farming  in  South  Carolina.  Each  business 
was  conducted  separately.  He  shipped  the  farm  produce 
to  his  place  of  business  in  this  city,  and  it  was  disposed  of 
in  the  same  manner  as  consignments  of  goods  made  by 
other  farmers  At  the  time  of  his  death  the  business  con- 
ducted by  him  as  commission  merchant  in  this  city  owed 
the  business  conducted  by  him  as  a  farmer  in  South 
Carolina  the  sum  of  $42,000  for  farm  produce  sold  and  not 
accounted  for.  This  sum  did  not  constitute  capital 
invested  by  the  decedent  in  business  in  this  state,  and 
should  be  deducted  from  the  amount  on  deposit  with  the 
Fidelity  Trust  Company  in  ascertaining  the  value  of  the 
taxable  assets  in  this  state.  It  is  the  fact,  not  appearances, 
which  control  taxability.  The  order  fixing  tax  will  be 
reversed  and  the  appraiser's  report  remitted  to  him  for 
the  purpose  of  making  the  deduction  indicated>  Settle 
order  on  notice." 


PART  VI  —  THE  STATUTES  533 

g.     TENANCY  BY  THE  ENTIRETY. 

Such  tenancies  have  universally  been  held  not  taxable 
on  the  death  of  one  of  the  tenants  and  New  York  is  thus 
far  the  only  state  that  has  attempted  their  taxation.  In 
the  matter  of  joint  estates  the  amendment  of  1915  had  usied 
the  word  "  intangible  "  and  had  then  attempted  to  tax  the 
devolution  on  the  death  of  one  tenant  by  the  entirety. 
This  was  nonsense  as  there  is  no  such  tenancy  of  personal 
property  and  yet  the  language  of  the  act  excluded  real 
estate.  The  word  "  intangible  '*  was  stricken  out  of  the 
first  line  of  Sec.  220,  sub.  7,  by  chapter  323,  L.  1916. 

h.    ATTEMPT  TO  DEFINE  A  "  RESIDENT." 

The  widest  loophole  in  the  act  of  1911  and  that  through 
which  millions  of  property  escaped  and  is  escaping  taxation 
is  found  in  the  facility  with  which  wealthy  people  whose 
business  is  in  New  York  can  maintain  a  domicile  in 
Vermont  where  only  collateral  inheritances  were  taxed  or 
in  Rhode  Island  which  did  not  tax  them  at  all  until  1916 
or  abroad  where  the  flag  protects  them  from  foreign 
taxation  while  they  do  not  contribute  to  the  maintenance 
of  its  glory  from  their  investments  at  home.  Many  such 
people  live  in  New  York  in  hotels  throughout  the  winter 
but  claim  domicile  at  country  homes. 

To  meet  this  situation  —  or  attempt  to  meet  it,  the  fol- 
lowing amendment  to  the  definition  section,  243,  was  added 
by  L.  1916,  chapter  551 : 

"  For  any  and  all  purposes  of  this  article  and  for  the 
just  imposition  of  the  transfer  tax,  every  person  shall  be 
deemed  to  have  died  a  resident,  and  not  a  nonresident,  of 
the  state  of  New  York,  if  and  when  such  person  shall  have 
dwelt  or  shall  have  lodged  in  this  state  during  and  for  the 
greater  part  of  any  period  of  twelve  consecutive  months  in 
the  twenty-four  months  next  preceding  his  or  her  death; 
and  .also  if  and  when  by  formal  written  instrument 


534  INHERITANCE  TAXATION 

executed  within  one  year  prior  to  his  or  her  death  or  by 
last  will  he  or  she  shall  have  declared  himself  or  herself 
to  be  a  resident  or  a  citizen  of  this  state,  notwithstanding 
that  from  time  to  time  during  such  tweny-four  months 
such  person  may  have  sojourned  outside  of  this  state  and 
whether  or  not  such  person  may  or  may  not  have  voted  or 
have  been  entitled  to  vote  or  have  been  assessed  for  taxes 
in  this  state ;  and  also  if  and  when  such  person  shall  have 
been  a  citizen  of  New  York  sojourning  outside  of  this 
state.  The  burden  of  proof  in  a  transfer  tax  proceeding 
shall  be  upon  those  claiming  exemption  by  reason  of  the 
alleged  nonresidence  of  the  deceased.  -The  wife  of  any 
person  who  would  be  deemed  a  resident  under  this  section 
shall  also  be  deemed  a  resident  and  her  estate  subject  to 
the  payment  of  a  transfer  tax  as  herein  provided,  unless 
said  wife  has  a  domicile  separate  from  him." 

i.     COMPUTATIONS. 

In  ascertaining  the  value  of  life  estates  and  remainders 
the  statute  required  calculations  to  be  made  on  the  same 
basis  that  life  insurance  premiums  are  calculated.  But 
these  calculations  are  based  on  the  payment  of  the 
premium  in  advance  and  the  payment  of  the  death  loss 
at  the  end  of  the  policy  year. 

Although  an  estate  passes  to  the  remainderman  imme- 
diately upon  the  death  of  the  life  tenant  the  same  method 
of  calculation  was  followed  on  the  theory  that  the  statute 
so  provided.  As  a  result  the  present  value  of  the  life 
estate  plus  the  present  value  of  the  remainder  did  not 
equal  the  entire  estate  by  exactly  5  per  cent,  of  the  value 
of  the  remainder.  This  represented  the  "  kitty  '  of 
insurance-  companies  but  worked  adversely  to  the  state. 

In  other  words  about  5  per  cent,  of  every  estate,  where 
there  was  a  life  use  and  a  remainder  over,  excaped  taxation 
through  this  discrepancy  and  this  had  continued  ever  since 


PAKT  VI  —  THE  STATUTES 


535 


the  statute  was  enacted  —  resulting  in  a  large  aggregate 
loss.  Through  the  influence  of  Comptroller  Travis  this 
discrepancy  was  abolished  by  Chapter  550,  L.  1916,  amend- 
ing sections  230  and  231  in  regard  to  the  calculation  of  life 
estates  and  remainders.  Hereafter  the  whole  must  equal 
the  sum  of  all  its  parts  in  calculations  of  the  inheritance 
tax. 

j.     THE  NEW  BATES  AND  EXEMPTIONS. 

This  brings  us  to  the  last  important  amendment  of  the 
present  statute.  Chapter  548,  Laws  of  1916,  in  effect  May 
15,  1916,  amended  sections  221  and  221a,  radically  chang- 
ing the  graded  rates  and"  exemptions  as  will  appear  from 
the  following  table. 

TABLE  OF  GRADED  RATES  AND  EXEMPTIONS  AS  ESTABLISHED 
BY  CHAP.  548,  L.  1916. 

In  Effect  May  15,  1916. 


Up 

25,000 

75,000 

In  excess 

CLASS  OR  RELATIONSHIP 

Amount 

to 

to 

to 

of 

exempt 

25,000 

75,000 

100,000 

100,000 

Father,  mother,  husband,  wife,  child  .  . 

$5,000 

Ptr  cent 
1 

Percent 
2 

Percent 
3 

Perceni 
4 

Legally  adopted  child  

Not    taxed    if 

1 

2 

3 

4 

less        than 

$5,000. 

Lineal  descendants  

Not    taxed    if 

1 

2 

3 

4 

less        than 

$500 

Brother,  sister,  son-in-law,  daughter- 

Not    taxed    if 

2 

3 

4 

5 

in-law,      mutually      acknowledged 

less         than 

child. 

$500. 

All  others,  except  charitable  and  other 
corporations  specifically  exempted. 

Not    taxed    if 
less         than 

5 

6 

7 

8 

$500. 

The  exemptions  in  the  foregoing  table  are  stated  in 
accordance  with  the  claims  of  the  comptroller  in  the 
official  publications  of  the  department,  that  is,  that,  except 
in  the  case  of  a  father,  mother,  husband,  wife  or  child  the 
tax  is  on  the  entire  bequest,  if  it  exceeds  the  exemption, 
but  thus  far  the  courts  have  failed  to  sustain  the  contention 
of  the  comptroller  and  have  held  that  only  the  excess  above 


536  INHERITANCE  TAXATION 

the  exemption  is  taxable.  A  bill  was  passed  by  the  legis- 
lature of  1917  clarifying  the  language,  but  was  not  signed 
by  the  governor  and  failed  to  become  a  law. 

The  question  arose  before  Surrogate  Atwell  in  Matter 
of  Bunce,  100  Misc.  385,  who  held  against  the  comp- 
troller. He  was  affirmed  without  opinion  by  the  Appellate 
Division,  Fourth  Department,  165  Supp.  426,  and  the  mat- 
ter is  now  pending  before  the  Court  of  Appeals.  The 
opinion  of  the  surrogate  is  as  follows: 

11  The  decedent  died  subsequent  to  May  15,  1916,  so  that 
the  amendment  to  the  tax  law  of  that  year,  Chapter  548, 
w^hich  became  a  law  and  went  into  effect  on  that  date 
applies  to  this  case.  Upon  transfer  tax  proceedings  it 
appeared  that  the  net  value  of  the  estate  was  $1,646.19; 
that  the  legacy  given  to  one  Loren  Van  Volkenburg, 
amounting  to  $647.54,  is  the  only  taxable  bequest.  The 
order  of  the  Surrogate  assessing  the  tax  allowed  an 
exemption  of  $500,  assessing  only  the  excess  of  $147.54 
upon  which  a  tax  of  5  per  cent,  was  levied  amounting  to 
$7.37. 

"  From  this  order  the  comptroller  has  appealed,  claim- 
ing that  no  exemption  should  have  been  allowed,  but  that 
the  tax  of  5  per  cent,  should  have  been  levied  upon  the 
whole  amount  of  the  legacy. 

"  It  seems  to  me  that  appellant's  position  is  untenable. 
His  contention  seems  to  be  based  upon  the  decision  con- 
struing the  amendment  of  1910  (Chapter  706)  in  Matter 
of  Mason,  69  Misc.  280.  'The  language  used  in  that  statute 
is  very  different  from  that  used  in  the  amendment  under 
consideration;  there  the  statute  reads:  "  If  *  *  of 
more  than  five  hundred  dollars  it  shall  be  taxable  under 
this  article.  &c." 

"  In  the  amendment  of  1916  the  statute  speaks  only  of 
1  excess  ';  section  221-c.  d.  3,  applies  to  this  case.  It 
reads,  *  Upon  all  transfers  taxable  under  this  article  of 


PAKT  VI  —  THE  STATUTES  537 

property  or  any  beneficial  interest  therein  any  amount  in 
excess  of  the  value  of  five  hundred  dollars  to  any  person 
or  corporation  *  *  *  the  tax  on  such  transfers  shall  be 
at  the  rate  of,  &c.,  &c.' 

"  Excess  is  defined  by  Webster  to  mean  l  the  degree  or 
amount  by  which  one  thing  or  number  exceeds  another; 
remainder  or  the  difference  between  two  numbers  is  the 
excess  of  one  over  the  other.'  So  in  this  statute  it  seems 
to  be  the  clear  intent  of  the  legislature  that  only  the  excess 
over  and  above  five  hundred  dollars  shall  be  taxed. 

"  This  language  is  not  new  to  the  statute;  it  is  sub- 
stantially the  same  language  that  was  employed  in  the  act 
of  1911  (Chap.  732)  under  which  exemptions  of  $5,000  to 
the  near  relatives  and  $1,000  to  collaterals  and  strangers 
have  been  allowed  without  question  and  I  can  not  see  or 
find  any  authority  or  justification  for  the  contention  now 
taken  by  the  appellant. 

"  It  is  contended  that  putting  the  exemption  of  $5,000  in 
certain  cases  in  Section  221  shows  an  intent  on  the  part  of 
the  legislature  not  to  exempt  a  legatee  enumerated  in 
s.  d.  3  of  section  221-a;  in  other  words  that  there  is  no 
exemption  given  to  a  legatee  of  that  class  unless  his  legacy 
does  not  exceed  $500.  That  would  put  the  legislature  in 
the  light  of  saying  that  a  legatee,  who  receives  a  bequest 
of  $500  or  less,  is  exempt,  but  the  legatee  who  receives  a 
bequest  of  $501  must  pay  a  tax  of  $25.00.  I  do  not  believe 
such  was  the  intention ;  but  it  seems  to  me  the  intent  of  the 
act  is  that  the  tax  should  be  levied  only  upon  the  excess 
over  and  above  the  sum  of  $500  in  all  cases  except  those 
enumerated  in  s.  d.  1  of  section  221,  in  which  the  exemp- 
tion of  $5,000  is  allowed,  and  I  cannot  see  how  the  placing 
of  certain  cases  among  the  list  of  positive  exemptions  in 
section  221  changes  the  intent  to  be  gathered  from  the 
language  employed;  and  the  provision  of  law  imposing 
these  transfer  taxes  (section  220)  is  subject  to  the 


538  INHERITANCE  TAXATION 

provisions  of  section  221  and  section  221a  whether  they  are 
called  exemptions  or  limitations. 

The  order  appealed  from  must  be  affirmed.  An  order 
may  be  entered  accordingly." 

In  support  of  his  contention  the  comptroller  cited: 

Matter  of  Mason,  69  Misc.  280 ;  126  Supp.  998. 
Matter  of  Haley,  89  Misc.  22;  152  Supp.  432. 
Matter  of  Dehnhardt,  N.  Y.  L.  J.,  April  7,  1916. 

These  authorities  all  arose  under  the  statute  of  1910; 
but  it  has  thus  far  been  held  that  the  act  of  1916  has  not 
accomplished  the  purpose  of  restoring  that  statute,  which 
was  at  least  the  intention  of  the  comptroller,  though  it 
failed  to  express  itself  under  the  decision  in  the  Bunce  case 
which  is  now  before  the  Court  of  Appeals.  It  was  certainly 
the  intention  of  those  who  advocated  the  statute  to  restore 
the  law  to  the  exemptions  of  1910  which  had  not  only  been 
construed  in  this  state  but  had  been  adopted  in  other 
jurisdictions. 

Harriott  v.  Bacon,  110  La.  342;  81  N.  W.  701. 
Stelwagen  v.  Durfee,  130  Mich.  166;  89  N.  \V.  728. 
Matter  of  Howell,  147  Pa.  St.  164;  23  A.  403. 
Dixon  v.  Eickerts,  26  Utah  215;  72  Pac.  947. 

As  the  matter  stands,  if  the  decision  in  the  Bunce  case 
is  sustained  in  the  Court  of  Appeals,  the  construction  of 
the  statute  remains  unchanged  as  established  by  the 
authorities : 

Matter  of  Jourdan,  151  App.  Div.  8;  135  Supp.  878  reversed  on  dis- 
senting opinion,  206  N.  Y.  653. 

Matter  of  Schwarz,  156  App.  Div.  931;  141  Supp.  349;  aff.  209  N.  Y. 
mem. 

Matter  of  Eaton,  79  Misc.  69;  140  Supp.  601. 

Matter  of  Kip,  N.  Y.  L.  J.,  March  28,  1912. 

These  authorities  overrule 
Matter  of  Elletson,  75  Misc.  582;  136  Supp.  455. 

k.    AMENDMENTS  OF  1917. 

These  are  of  minor  importance  and  may  be  briefly  sum- 
marized as  follows: 


PART  VI  —  THE  STATUTES  539 

Chapter  53  adds  to  the  list  of  exemptions  real  estate 
devised  to  a  municipal  corporation  in  trust  for  a  specified 
purpose. 

Chapter  128  provides  for  the  remission  of  interest  when 
the  tax  has  been  paid  by  mistake  to  the  county  treasurer 
instead  of  the  state  comptroller. 

Chapter  194  affects  the  salary  of  the  transfer  tax  clerk 
in  Onondaga  county. 

Chapter  481  raises  the  salary  of  the  transfer  tax  clerk 
in  Queens  county. 

Chapter  482  increases  the  salary  of  appraisers  in  Erie 
and  Suffolk  counties. 

Chapter  700  adds  Sec.  221-b,  which  imposes  a  penalty 
upon  estates  of  decedents  who  have  not  complied  with  the 
provisions  of  the  tax  law  with  regard  to  secured  debts. 

4.  Text  of  The  New  York  Statute  with  Amendments  to 
Date. 

Article  10  of  the  Tax  Law,  Chapter  62,  Laws  1909,  as 
amended. 

ARTICLE  10 
Taxable  Transfers 

PAGE 

Section  220.  Taxable  transfers 540 

221.  Exceptions  and  limitations-. 543 

221-a.   Rates  of  tax 545 

221-b.  Exemption  of  certain  personal  property  546 

222.  Accrual  and  payment  of  tax 547 

223.  Discount  and  interest 548 

224.  Lien  of  tax  and  collection  by  executors, 

administrators  and  trustees 549 

225.  Refund  of  tax  erroneously  paid 550 

226.  Taxes  upon  devises  and  bequests  in  lieu 

of  commissions  551 

227.  Liability  of  certain  corporations  to  tax. .  552 


540  INHERITANCE  TAXATION 

PAGE 
Section  228.  Jurisdiction  of  the  surrogate 553 

229.  Appointment    of    appraisers,    stenogra- 

phers and  clerks 554 

230.  Proceedings  by  appraiser 557 

231.  Determination  of  surrogate 560 

232.  Appeal  and  other  proceedings 561 

233.  Composition  of  transfer  tax  upon  certain 

estates 563 

234.  Surrogates*    assistants    in    New    York, 

Kings  and  other  counties 563 

235.  Proceedings  by  district  attorneys 565 

236.  Receipts  from  county  treasurer  or  comp- 

troller    567 

237.  Fees  of  county  treasurer 568 

238.  Books  and  forms  to  be  furnished  by  the 

state  comptroller  568 

239.  Reports  of  surrogate  and  county  clerk  . .  569 

240.  Reports  of  county  treasurer 570 

241.  Report  of  state  comptroller;  payment  of 

taxes ;  refunds  in  certain  cases 570 

242.  Application  of  taxes 573 

243.  Definitions 573 

244.  Exemptions  in  article  one  not  applicable  575 

245.  Limitation  of  time 575 

§  220.  Taxable  transfers.  A  tax  shall  be  and  is  hereby 
imposed  upon  the  transfer  of  any  tangible  property  within 
the  state  and  of  intangible  property,  or  of  any  interest 
therein  or  income  therefrom,  in  trust  or  otherwise,  to  per- 
sons or  corporations  in  the  following  cases,  subject  to  the 
exemptions  and  limitations  hereinafter  prescribed: 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws 
of  this  state  of  any  intangible  property,  or  of  tangible 
property  within  the  state,  from  any  person  dying  seized 
or  possessed  thereof  while  a  resident  of  the  state. 


PAKT  VI  —  THE  STATUTES  541 

2.  When  the  transfer  is  by  will  or  intestate  law,  of 
tangible  property  within  the  state  or  of  any  intangible 
property,  if  evidenced  by  or  consisting  of  shares  of  stock, 
bonds,  notes  or  other  evidences  of  interest  in  any  cor- 
poration,  joint   stock  company   or   association  wrherever 
incorporated  or  organized,  except  a  corporation,  foreign 
or  domestic,  or  joint  stock  company  or  association  con- 
stituting, being  or  in  the  nature  of  a  moneyed  corporation, 
a    railroad    or   transportation    corporation,    or    a    public 
service    or    manufacturing    corporation    as    defined    and 
classified  by  the  laws  of  this  state,  and  the  property  repre- 
sented by   such  shares  of  stock,  bonds,  notes  or  other 
evidences  of  interest  consist  of  real  property  which  is 
located,  wholly  or  partly,  within  the  state  of  New  York,  or 
of   an   interest  in   any   partnership   business   conducted, 
wholly  or  partly,  within  the  state  of  New  York,  in  such 
proportion  as  the  value  of  the  real  property  of  such  cor- 
poration, joint  stock  company  or  association,  as  the  value 
of  the  entire  property  of  such  partnership  located  in  the 
state  of  New  York  bears  to  the  value  of  the  entire  property 
of  such  corporation,  joint  stock  company  or  association  or 
partnership,  and  the  decedent  was  a  nonresident  of  the 
state  at  the  time  of  his  death;  or  when  the  transfer  is  by 
will  or  intestate  law  of  capital  invested  in  business  in  the 
state  by  a  non-resident  of  the  state  doing  business  in  the 
state  either  as  principal  or  partner. 

3.  Whenever  the  property  of  a  resident  decedent,  or  the 
property  of  a  nonresident  decedent  within  this  state,  trans- 
ferred by  will  is  not  specifically  bequeathed  or  devised, 
such  property  shall,  for  the  purposes  of  this  article,  be 
deemed  to  be  transferred  proportionately  to  and  divided 
pro   rata   among   all   the  general   legatees   and   devisees 
named  in  said  decedent's  will,  including  all  transfers  under 
a  residuary  clause  of  such  will. 

4.  When  the  transfer  is  of  intangible  property,  or  of 


542  INHERITANCE  TAXATION 

tangible  property  within  the  state,  made  by  a  resident,  or 
of  tangible  property  within  the  state  or  of  any  intangible 
property,  if  evidenced  by  or  consisting  of  shares  of  stock, 
bonds,  notes  or  other  evidences  of  interest  in  any  corpora- 
tion, joint  stock  company  or  association  wherever  incor- 
porated or  organized,  except  a  corporation,  foreign  or 
domestic,  or  joint  stock  company  or  association  constitut- 
ing, being  or  in  the  nature  of  a  moneyed  corporation,  a 
railroad  or  transportation  corporation,  or  a  public  service 
or  manufacturing  corporation  as  defined  and  classified  by 
the  laws  of  this  state,  and  the  property  represented  by  such 
shares  of  stock,  bonds,  notes  or  other  evidences  of  interest 
consists  of  real  property  wrhich  is  located,  wholly  or  partly, 
within  the  state  of  New  York,  or  of  an  interest  in  any 
partnership  business  conducted,  wholly  or  partly,  within 
the  state  of  New  York,  in  such  proportion  as  the  value  of 
the  real  property  of  such  corporation,  joint  stock  company 
or  association,  or  as  the  value  of  the  entire  property  of 
such  partnership  located  in  the  state  of  New  York  bears 
to  the  value  of  the  entire  property  of  such  corporation, 
joint  stock  company  or  association  or  partnership  made  by 
a  nonresident  or  capital  invested  in  business  in  the  state 
by  a  nonresident  of  the  state  doing  business  in  the  state 
either  as  principal  or  partner  by  deed,  grant,  bargain,  sale 
or  gift  made  in  contemplation  of  the  death  of  the  grantor, 
vendor  or  donor  or  intended  to  take  effect  in  possession 
or  enjoyment  at  or  after  such  death. 

5.  When  any  such  person  or  corporation  becomes  bene- 
ficially entitled,  in  possession  or  expectancy,  to  any  prop- 
erty or  the  income  thereof  by  any  such  transfer  whether 
made  before  or  after  the  passage  of  this  chapter. 

6.  Whenever  any  person  or  corporation  shall  exercise  a 
power  of  appointment  derived  from  any  disposition  of 
property  made  either  before  or  after  the  passage  of  this 
chapter,  such  appointment  when  made  shall  be  deemed  a 


PART  VI  —  THE  STATUTES  543 

transfer  taxable  under  the  provisions  of  this  chapter  in  the 
same  manner  as  though  the  property  to  which  such 
appointment  relates  belonged  absolutely  to  the  donee  of 
such, power  and  had  been  bequeathed  or  devised  by  such 
donee  by  will. 

7.  Whenever  property  is  held  in  the  joint  names  of  two 
or  more  persons,   or  as  tenants  by  the   entirety,   or  is 
deposited  in  banks  or  other  institutions  or  depositaries  in 
the  joint  names  of  two  or  more  persons  and  payable  to 
either  or  the  survivor,  upon  the  death  of  one  of  such  per- 
sons the  right  of  the  surviving  tenant  by  the  entirety,  joint 
tenant  or  joint  tenants,  person  or  persons,  to  the  immediate 
ownership  or  possession  and  enjoyment  of  such  property 
shall  be  deemed  a  transfer  taxable  under  the  provisions  of 
this  chapter  in  the  same  manner  -as  though  the  whole  prop- 
erty to  which  such  transfer  relates  belonged  absolutely  to 
the  deceased  tenant  by  the  entirety,  joint  tenant  or  joint 
depositor  and  had  been  bequeathed  to  the  surviving  tenant 
by  the  entirety,  joint  tenant  or  joint  tenants,  person  or 
persons,  by  such  deceased  tenant  by  the  entirety,  joint 
tenant  or  joint  depositor  by  will. 

8.  The   tax   imposed   hereby   shall  be   upon  the   clear 
market  value  of  such  property,  at  the  rates  hereinafter 
prescribed. 

[As  amended  by  chap.  706,  L.  1910;  chap.  732,  L.  1911;  chap.  664, 
L.  1915;  chap.  323,  L.  1916.] 

§  221.  Exceptions  and  limitations.  Any  property  devised 
or  bequeathed  for  religious  ceremonies,  observances  or 
commemorative  services  of  or  for  the  deceased  donor,  or 
to  any  person  who  is  a  bishop  or  to  any  religious,  educa- 
tional, charitable,  missionary,  benevolent,  hospital  or 
infirmary  corporation,  wherever  incorporated,  including 
corporations  organized  exclusively  for  bible  or  tract  pur- 
poses and  corporations  organized  for  the  enforcement  of 
laws  relating  to  children  or  animals,  or  real  property  to  a 


544  INHERITANCE  TAXATION 

municipal  corporation  in  trust  for  a  specific  public  pur- 
pose, shall  be  exempted  from  and  not  subject  to  the  pro- 
visions of  this  article.  There  shall  also  be  exempted  from 
and  not  subject  to  the  provisions  of  this  article  personal 
property  other  than  money  or  securities  bequeathed  to  a 
corporation  or  association  wherever  incorporated  or 
located,  organized  exclusively  for  the  moral  or  mental 
improvement  of  men  or  women  or  for  scientific,  literary, 
library,  patriotic,  cemetery  or  historical  purposes  or  for 
two  or  more  of  such  purposes  and  used  exclusively  for 
carrying  out  one  or  more  of  such  purposes.  But  no  such 
corporation  or  association  shall  be  entitled  to  such  exemp- 
tion if  any  officer,  member  or  employee  thereof  shall 
receive  or  may  be  lawfully  entitled  to  receive  any  pecun- 
iary profit  from  the  operations  thereof  except  reasonable 
compensation  for  services  in  effecting  one  or  more  of  such 
purposes  or  as  proper  beneficiaries  of  its  strictly  chari- 
table purposes;  or  if  the  organization  thereof  for  any 
such  avowed  purpose  be  a  guise  or  pretense  for  directly 
or  indirectly  making  any  other  pecuniary  profit  for  such 
corporation  or  association  or  for  any  of  its  members  or 
employees  or  if  it  be  not  in  good  faith  organized  or  con- 
ducted exclusively  for  one  or  more  of  such  purposes. 
There  shall  also  be  exempted  from  and  not  subject  to 
the  provisions  of  this  article  all  property  or  any  beneficial 
interest  therein  so  transferred  to  any  father,  mother, 
husband,  wife,  widow  or  child  of  the  decedent,  grantor, 
donor  or  vendor  if  the  amount  of  the  transfers  to  such 
father,  mother,  husband,  wife,  widow  or  child  is  the  sum 
of  five  thousand  dollars  or  less;  but  if  the  amount  so 
transferred  to  any  father,  mother,  husband,  wife,  widow 
or  child  is  over  five  thousand  dollars,  the  excess  above 
these  amounts,  respectively,  shall  be  taxable  at  the  rates 
set  forth  in  the  next  section. 

The  provisions  of  section  two  hundred  and  twenty-one, 


PART  VI  -  -  THE  STATUTES  545 

as  amended  by  this  act,  shall  apply  to  real  property  here- 
tofore devised  to  a  village  in  trust  for  street  purposes; 
and  any  tax  which  may  heretofore  have  heen  fixed  or 
imposed,  under  article  ten  of  the  tax  law,  on  account  of 
such  transfer  of  real  property  subsequent  to  the  twenty- 
sixth  day  of  March,  nineteen  hundred  and  thirteen,  is 
hereby  rescinded  and  revoked. 

[As  amended  by  chaps.  600  and  706,  L.  1910;  chap.  732,  L.  1911;  chap. 
206,  L.  1912;  chaps.  356  and  795,  L.  1913;  chap.  548,  L.  1916,  and  chap. 
534,  L.  1917.] 

§  221-a.  Rates  of  tax.  1.  Upon  all  transfers  taxable  under 
this  article  of  property  or  any  beneficial  interest  therein 
in  excess  of  the  value  of  five  thousand  dollars,  to  any 
father,  mother,  husband,  wife,  or  child  of  the  decedent, 
grantor,  donor  or  vendor,  or  to  any  child  adopted  as  such 
in  conformity  with  the  laws  of  this  state,  of  the  decedent, 
grantor,  donor  or  vendor,  or  upon  all  transfers  taxable 
under  this  article  of  property  or  any  beneficial  interest 
therein  in  excess  of  the  value  of  five  hundred  dollars  to 
any  lineal  descendant  of  the  decedent,  grantor,  donor  or 
vendor,  born  in  lawful  wedlock,  the  tax  on  such  transfers 
shall  be  at  the  rate  of 

One  per  centum  on  any  amount  up  to  and  including  the 
sum  of  twenty-five  thousand  dollars; 

Two  per  centum  on  the  next  seventy-five  thousand  dol- 
lars or  any  part  thereof; 

Three  per  centum  on  the  next  one  hundred  thousand 
dollars  or  any  part  thereof; 

Four  per  centum  on  the  amount  representing  the  bal- 
ance of  each  individual  transfer. 

2.  Upon  all  transfers  taxable  under  this  article  of  prop- 
erty or  any  beneficial  interest  therein  in  excess  of  the 
value  of  five  hundred  dollars  or  more,  to  a  brother,  sister, 
wife  or  widow  of  a  son,  or  the  husband  of  a  daughter  of 
the  decedent,  grantor,  donor  or  vendor,  or  to  any  child 
18 


546  INHERITANCE  TAXATION 

to  whom  any  such  decedent,  grantor,  donor  or  vendor  for 
not  less  than  ten  years  prior  to  such  transfer  stood  in 
the  mutually  acknowledged  relation  of  a  parent,  provided, 
however,  such  relationship  began  at  or  before  the  child's 
fifteenth  birthday  and  was  continuous  for  said  ten  years 
thereafter,  the  tax  on  such  transfers  shall  be  at  the  rate 
of 

Two  per  centum  on  any  amount  up  to  and  including  the 
sum  of  twenty-five  thousand  dollars; 

Three  per  centum  on  the  next  seventy-five  thousand 
dollars  or  any  part  thereof; 

Four  per  centum  on  the  next  one  hundred  thousand 
dollars  or  any  part  thereof; 

Five  per  centum  on  the  amount  representing  the  balance 
of  each  individual  transfer. 

3.  Upon  all  transfers  taxable  under  this  article  of 
property  or  any  beneficial  interest  therein  of  an  amount 
in  excess  of  the  value  of  five  hundred  dollars,  to  any  per- 
son or  corporation  other  than  those  enumerated  in  para- 
graphs one  and  two  of  this  section  the  tax  on  such  trans- 
fers shall  be  at  the  rate  of 

Five  per  centum  on  any  amount  up  to  and  including  the 
sum  of  twenty-five  thousand  dollars; 

Six  per  centum  on  the  next  seventy-five  thousand  dol- 
lars or  any  part  thereof; 

Seven  per  centum  on  the  next  one  hundred  thousand 
dollars  or  any  part  thereof; 

Eight  per  centum  on  the  amount  representing  the  bal- 
ance of  each  individual  transfer. 

[As  amended  by  chap.  732,  L.  1911;  chap.  664,  L.  1915;  chap.  548, 
L.  1916.] 

§  221-b.  Additional  tax  on  investments  in  certain  cases. 
Upon  every  transfer  of  an  investment,  as  defined  in  article 
fifteen  of  this  chapter,  taxable  under  this  article,  a  tax 
is  hereby  imposed,  in  addition  to  the  tax  imposed  by 


PART  VI  —  THE  STATUTES  547 

section  two  hundred  and  twenty-one-a,  of  five  per  centum 
of  the  appraised  inventory  value  of  such  investment, 
unless  the  tax  on  such  investment  as  prescribed  by  article 
fifteen  of  this  chapter  or  the  tax  on  a  secured  debt  as 
defined  by  former  article  fifteen  of  this  chapter  shall 
have  been  paid  on  such  investment  or  secured  debt  and 
stamp  affixed  for  a  period  including  the  date  of  the  death 
of  the  decedent  or  unless  the  personal  representatives  of 
decedent  are  able  to  prove  that  a  personal  property  tax 
was  assessed  and  paid  on  such  investment  or  secured  debt 
during  the  period  it  was  held  by  decedent;  or  unless  the 
decedent  was  actually  engaged  in  the  bona  fide  purchase 
and  sale  of  investments  as  a  business,  and  at  the  time  of 
his  death  had  maintained  an  office  or  place  of  business 
in  this  state  for  the  carrying  on  of  the  actual  bona  fide 
business  of  purchasing  and  selling  investments,  as  dis- 
tinguished from  the  purchase  thereof  for  investment  pur- 
poses, and  had  owned  and  held  such  investment  for  sale 
for  the  purpose  of  his  business  and  not  as  investment  for 
a  period  of  not  more  than  eight  months  prior  to  his  death. 
[Added  by  chap.  700,  L.  1917.] 

§  221-c.  Exemption  of  certain  personal  property.  A 
transfer  of  pictures,  statuary,  works  of  art,  antiques, 
books,  manuscripts  or  other  similar  personal  property 
shall  be  exempted  from  and  not  subject  to  the  provisions 
of  this  article,  if  within  two  years  after  such  transfer  the 
person  to  whom  such  transfer  is  made  shall  present  the 
same  to  the  state,  or  to  a  municipal  corporation  of  the 
state  for  educational,  scientific,  literary,  library,  or 
historical  purposes ;  and  if  the  tax  thereon  shall  have  been 
theretofore  paid  the  amount  thereof  shall  be  refunded  in 
accordance  with  the  provisions  of  this  article. 

[Added  by  chap.  639,  L.  1913.] 

§  222.  Accrual  and  payment  of  tax.  All  taxes  imposed 
by  this  article  shall  be  due  and  payable  at  the  time  of  the 


548  INHERITANCE  TAXATION 

transfer,  except  as  herein  otherwise  provided.  Taxes 
upon  the  transfer  of  any  estate,  property  or  interest 
therein  limited,  conditioned,  dependent  or  determinable 
upon  the  happening  of  any  contingency  or  future  event 
by  reason  of  which  the  fair  market  value  thereof  can  not 
be  ascertained  at  the  time  of  the  transfer  as  herein  pro- 
vided, shall  accrue  and  become  due  and  payable  when  the 
persons  or  corporations  beneficially  entitled  thereto  shall 
come  into  actual  possession  or  enjoyment  thereof.  Such 
tax  shall  be  paid  to  the  state  comptroller  in  a  county  in 
which  the  office  of  appraiser  is  salaried,  and  in  other 
counties,  to  the  county  treasurer,  and  said  state  comp- 
troller or  county  treasurer  shall  give,  and  every  executor, 
administrator  or  trustee  shall  take,  duplicate  receipts 
from  him  of  such  payment  as  provided  in  section  two 
hundred  and  thirty-six. 

§  223.  Discount  and  interest.  If  such  tax  is  paid  within 
six  months  from  the  accrual  thereof,  a  discount  of  five 
per  centum  shall  be  allowed  and  deducted  therefrom.  If 
such  tax  is  not  paid  within  eighteen  months  from  the 
accrual  thereof,  interest  shall  be  charged  and  collected 
thereon  at  the  rate  of  ten  per  centum  per  annum  from  the 
time  the  tax  accrued;  unless  by  reason  of  claims  made 
upon  the  estate,  necessary  litigation  or  other  unavoidable 
cause  of  delay,  such  tax  cannot  be  determined  and  paid  as 
herein  provided,  in  which  case  interest  at  the  rate  of  six 
per  centum  per  annum  shall  be  charged  upon  such  tax 
from  the  accrual  thereof  until  the  cause  of  such  delay  is 
removed,  after  which  ten  per  centum  shall  be  charged; 
provided,  however,  that  whenever  the  payment  of  any  tax 
imposed  by  this  article  and  payable  to  a  county  treasurer 
has  been  heretofore  or  shall  be  hereafter  tendered, 
through  inadvertence,  to  the  state  comptroller  within  the 
period  of  time  before  interest  attaches  to  said  tax,  if  such 
tax  is  paid  in  full  to  the  treasurer  of  the  proper  county 


PART  VI  —  THE  STATUTES  549 

within  ten  days  thereafter,  the  county  treasurer,  when 
directed  so  to  do  by  the  state  comptroller,  may  receipt 
in  full  for  such  tax  without  collecting  any  interest  imposed 
thereon  by  this  section  of  the  tax  law. 

[As  amended  by  chap.  128,  L.  1917.] 

§  224.  Lien  of  tax  and  collection  by  executors,  adminis- 
trators and  trustees.  Every  such  tax  shall  be  and  remain 
a  lien  upon  the  property  transferred  until  paid  and  the 
person  to  whom  the  property  is  so  transferred,  and  the 
executors,  administrators  and  trustees  of  every  estate  so 
transferred  shall  be  personally  liable  for  such  tax. until 
its  payment.  Every  executor,  administrator  or  trustee 
shall  have  full  power  to  sell  so  much  of  the  property  of 
the  decedent  as  will  enable  him  to  pay  such  tax  in  the 
same  manner  as  he  might  be  entitled  by  law  to  do  for  the 
payment  of  the  debts  of  the  testator  or  intestate.  Any 
such  executor,  administrator  or  trustee  having  in  charge 
or  in  trust  any  legacy  or  property  for  distribution  sub- 
ject to  such  tax  shall  deduct  the  tax  therefrom  and  shall 
pay  over  the  same  to  the  state  comptroller  or  county 
treasurer,  as  herein  provided  If  such  legacy  or  prop- 
erty be  not  in  money,  he  shall  collect  the  tax  thereon  upon 
the  appraised  value  thereof  from  the  person  entitled 
thereto.  He  shall  not  deliver  or  be  compelled  to  deliver 
any  specific  legacy  or  property  subject  to  tax  under  this 
article  to  any  person  until  he  shall  have  collected  the  tax 
thereon.  If  any  such  legacy  shall  be  charged  upon  or 
payable  out  of  real  property,  the  heir  or  devisee  shall 
deduct  such  tax  therefrom  and  pay  it  to  the  executor, 
administrator  or  trustee,  and  the  tax  shall  remain  a  lien 
or  charge  on  such  real  property  until  paid;  and  the  pay- 
ment thereof  shall  be  enforced  by  the  executor,  adminis- 
trator or  trustee  in  the  same  manner  that  payment  of 
the  legacy  might  be  enforced,  or  by  the  district  attorney 
under  section  two  hundred  and  thirty-five  of  this  chapter. 


550  INHERITANCE  TAXATION 

If  any  such  legacy  shall  be  given  in  money  to  any  such 
person  for  a  limited  period,  the  executor,  administrator 
or  trustee  shall  retain  the  tax  upon  the  whole  amount, 
but  if  it  be  not  in  money,  he  shall  make  application  to 
the  court  having  jurisdiction  of  an  accounting  by  him,  to 
make  an  apportionment,  if  the  case  require  it,  of  the  sum 
to  be  paid  into  his  hands  by  such  legatees,  and  for  such 
further  order  relative  thereto  as  the  case  may  require. 

§  225.  Refund  of  tax  erroneously  paid.  If  any  debts 
shall  be  proven  against  the  estate  of  a  decedent  after  the 
payment  of  any  legacy  or  distributive  share  thereof,  from 
which  any  such  tax  has  been  deducted  or  upon  which  it 
has  been  paid  by  the  person  entitled  to  such  legacy  or 
distributive  share,  and  such  person  is  required  by  order 
of  the  surrogate  having  jurisdiction,  on  notice  to  the  state 
comptroller,  to  refund  the  amount  of  such  debts  or  any 
part  thereof,  an  equitable  proportion  of  the  tax  shall  be 
repaid  to  him  by  the  executor,  administrator  or  trustee, 
if  the  tax  has  not  been  paid  to  the  state  comptroller  or 
county  treasurer;  or  if  such  tax  has  been  paid  to  such 
state  comptroller  or  county  treasurer,  such  officer  shall 
refund  out  of  the  funds  in  his  hands  or  custody  to  the 
credit  of  such  taxes  such  equitable  proportion  of  the  tax, 
and  credit  himself  with  the  same  in  the  account  required 
to  be  rendered  by  him  under  this  article.  If  after  the 
payment  of  any  tax  in  pursuance  of  an  order  fixing  such 
tax,  made  by  the  surrogate  having  jurisdiction,  such 
order  be  modified  or  reversed  by  the  surrogate  having 
jurisdiction  within  two  years  from  and  after  the  date  of 
entry  of  the  order  fixing  the  tax,  or  be  modified  or  reversed 
at  any  time  on  an  appeal  taken  therefrom  within  the  time 
allowed  by  law  on  due  notice  to  the  state  comptroller, 
the  state  comptroller  shall,  if  such  tax  was  paid  in  a 
county  in  which  the  office  of  appraiser  is  salaried,  refund 
to  the  executor,  administrator,  trustee,  person  or  persons 


PART  VI  —  THE  STATUTES  551 

by  whom  such  tax  was  paid,  the  amount  of  any  moneys 
paid  or  deposited  on  account  of  such  tax  in  excess  of  the 
amount  of  the  tax  fixed  by  the  order  modified  or  reversed, 
out  of  the  funds  in  his  hands  or  custody  to  the  credit  of 
such  taxes,  and  to  credit  himself  with  the  same  in  the 
account  required  to  be  rendered  by  him  under  this  article, 
or  if  paid  in  a  county  in  which  the  office  of  appraiser  is 
not  salaried,  he  shall  by  warrant  direct  and  allow  the 
county  treasurer  of  the  county  to  refund  such  amount  in 
the  same  manner;  but  no  application  for  such  refund  shall 
be  made  after  one  year  from  such  reversal  or  modification, 
unless  an  appeal  shall  be  taken  therefrom,  in  which  case 
no  such  application  shall  be  made  after  one  year  from  the 
final  determination  on  such  appeal  or  of  an  appeal  taken 
therefrom,  and  the  representatives  of  the  estate,  legatees, 
devisees  or  distributees  entitled  to  any  refund  under  this 
section  shall  not  be  entitled  to  any  interest  upon  such 
refund,  and  the  state  comptroller  shall  deduct  from  the 
fees  allowed  by  this  article  to  the  county  treasurer  the 
amount  theretofore  allowed  him  upon  such  overpayment. 
Where  it  shall  be  proved  to  the  satisfaction  of  the  surro- 
gate that  deductions  for  debts  were  allowed  upon  the 
appraisal  since  proved  to  have  been  erroneously  allowed, 
it  shall  be  lawful  for  such  surrogate  to  enter  an  order 
assessing  the  tax  upon  the  amount  wrongfully  or  errone- 
ously deducted.  This  section,  as  amended,  shall  apply  to 
appeals  and  proceedings  now  pending  and  taxes  hereto- 
fore paid  in  relation  to  which  the  period  of  one  year  from 
such  reversal  or  modification  has  not  expired  wrhen  this 
section,  as  amended,  takes  effect. 
[As  amended  by  chap.  308,  L.  1911.] 

§  226.  Taxes  upon  devises  and  bequests  in  lieu  of  com- 
missions. If  a  testator  bequeaths  or  devises  property  to 
one  or  more  executors  or  trustees  in  lieu  of  their  com- 
missions or  allowances,  or  makes  them  his  legatees  to  an 


552  INHERITANCE  TAXATION 

amount  exceeding  the  commissions  or  allowances  pre- 
scribed by  law  for  an  executor  or  trustee,  the  excess  in 
value  of  the  property  so  bequeathed  or  devised  above  the 
amount  of  commissions  or  allowances  prescribed  by  law 
in  similar  cases  shall  be  taxable  under  this  article. 

§  227.  Liability  of  certain  corporations  to  tax.  If  a 
foreign  executor,  administrator  or  trustee  shall  assign  or 
transfer  any  stock  or  obligations  in  this  state  standing  in 
the  name  of  a  decedent,  or  in  trust  for  a  decedent,  liable 
to  any  such  tax,  the  tax  shall  be  paid  to  the  state  comp- 
troller or  the  treasurer  of  the  proper  county  on  the  trans- 
fer thereof.  No  safe  deposit  company,  trust  company, 
corporation,  bank  or  other  institution,  person  or  persons 
having  in  possession  or  under  control  securities,  deposits, 
or  other  assets  belonging  to  or  standing  in  the  name  of 
a  decedent  who  was  a  resident  or  nonresident,  or  belong- 
ing to,  or  standing  in  the  joint  names  of  such  decedent  and 
one  or  more  persons,  including  the  shares  of  the  capital 
stock  of,  or  other  interests  in,  the  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution  mak- 
ing the  delivery  or  transfer  herein  provided,  shall  deliver 
or  transfer  the  same  to  the  executors,  administrators  or 
legal  representatives  of  said  decedent,  or  to  the  survivor 
or  survivors  when  held  in  the  joint  names  of  a  decedent 
and  one  or  more  persons,  or  upon  their  order  or  request, 
unless  notice  of  the  time  and  place  of  such  intended 
delivery  or  transfer  be  served  upon  the  state  comptroller 
at  least  ten  days  prior  to  said  delivery  or  transfer;  nor 
shall  any  safe  deposit  company,  trust  company,  corpo- 
ration, bank  or  other  institution,  person  or  persons  deliver 
or  transfer  any  securities,  deposits  or  other  assets  belong- 
ing to  or  standing  in  the  name  of  a  decedent,  or  belonging 
to,  or  standing  in  the  joint  names  of  a  decedent  and  one 
or  more  persons,  including  the  shares  of  the  capital  stock 


PART  VI  —  THE  STATUTES  553 

of,  or  other  interests  in,  the  safe  deposit  company,  trust 
company,  corporation,  bank  or  other  institution  making 
the  delivery  or  transfer,  without  retaining  a  sufficient  por- 
tion or  amount  thereof  to  pay  any  tax  and  interest  which 
may  thereafter  be  assessed  on  account  of  the  delivery  or 
transfer  of  such  securities,  deposits  or  other  assets,  includ- 
ing the  shares  of  the  capital  stock  of,  or  other  interests  in, 
the  safe  deposit  company,  trust  company,  corporation, 
bank  or  other  institution  making  the  delivery  or  transfer, 
under  the  provisions  of  this  article,  unless  the  state  comp- 
troller consents  thereto  in  writing.  And  it  shall  be  law- 
ful for  the  said  state  comptroller,  personally  or  by  repre- 
sentative, to  examine  said  securities,  deposits  or  assets 
at  the  time  of  such  delivery  or  transfer.  Failure  to  serve 
such  notice  or  failure  to  allow  such  examination  or  failure 
to  retain  a  sufficient  portion  or  amount  to  pay  such  tax 
and  interest  as  herein  provided  shall  render  said  safe 
deposit  company,  trust  company,  corporation,  bank  or 
other  institution,  person  or  persons  liable  to  the  payment 
of  the  amount  of  the  tax  and  interest  due  or  thereafter 
to  become  due  upon  said  securities,  deposits  or  other 
assets,  including  the  shares  of  the  capital  stock  of,  or 
other  interests  in,  the  safe  deposit  company,  trust  com- 
pany, corporation,  bank  or  other  institution  making  the 
delivery  or  transfer,  and  in  addition  thereto,  a  penalty  of 
not  less  than  five  or  more  than  twenty-five  thousand  dol- 
lars; and  the  payment  of  such  tax  and  interest  thereon, 
or  of  the  penalty  above  prescribed,  or  both,  may  be 
enforced  in  an  action  brought  by  the  state  comptroller  in 
any  court  of  competent  jurisdiction. 

§  228.  Jurisdiction  of  the  surrogate.  The  surrogate's 
court  of  every  county  of  the  state  having  jurisdiction  to 
grant  letters  testamentary  or  of  administration  upon  the 
estate  of  a  decedent  whose  property  is  chargeable  with 
any  tax  under  this  article,  or  to  appoint  a  trustee  of  such 


554  INHERITANCE  TAXATION 

estate  or  any  part  thereof,  or  to  give  ancillary  letters 
thereon,  shall  have  jurisdiction  to  hear  and  determine  all 
questions  arising  under  the  provisions  of  this  article,  and 
to  do  any  act  in  relation  thereto  authorized  by  law  to  be 
done  by  a  surrogate  in  other  matters  or  proceedings  com- 
ing within  his  jurisdiction;  and  if  two  or  more  surrogates' 
courts  shall  be  entitled  to  exercise  any  such  jurisdiction, 
the  surrogate  first  acquiring  jurisdiction  hereunder  shall 
retain  the  same  to  the  exclusion  of  every  other  surrogate. 
Every  petition  for  ancillary  letters  testamentary  or 
ancillary  letters  of  administration  made  in  pursuance  of 
the  provisions  of  article  seven,  title  three,  chapter  eighteen 
of  the  code  of  civil  procedure  shall  set  forth  the  name  of 
the  state  comptroller  as  a  person  to  be  cited  as  therein 
prescribed,  and  a  true  and  correct  statement  of  all  the 
decedent's  property  in  this  state  and  the  value  thereof; 
and  upon  the  presentation  thereof  the  surrogate  shall 
issue  a  citation  directed  to  the  state  comptroller;  and 
upon  the  return  of  the  citation  the  surrogate  shall  deter- 
mine the  amount  of  the  tax  which  may  be  or  become  due 
under  the  provisions  of  this  article  and  his  decree  award- 
ing the  letters  may  contain  any  provision  for  the  payment 
of  such  tax  or  the  giving  of  security  therefor  which  might 
be  made  by  such  surrogate  if  the  state  comptroller  were  a 
creditor  of  the  decedent. 

§  229.  Appointment  of  appraisers,  stenographers  and 
clerks.  The  state  comptroller  shall  appoint  and  may  at 
pleasure  remove  not  to  exceed  six  persons  in  the  county 
of  New  York,  four  persons  in  the  counties  of  Kings  and 
Bronx,  and  one  person  in  the  counties  of  Albany,  Dutchess, 
Erie,  Monroe,  Nassau,  Niagara,  Oneida,  Onondaga, 
Orange,  Queens,  Rensselaer,  Richmond,  Suffolk,  Chautau- 
qua  and  Westchester,  to  act  as  appraisers  therein.  The 
state  comptroller,  from  time  to  time  and  whenever  in  his 


PART  VI  —  THE  STATUTES  555 

opinion  it  is  necessary,  may  also  appoint  and  at  pleasure 
remove  not  to  exceed  two  additional  persons  to  act  as 
transfer  tax  appraisers  in  the  county  of  New  York,  to 
whom  shall  be  referred  the  appraisal  of  delinquent  estates 
pending,  before  the  transfer  tax  appraisers  in  New  York 
county,  where  more  than  eighteen  months  have  elapsed 
since  the  death  of  such  decedents,  respectively,  and  also 
to  act  as  appraiser  of  other  estates  whenever  it  shall 
appear  to  the  comptroller  that  the  services  of  such  addi- 
tional appraiser  is  necessary.  The  appraisers  so 
appointed  shall  receive  an  annual  salary  to  be  fixed  by 
the  state  comptroller,  together  with  their  actual  and 
necessary  traveling  expenses  and  witness  fees,  as  herein- 
after provided,  payable  monthly  by  the  state  comptroller 
out  of  any  funds  in  his  hands  or  custody  on  account  of 
transfer  tax.  The  salaries  of  each  of  the  appraisers  so 
appointed  shall  not  exceed  the  following  amounts:  In 
New  York  county,  four  thousand  dollars ;  in  Kings,  Bronx 
and  Erie  counties,  four  thousand  dollars;  in  Albany, 
Queens  and  Westchester  counties,  three  thousand  dollars; 
in  Onondaga  county,  two  thousand  five  hundred  dollars; 
in  Nassau,  Orange,  Rensselaer  and  Suffolk  counties,  two 
thousand  dollars;  in  Monroe  and  Oneida  counties,  one 
thousand  five  hundred  dollars;  in  Chautauqua  county, 
twelve  hundred  dollars;  in  Dutchess,  Niagara  and  Rich- 
mond counties,  one  thousand  dollars.  Each  of  the  said 
appraisers  shall  file  with  the  state  comptroller  his  oath 
of  office  and  his  official  bond  in  the  penal  sum  of  not  less 
than  one  thousand  dollars,  in  the  discretion  of  the  state 
comptroller,  conditioned  for  the  faithful  performance  of 
his  duties  as  such  appraiser,  which  bond  shall  be  approved 
by  the  attorney-general  and  the  state  comptroller.  The 
state  comptroller  shall  retain  out  of  any  funds  in  his  hands 
on  account  of  said  tax  the  following  amounts:  First,  a 
sum  sufficient  to  provide  the  appraisers  of  New  York 


556  INHERITANCE  TAXATION 

county  with  one  managing  clerk,  at  a  salary  not  to  exceed 
four  thousand  dollars  a  year,  whose  duties  shall  be  pre- 
scribed by  the  state  comptroller,  nine  stenographers, 
three  clerks,  one  examiner  of  values,  and  one  assistant 
examiner  of  values,  whose  salaries  shall  not  exceed  two 
thousand  dollars  a  year  each,  and  one  junior  clerk,  whose 
salary  shall  not  exceed  six  hundred  dollars  a  year;  the 
appraisers  of  Kings  and  Bronx  counties,  with  four  stenog- 
raphers, whose  salaries  shall  not  exceed  two  thousand 
dollars  a  year  each,  one  clerk,  whose  salary  shall  not 
exceed  one  thousand  five  hundred  dollars  a  year,  one  page 
whose  salary  shall  not  exceed  four  hundred  and  eighty 
dollars  a  year,  and  the  appraiser  of  Erie  county  with  one 
clerk,  whose  salary  shall  not  exceed  fifteen  hundred  dol- 
lars a  year,  and  the  appraiser  of  Westchester  county  with 
one  clerk,  whose  salary  shall  not  exceed  the  sum  of  twelve 
hundred  dollars  a  year,  and  the  appraiser  of  Queens 
county  with  one  clerk,  whose  salary  shall  not  exceed  the 
sum  of  fifteen  hundred  dollars  a  year,  and  the  appraiser 
of  Oneida  county  with  one  stenographer,  whose  salary 
shall  not  exceed  the  sum  of  nine  hundred  dollars  a  year, 
such  employees  to  be  appointed  by  the  state  comptroller. 
The  state  comptroller  shall  also  retain  out  of  any  funds 
in  his  hands  on  account  of  said  tax  a  sum  sufficient  to  pro- 
vide each  of  the  additional  transfer  tax  appraisers  in 
New  York  county,  whenever  appointed  as  hereinbefore 
provided,  with  a  stenographer,  whose  salary  shall  not 
exceed  the  rate  of  two  thousand  dollars  a  year,  such 
employees  to  be  appointed  by  the  state  comptroller. 
Second,  a  sum  to  be  used  in  defraying  the  expenses  for 
office  rent,  stationery,  postage,  process  serving  and  other 
similar  expenses  necessarily  incurred  in  the  appraisal  of 
estates,  not  exceeding  fifteen  thousand  dollars  a  year  in 
New  York  county,  five  thousand  dollars  a  year  in  Kings 


PART  VI  —  THE  STATUTES  557 

and  Bronx  counties  and  one  thousand  dollars  a  year  in 
Erie  and  Queens  counties. 

[As  amended  by  chap.  283,  L.  1909;  chap.  706,  L.  1910;  chap.  903, 
L.  1911;  ehap.  214,  L.  1912;  chap.  366,  L.  1913;  chap.  383,  L.  1915;  chaps. 
80  and  549,  L.  1916,  and  chap.  482,  L.  1917.] 

§  230.  Proceedings  by  appraiser.  In  each  county  in 
which  the  office  of  appraiser  is  not  salaried  the  county 
treasurer  shall  act  as  appraiser.  The  surrogate,  either 
upon  his  own  motion,  or  upon  the  application  of  any 
interested  person,  including  the  state  comptroller,  shall  by 
order  direct  the  person  or  one  of  the  persons  appointed 
pursuant  to  section  two  hundred  and  twenty-nine  of  this 
article  in.  counties  in  which  the  office  of  appraiser  is 
salaried,  and  in  other  counties,  the  county  treasurer,  to 
'fix  the  fair  market  value  of  property  of  persons  whose 
estates  shall  be  subject  to  the  payment  of  any  tax  imposed 
by  this  article. 

Every  such  appraiser  shall  forthwith  give  notice  by 
mail  to  all  persons  known  to  have  a  claim  or  interest  in 
the  property  to  be  appraised,  including  the  state  comp- 
troller, and  to  such  persons  as  the  surrogate  may  by  order 
direct,  of  the  time  and  place  when  he  will  appraise  such 
property.  He  shall  at  such  time  and  place  appraise  the 
same  at  its  fair  market  value  as  herein  prescribed;  and 
for  that  purpose  the  said  appraiser  is  authorized  to  issue 
subpoenas  and  to  compel  the  attendance  of  witnesses 
before  him  and  to  take  the  evidence  of  such  witnesses 
under  oath  concerning  such  property  and  the  value 
thereof;  and  he  shall  make  report  thereof  and  of  such 
value  in  writing,  to  the  said  surrogate,  together  with  the 
depositions  of  'the  witnesses  examined,  and  such  other 
facts  in  relation  thereto  and  to  said  matter  as  the  surro- 
gate may  order  or  require.  Every  appraiser,  except  in 
the  counties  in  which  the  office  of  appraiser  is  salaried, 
for  which  provision  is  hereinbefore  made,  shall  be  paid 


558  INHERITANCE  TAXATION 

by  the  state  comptroller  and  after  the  audit  of  said  state 
comptroller,  his  actual  and  necessary  traveling  expenses 
and  the  fees  paid  such  witnesses,  which  fees  shall  be  the 
same  as  those  now  paid  to  witnesses  subpoenaed  to  attend 
in  courts  of  record,  payment  to  be  made  out  of  the  funds 
in  the  hands  of  the  county  treasurer  of  the  proper  county 
on  account  of  the  tax  imposed  under  the  provisions  of 
this  article. 

The  value  of  every  future  or  limited  estate,  income, 
interest  or  annuity  for  any  life  or  lives  in  being,  shall  be 
determined  by  the  rule,  method  and  standard  of  mortality 
and  value  employed  by  the  superintendent  of  insurance 
in  ascertaining  the  value  of  annuities  for  the  determina- 
tion of  liabilities  of  life  insurance  companies,  except  that 
the  rate  of  interest  for  making  such  computation  shall  be 
five  per  centum  per  annum. 

In  estimating  the  value  of  any  estate  or  interest  in 
property,  to  the  beneficial  enjoyment  or  possession 
whereof"  there  are  persons  or  corporations  presently 
entitled  thereto,  no  allowance  shall  be  made  on  account 
of  any  contingent  incumbrance  thereon,  nor  on  account 
of  any  contingency  upon  the  happenings  of  which  the 
estate  or  property  or  some  part  thereof  or  interest  therein 
might  be  abridged,  defeated  or  diminished ;  provided,  how- 
ever, that  in  the  event  of  such  incumbrance  taking  effect 
as  an  actual  burden  upon  the  interest  of  the  beneficiary, 
or  in  the  event  of  the  abridgment,  defeat  or  diminution  of 
said  estate  or  property  or  interest  therein  as  aforesaid, 
a  return  shall  be  made  to  the  person  properly  entitled 
thereto  of  a  proportionate  amount  of  such  tax  on  account 
of  the  incumbrance  when  taking  effect,  or  so  much  as  will 
reduce  the  same  to  the  amount  which  would  have  been 
assessed  on  account  of  the  actual  duration  or  extent  of 
the  estate  or  interest  enjoyed.  Such  return  of  tax  shall 


PART  VI  —  THE  STATUTES  559 

be  made  in  the  manner  provided  by  section  two  hundred 
and  twenty-five  of  this  article. 

Where  any  property  shall,  after  the  passage  of  this 
chapter,  be  transferred  subject  to  any  charge,  estate  or 
interest,  determinable  by  the  death  of  any  person,  or  at 
any  period  ascertainable  only  by  reference  to  death,  the 
increase  accruing  to  any  person  or  corporation  upon  the 
extinction  or  determination  of  such  charge,  estate  or 
interest,  shall  be  deemed  a  transfer  of  property  taxable 
under  the  provisions  of  this  article  in  the  same  manner 
as  though  the  person  or  corporation  beneficially  entitled 
thereto  had  then  acquired  such  increase  from  the  person 
from  whom  the  title  to  their  respective  estates  or  interest 
is  derived 

When  property  is  transferred  in  trust  or  otherwise,  and 
the  rights,  interest  or  estates  of  the  transferees  are 
dependent  upon  contingencies  or  conditions  whereby  they 
may  be  wholly  or  in  part  created,  defeated,  extended  or 
abridged,  a  tax  shall  be  imposed  upon  said  transfer  at 
the  highest  rate  which,  on  the  happening  of  any  of  the 
said  contingencies  or  conditions,  would  be  possible  under 
the  provisions  of  this  article,  and  such  tax  so  imposed  shall 
be  due  and  payable  forthwith  by  the  executors  or  trustees 
out  of  the  property  transferred,  and  the  surrogate  shall 
enter  a  temporary  order  determining  the  amount  of  said 
tax  in  accordance  with  this  provision ;  provided,  however, 
that  on  the  happening  of  any  contingency  whereby  the 
said  property,  or  any  part  thereof,  is  transferred  to  a 
person  or  corporation  exempt  from  taxation  under  the 
provisions  of  this  article,  or  to  any  person  taxable  at  a 
rate  less  than  the  rate  imposed  and  paid,  such  person  or 
corporation  shall  be  entitled  to  a  return  of  so  much  of 
the  tax  imposed  and  paid  as  is  the  difference  between  the 
amount  paid  and  the  amount  which  said  person  or  cor- 
poration should  pay  under  the  provisions  of  this  article; 


560  INHERITANCE  TAXATION 

and  the  executor  or  trustee  of  each  estate,  or  the  legal 
representative  having  charge  of  the  trust  fund,  shall 
immediately  upon  the  happening  of  said  contingencies  or 
conditions  apply  to  the  surrogate  of  the  proper  county, 
upon  the  verified  petition  setting  forth  all  the  facts,  and 
giving  at  least  ten  days'  notice  by  mail  to  all  interested 
persons  or  corporations,  for  an  order  modifying  the  tem- 
porary taxing  order  of  said  surrogate  so  as  to  provide 
for  the  final  assessment  and  determination  of  the  tax  in 
accordance  with  the  ultimate  transfer  or  devolution  of 
said  property.  Such  return  of  overpayment  shall  be  made 
in  the  manner  provided  by  section  two  hundred  and 
twenty-five  of  this  article. 

Estates  in  expectancy  which  are  contingent  or  defeasi- 
ble and  in  which  proceedings  for  the  determination  of  the 
tax  have  not  been  taken  or  where  the  taxation  thereof  has 
been  held  in  abeyance,  shall  be  appraised  at  their*  full, 
undiminished  value  when  the  persons  entitled  thereto  shall 
come  into  the  beneficial  enjoyment  or  possession  thereof, 
without  diminution  for  or  on  account  of  any  valuation 
theretofore  made  of  the  particular  estates  for  purposes 
of  taxation,  upon  which  said  estates  in  expectancy  may 
have  been  limited 

Where  an  estate  for  life  or  for  years  can  be  divested 
by  the  act  or  omission  of  the  legatee  or  devisee  it  shall 
be  taxed  as  if  there  were  no  possibility  of  such  divesting. 

The  report  of  the  appraiser  shall  be  made  in  duplicate, 
one  of  which  duplicates  shall  be  filed  in  the  office  of  the 
surrogate  and  the  other  in  the  office  of  the  state  comp- 
troller. 

[As  amended  by  chap.  800;  L.  1911;  chap.  550,  L.  1916.] 

§  231.  Determination  of  surrogate.  From  snch  report 
of  appraisal  and  other  proof  relating  to  any  such  estate 
before  the  surrogate,  the  surrogate  shall  forthwith,  as  of 
course,  determine  the  cash  value  of  all  estates  and  the 


PAST  VI  —  THE  STATUTES  561 

amount  of  tax  to  which  the  same  are  liable;  or  the  surro- 
gate may  so  determine  the  cash  value  of  all  such  estates 
and  the  amount  of  tax  to  which  the  same  are  liable,  without 
appointing  an  appraiser. 

The  superintendent  of  insurance  shall,  on  the  applica- 
tion of  any  surrogate,  determine  the  value  of  any  such 
future  or  contingent  estates,  income  or  interest  therein 
limited  for  the  life  or  lives  of  persons  in  being,  upon  the 
facts  contained  in  any  such  appraiser's. report,  and  certify 
the  same  to  the  surrogate,  and  his  certificate  shall  be  con- 
clusive evidence  that  the  method  of  computation  adopted 
therein  is  correct. 

The  surrogate  shall  immediately  give  notice,  upon  the 
determination  by  him  as  to  the  value  of  any  estate  which 
is  taxable  under  this  article,  and  of  the  tax  to  which  it  is 
liable,  to  all  persons  known  to  be  interested  therein,  and 
shall  immediately  forward  a  copy  of  such  taxing  order  to 
the  state  comptroller.  The  surrogate  shall  also  forward 
to  the  slate  comptroller  copies  of  all  orders  entered  by 
him  in  relation  to  or  affecting  in  any  way  the  transfer  tax 
on  any  estate,  including  orders  of  exemption. 

If,  however,  it  appear  at  any  stage  of  the  proceedings 
that  any  of  such  persons  know^n  to  be  interested  in  the 
estate  is  an  infant  or  an  incompetent,  the  surrogate  may, 
if  the  interest  of  such  infant  or  incompetent  is  presently 
involved  and  is  adverse  to  that  of  any  of  the  other  persons 
interested  therein,  appoint  a  special  guardian  of  such 
infant ;  but  nothing  in  this  provision  shall  affect  the  right 
of  an  infant  over  fourteen  years  of  age  or  of  any  one  on 
behalf  of  an  infant  under  fourteen  years  of  age  to  nomi- 
nate and  apply  for  the  appointment  of  a  special  guardian 
for  such  infant  at  any  stage  of  the  proceedings. 

[As  amended  by  chap.  550,  L.  1916.] 

§  232.  Appeal  and  other  proceedings.  The  state  comp- 
troller or  any  person  dissatisfied  with  the  appraisement 


562  INHERITANCE  TAXATION 

or  assessment  and  determination  of  tax  may  appeal  there- 
from to  the  surrogate  within  sixty  days  from  the  fixing, 
assessing  and  determination  of  tax  by  the  surrogate  as 
herein  provided,  upon  filing  in  the  office  of  the  surrogate 
a  written  notice  of  appeal,  which  shall  state  the  grounds 
upon  which  the  appeal  is  taken;  but  no  costs  shall  be 
allowed  by  the  surrogate  on  such  appeal. 

Within  two  years  after  the  entry  of  an  order  or  decree 
of  a  surrogate  determining  the  value  of  an  estate  and 
assessing  the  tax  thereon,  the  state  comptroller  may,  if 
he  believes  that  such  appraisal,  assessment  or  determina- 
tion has  been  fraudulently,  collusively  or  erroneously 
made,  make  application  to  a  justice  of  the  supreme  court 
of  the  judicial  district  embracing  the  surrogate's  court  in 
which  the  order  or  decree  has  been  filed,  for  a  reappraisal 
thereof.  The  justice  to  whom  such  application  is  made 
may  thereupon  appoint  a  competent  person  to  reappraise 
such  estate.  Such  appraiser  shall  possess  the  powers  and 
be  subject  to  the  duties  of  an  appraiser  under  section  two 
hundred  and  thirty  and  shall  receive  compensation  at  the 
rate  of  five  dollars  per  day  for  every  day  actually  and 
necessarily  employed  in  such  appraisal.  Such  compensa- 
tion shall  be  payable  by  the  state  comptroller  or  county 
treasurer  out  of  any  funds  he  may  have  on  account  of  any 
tax  imposed  under  the  provisions  of  this  article,  upon  the 
certificate  of  the  justice  appointing  him.  The  report  of 
such  appraiser  shall  be  filed  with  the  justice  by  whom  he 
was  appointed,  and  thereafter  the  same  proceedings  shall 
be  taken  and  had  by  and  before  such  justice  as  are  herein 
provided  to  be  taken  and  had  by  and  before  the  surrogate. 
The  determination  and  assessment  of  such  justice  shall 
supersede  the  determination  and  assessment  of  the  surro- 
gate, and  shall  be  filed  by  such  justice  in  the  office  of  the 
state  comptroller,  and  a  certified  copy  thereof  transmitted 
to  the  surrogate's  court  of  the  proper  county. 


PART  VI  —  THE  STATUTES  563 

§  233.  Composition  of  transfer  tax  upon  certain  estates. 
The  state  comptroller,  by  and  with  the  consent  of  the 
attorney-general  expressed  in  writing,  is  hereby 
empowered  and  authorized  to  enter  into  an  agreement 
with  the  trustees  of  any  estate  in  which  remainders  or 
expectant  estates  have  been  of  such  a  nature,  or  so  dis- 
posed and  circumstanced,  that  the  taxes  therein  were  held 
not  presently  payable,  or  where  the  interests  of  the 
legatees  or  devisees  were  not  ascertainable  under  the  pro- 
visions of  chapter  four  hundred  and  eighty-three  of  the 
laws  of  eighteen  hundred  and  eighty-five;  chapter  three 
hundred  and  ninety-nine  of  the  laws  of  eighteen  hundred 
and  ninety-two,  or  chapter  nine  hundred  and  eight  of  the 
laws  of  eighteen  hundred  and  ninety-six,  and  the  several 
acts  amendatory  thereof  and  supplemental  thereto;  and 
to  compound  such  taxes  upon  such  terms  as  may  be 
deemed  equitable  and  expedient;  and  to  grant  discharge 
to  said  trustees  upon  the  payment  of  the  taxes  provided 
for  in  such  composition,  provided,  however,  that  no  such 
composition  shall  be  conclusive  in  favor  of  said  trustees 
as  against  the  interest  of  such  cestuis  que  trust  as  may 
possess  either  present  right  of  enjoyment,  or  fixed,  absolute 
or  indefeasible  rights  of  future  enjoyment,  or  of  such  as 
would  possess  such  rights  in  the  event  of  the  immediate 
termination  of  particular  estates,  unless  they  consent 
thereto,  either  personally,  when  competent,  or  by  guardian 
or  committee.  Composition  or  settlement  made  or  effected 
under  the  provisions  of  this  section  shall  be  executed  in 
triplicate,  and  one  copy  filed  in  the  office  of  the  state 
comptroller,  one  copy  in  the  office  of  the  surrogate  of  the 
county  in  which  the  tax  was  paid,  and  one  copy  delivered 
to  the  executors,  administrators  or  trustees  who  shall  be 
parties  thereto. 

§  234.  Surrogate's  assistants  in  New  York,  Kings  and 
other  counties.  The  state  comptroller  may,  upon  the 


564  iNHEBITAJifCE    TAXATION 

recommendation  of  the  surrogate,  appoint,  and  may  at 
pleasure  remove,  assistants  and  clerks  in  the  surrogate's 
offices  of  the  following  counties,  at  annual  salaries  to  be 
fixed  by  him  not  to  exceed  the  amounts  hereinafter 
specified : 

1.  In  New  York  county,  a  transfer  tax  assistant,  five 
thousand  dollars;  a  transfer  tax  clerk,  two  thousand  and 
four  hundred  dollars;  an  assistant  clerk,  eighteen  hun- 
dred dollars ;  -a  recording  clerk,  thirteen  hundred  dollars ; 
a    stenographer,    twelve   hunred    dollars;    and    shall   be 
entitled  to  expend  not  more  than  seven  hundred  and-  fifty 
dollars   a  year   in   such   office   for   expenses   necessarily 
incurred  in  the  assessment  and  collection  of  taxes  under 
this  article. 

2.  In  Kings  county,  a  transfer  tax  assistant,  four  thou- 
sand dollars;  a  deputy  transfer  tax  assistant,  three  thou- 
sand dollars;  three  transfer  tax  clerks,  one  at  a  salary  of 
two  thousand  dollars,  one  at  a  salary  of  fifteen  hundred 
dollars  and  one  at  a  salary  of  one  thousand  dollars;  and 
shall  be  entitled  to  expend  not  more  than  five  hundred 
dollars  a  year  for  expenses  necessarily  incurred  in  the 
assessment  and  collection  of  taxes  under  this  article.    The 
assistant  clerk  now  in  office  shall  continue  in  office  as  trans- 
fer tax  clerk  at  the  salary  of  fifteen  hundred  dollars. 

3.  In  Erie  county,  a  transfer  tax  clerk,  eighteen  hun- 
dred dollars. 

4.  In  Westchester  county,  a  transfer  tax  assistant,  two 
thousand  five  hundred  dollars. 

5.  In  Albany  county,  a  transfer  tax  clerk,  fifteen  hun- 
dred dollars. 

6.  In  Queens  county,  transfer  tax  clerk,  fifteen  hundred 
dollars. 

7.  In  Onondaga  county,  a  transfer  tax  clerk,  fifteen  hun- 
dred dollars;  and  shall  be  entitled  to  expend  not  more 
than  two  hundred  dollars  a  year  for  expenses  necessarily 


PART  VI  —  THE  STATUTES  565 

incurred  in  the  assessment  and  collection  of  taxes  under 
this  article. 

8.  In  Monroe  county,  two  transfer  tax  clerks,  one  thou- 
sand dollars  each ;  and  shall  be  entitled  to  expend  not  more 
than  two  hundred  dollars  a  year  for  expenses  necessarily 
incurred  in  the  assessment  and  collection  of  taxes  under 
this  article. 

9.  In  Dutchess  county,  a  transfer  tax  clerk,  nine  hun- 
dred dollars. 

10.  In  Oneida  county,  not  more  than  two  transfer  tax 
clerks,  twelve  hundred  dollars  in  the  aggregate. 

11.  In  Suffolk  county,  a  transfer  tax  clerk,  one  thousand 
dollars. 

12.  In  Ulster  county,  a  transfer  tax  clerk,  seven  hun- 
dred and  twenty  dollars. 

13.  In  Richmond  county,  a  transfer  tax  clerk,  one  thou- 
sand dollars. 

14.  In  Nassau  county,  a  transfer  tax  clerk,  twelve  hun- 
dred dollars. 

15.  In  Bronx  county,  a  transfer  tax  assistant,  two  thou- 
sand dollars. 

Such  salaries  and  expenses  shall  be  paid  monthly  by 
the  state  comptroller,  upon  proper  vouchers,  out  of  any 
funds  in  his  hands  on  account  of  taxes  collected  under  this 
article. 

[As  amended  by  chap.  70,  L.  1910;  chaps.  160,  681,  744,  L.  1910;  chap. 
45,  L.  1912;  chap.  429,  L.  1913;  chaps.  562,  582,  L.  1916,  and  chap.  194, 
L.  1917.] 

§  235.  Proceedings  by  district  attorneys.  If,  after  the 
expiration  of  eighteen  months  from  the  accrual  of  any  tax 
under  this  article,  such  tax  shall  remain  due  and  unpaid, 
after  the  refusal  or  neglect  of  the  persons  liable  therefor 
to  pay  the  same,  the  state  comptroller  shall  notify  the 
district  attorney  of  the  county,  in  writing,  of  such  failure 
or  neglect,  and  such  district  attorney  shall  apply  to  the 


566  INHERITANCE  TAXATION 

surrogate's  court  for  a  citation,  citing  the  persons  liable 
to  pay  such  tax  to  appear  before  the  court  on  the  day 
specified,  not  more  than  three  months  after  the  date  of 
such  citation,  and  show  cause  why  the  tax  should  not  be 
paid.  The  surrogate,  upon  such  application,  and  whenever 
it  shall  appear  to  him  that  any  such  tax  accruing  under 
this  article  has  not  been  paid  as  required  by  law,  shall 
issue  such  citation,  and  the  service  of  such  citation,  and 
the  time,  manner  and  proof  thereof,  and  the  hearing  and 
determination  thereon  and  the  enforcement  of  the  deter- 
mination or  order  made  by  the  surrogate  shall  conform 
to  the  provisions  of  the  code  of  civil  procedure  for  the 
service  of  citations  out  of  the  surrogate's  court,  and  the 
hearing  and  determination  thereon  and  its  enforcement  so 
far  as  the  same  may  be  applicable.  The  surrogate  or  his 
clerk  shall,  upon  request  of  the  district  attorney  or  the 
state  comptroller,  furnish,  without  fee,  one  or  more  tran- 
scripts of  such  decree,  which  shall  be  docketed  and  filed  by 
the  county  clerk  of  any  county  of  the  state  without  fee,  in 
the  same  manner  and  with  the  same  effect  as  provided  by 
law  for  filing  and  docketing  transcripts  of  decrees  of  the 
surrogate's  court.  The  costs  awarded  by  any  such  degree 
after  the  collection  and  payment  of  the  tax  to  the  state 
comptroller  or  county  treasurer  may  be  retained  by  the 
district  attorney  for  his  own  use.  Such  costs  shall  be  fixed 
by  the  surrogate  in  his  discretion,  but  shall  not  exceed  in 
any  case  where  there  has  not  been  a  contest,  the  sum  of 
one  hundred  dollars,  or  where  there  has  been  a  contest, 
the  sum  of  two  hundred  and  fifty  dollars.  Whenever  the 
surrogate  shall  certify  that  there  was  probable  cause  for 
issuing  a  citation  and  taking  the  proceedings  specified  in 
this  section,  the  state  comptroller,  after  the  same  shall 
have  been  audited  by  him,  shall  pay  all  expenses  incurred 
for  the  service  of  citations  and  other  lawful  disburse- 
ments not  otherwise  paid,  from  funds  in  his  hands  on 


PART  VI  —  THE  STATUTES  567 

account  of  such  tax,  or  in  a  county  in  which  the  office  of 
appraiser  is  not  salaried,  by  a  warrant  upon  the  county 
treasurer  of  such  county  for  the  payment  by  him  of  the 
same  from  funds  in  his  hands  on  account  of  such  tax.  In 
proceedings  to  which  the  state  comptroller  is  cited  as  a 
party  under  sections  two  hundred'  and  twenty-eight  and 
two  hundred  and  thirty  of  this  article,  he  is  authorized  to 
designate  and  retain  counsel  to  represent  him  and  to  pay 
the  expenses  thereby  incurred  out  of  the  funds  which  may 
be  in  his  hands  on  account  of  this  tax  in  any  case  in  a 
county  where  the  office  of  appraiser  is  salaried,  and  in 
any  other  county  the  state  comptroller  shall  by  warrant 
direct  the  county  treasurer  to  pay  such  expenses  out  of 
any  funds  which  may  be  in  his  hands  on  account  of  this 
tax ;  provided,  however,  that  in  the  collection  of  taxes  upon 
estates  of  non-resident  decedents  the  state  comptroller 
shall  not  allow  for  legal  services  up  to  and  including  the 
entry  of  the  order  of  the  surrogate  fixing  the  tax  a  sum 
exceeding  ten  per  centum  of  the.  taxes  and  penalties 
collected. 

§  236.  Receipts  from  county  treasurer  or  comptroller. 
One  of  the  duplicate  receipts  issued  for  the  payment  of 
any  tax  under  this  article,  as  provided  by  section  two  hun- 
dred and  twenty-two,  shall  be  countersigned  by  the  state 
treasurer  if  the  same  was  issued  by  the  state  comptroller, 
and  by  the  state  comptroller  if  issued  by  any  county 
treasurer.  The  officer  so  countersigning  the  same  shall 
charge  the  officer  receiving  the  tax  with  the  amount 
thereof  and  affix  the  seal  of  his  office  to  the  same  and 
return  to  the  proper  person;  but  no  executor,  adminis- 
trator or  trustee  shall  be  entitled  to  a  final  accounting  of 
an  estate  in  settlement  of  which  a  tax  is  due  under  the 
provisions  of  this  article  unless  he  shall  produce  a  receipt 
so  sealed  and  countersigned,  or  a  certified  copy  thereof. 


INHERITANCE  TAXATION 

Any  person  shall,  upon  the  payment  of  fifty  cents  to  the 
officer  issuing  such  receipt,  be  entitled  to  a  duplicate 
thereof,  to  be  signed,  sealed  and  countersigned  in  the  same 
manner  as  the  original. 

Any  person  shall,  upon  the  payment  of  fifty  cents,  be 
entitled  to  a  certificate  of  the  state  comptroller  that  the 
tax  upon  the  transfer  of  any  real  estate  of  which  any 
decedent  died  seized  has  been  paid,  such  certificate  to  desig- 
nate the  real  property  upon  which  such  tax  is  paid,  the 
name  of  the  person  so  paying  the  same,  and  whether  in 
full  of  such  tax.  Such  certificate  may  be  recorded  in  the 
office  of  the  county  clerk  or  register  of  the  county  where 
such  real  property  is  situate,  in  a  book  to  be  kept  by  him 
for  that  purpose,  which  shall  be  labeled  "  transfer  tax.'* 

§  237.  Fees  of  county  treasurer.  The  treasurer  of  each 
county  in  which  the  office  of  appraiser  is  not  salaried  shall 
be  allowed  to  retain,  on  all  taxes  paid  and  accounted  for 
by  him  each  fiscal  year  under  this  article,  five  per  centum 
on  the  first  fifty  thousand  dollars,  two  and  one-half  per 
centum  on  the  next  fifty  thousand  dollars,  and  one  per 
centum  on  all  additional  sums.  Such  fees  shall  be  in  addi- 
tion to  the  salaries  and  fees  now  allowed  by  law  to  such 
officers. 

§  238.  Books  and  forms  to  be  furnished  by  the  state 
comptroller.  The  state  comptroller  shall  furnish  to  each 
surrogate  a  book,  which  shall  be  a  public  record,  and  in 
which  he  shall  enter  the  name  of  every  decedent  upon 
whose  estate  an  application  to  him  has  been  made  for  the 
issue  of  letters  of  administration,  or  letters  testamentary. 
or  ancillary  letters,  the  date  and  place  of  death  of  such 
decedent,  the  estimated  value  of  his  real  and  personal 
property,  tfie  names,  places  of  residence  and  relationship 
to  him  of  his  heirs-at-law,  the  names  and  places  of  resi- 
dence of  the  legatees  and  devisees  in  any  will  of  any  such 


PAKT  VI  —  THE  STATUTES  569 

decedent,  the  amount  of  each  legacy  and  the  estimated 
value  of  any  real  property  devised  therein,  and  to  whom 
devised.  These  entries  shall  be  made  from  the  data  con- 
tained in  the  papers  filed  on  any  such  application,  or  in 
any  proceeding  relating  to  the  estate  of  the  decedent.  The 
surrogate  shall  also  enter  in  such  book  the  amount  of  the 
personal  property  of  any  such  decedent,  as  shown  by  the 
inventory  thereof  when  made  and  filed  in  his  office,  and 
the  returns  made  by  any  appraiser  appointed  by  him 
under  this  article,  and  the  value  of  annuities,  life  estates, 
terms  of  years,  and  other  property  of  any  such  decedent 
or  given  by  him  in  his  will  or  otherwise,  as  fixed  by  the 
surrogate,  and  the  tax  assessed  thereon,  and  the  amounts 
of  any  receipts  for  payment  of  any  tax  on  the  estate  of 
such  decedent  under  this  article  filed  with  him.  The  state 
comptroller  shall  also  furnish  to  each  surrogate  forms  for  / 
the  reports  to  be  made  by  such  surrogate,  which  shall 
correspond  with  the  entries  to  be  made  in  such  book. 

§  239.  Reports  of  surrogate  and  county  clerk.  Each 
surrogate  shall,  on  January,  April,  July  and  October  first 
of  each  year,  make  a  report,  upon  the  forms  furnished  by 
the  comptroller  containing  all  the  data  and  matters 
required  to  be  entered  in  such  book,  which  shall  be 
immediately  forwarded  to  the  state  comptroller.  The 
county  clerk  of  each  county,  except  in  the  counties  where 
the  registers  perform  the  duties  of  the  county  clerk  with 
respect  to  the  recording  of  deeds,  and  when  in  such 
counties  the  registers,  shall,  at  the  same  times,  make 
reports  containing  a  statement  of  any  deed  or  other  con- 
veyance filed  or  recorded  in  his  office,  of  any  property, 
which  appears  to  have  been  made  or  intended  to  take  effect 
in  possession  or  enjoyment  after  the  death  of  the  grantor 
or  vendor,  with  the  name  and  place  of  residence  of  such 
grantor  or  vendor,  the  name  and  place  of  residence  of  the 
grantee  or  vendee,  and  a  description  of  the  property 


570  INHERITANCE  TAXATION 

transferred,  which  shall  be  immediately  forwarded  to  the 
state  comptroller. 

§  240.  Reports  of  county  treasurer.  Each  county  treas- 
urer in  a  county  in  which  the  office  of  appraiser  is  not 
salaried  shall  make  a  report,  under  oath,  to  the  state 
comptroller,  on  January,  April,  July  and  October  first  of 
each  year,  of  all  taxes  received  by  him  under  this  article, 
stating  for  what  estate  and  by  whom  and  when  paid.  The 
form  of  such  report  may  be  prescribed  by  the  state  comp- 
troller. He  shall,  at  the  same  time,  pay  the  state  treasurer 
all  taxes  received  by  him  under  this  article  and  not  pre- 
viously paid  into  the  state  treasury,  except  as  provided  in 
the  next  section,  and  for  all  such  taxes  collected  by  him 
and  not  paid  into  the  state  treasury  within  thirty  days 
from  the  times  herein  required,  he  shall  pay  interest  at 
the  rate  of  ten  per  centum  per  annum. 

[As  amended  by  chap.  800,  L.  1911.] 

§  241.  Report  of  state  comptroller,  payment  of  taxes; 
refunds  in  certain  cases.  The  state  comptroller  shall 
deposit  all  taxes  collected  by  him  under  this  article,  except 
as  hereinafter  otherwise  provided,  in  a  responsible  bank, 
banking  house  or  trust  company  in  the  city  of  Albany, 
which  shall  pay  the  highest  rate  of  interest  to  the  state 
for  such  deposit,  to  the  credit  of  the  state  comptroller  on 
account  of  the  transfer  tax.  And  every  such  bank,  bank- 
ing house  or  trust  company  shall  execute  and  file  in  his 
office  an  undertaking  to  the  state,  in  the  sum,  and  with 
such  sureties,  as  are  required  and  approved  by  the  comp- 
troller, for  the  safe  keeping  and  prompt  payment  on  legal 
demand  therefor  of  all  such  moneys  held  by  or  on  deposit 
in  such  bank,  banking  house  or  trust  company,  with 
interest  thereon  on  daily  balances  at  such  rate  as  the 
comptroller  may  fix.  Every  such  undertaking  shall  have 
indorsed  thereon,  or  annexed  thereto,  the  approval  of  the 


PART  VI  —  THE  STATUTES  571 

attorney-general  as  to  its  form.  The  state  comptroller 
shall  on  the  first  day  of  each  month  make  a  verified  return 
to  the  state  treasurer  of  all  taxes  received  by  him  under 
this  article,  stating  for  what  estate,  and  by  whom  and 
when  paid;  and  shall  credit  himself  with  all  expenditures 
made  since  his  last  previous  return  on  account  of  such 
taxes,  for  salary,  refunds  or  other  purposes  lawfully 
chargeable  thereto.  He  shall  on  or  before  the  tenth  day 
of  each  month  pay  to  the  state  treasurer  the  balance  of 
such  taxes  remaining  in  his  hands  at  the  close  of  business 
on  the  last  day  of  the  previous  month,  as  appears  from 
such  returns. 

Whenever  the  tax  on  a  contingent  remainder  has  been 
determined  at  the  highest  rate  which  on  the  happening  of 
any  of  said  contingencies  or  conditions  would  be  possible 
under  the  provisions  of  this  article,  the  state  comptroller, 
in  the  counties  wherein  this  tax  is  payable  direct  to  him, 
and  in  all  other  counties  the  treasurer  of  said  counties, 
respectively,  when  such  tax  is  paid  shall  retain  and  hold 
to  the  credit  of  said  estate  so  much  of  the  tax  assessed 
upon  such  contingent  remainders  as  represents  the  differ- 
ence between  the  tax  at  the  highest  rate  and  the  tax 
upon  such  remainders  which  would  be  due  if  the  con- 
tingencies or  conditions  had  happened  at  the  date  of  the 
appraisal  of  said  estate,  and  the  state  comptroller  or  the 
county  treasurer  shall  deposit  the  amount  of  tax  so 
retained  in  some  solvent  trust  company  or  trust  companies 
or  savings  banks  in  this  state,  to  the  credit  of  such  estate, 
paying  the  interest  thereon  when  collected  by  him  to  the 
executor  or  trustee  of  said  estate,  to  be  applied  by  said 
executor  or  trustee  as  provided  by  the  decedent's  will. 
Upon  the  happening  of  the  contingencies  or  conditions 
whereby  the  remainder  ultimately  vests  in  possession,  if 
the  remainder  then  passes  to  persons  taxable  at  the 
highest  rate,  the  state  comptroller  or  the  county  treasurer 


572  INHERITANCE  TAXATION 

shall  turn  over  the  amount  so  retained  by  him  to  the  state 
treasurer  as  provided  herein  and  by  section  two  hundred 
and  forty  of  this  article,  or  if  the  remainder  ultimately 
vests  in  persons  taxable  at  a  lower  rate  or  a  person  or  cor- 
poration exempt  from  taxation  by  the  provisions  of  this 
article,  the  state  comptroller  or  the  county  treasurer  shall 
refund  any  excess  of  tax  so  held  by  him  to  the  executor 
or  trustee  of  the  estate,  to  be  disposed  of  by  said  executor 
or  trustee  as  provided  by  the  decedent's  will.  Executors 
or  trustees  of  any  estate  may  elect  to  assign  to  and  deposit 
with  the  state  comptroller  or  the  county  treasurer,  bonds 
or  other  securities  of  the  estate  approved  by  the  state 
comptroller,  or  the  county  treasurer,  both  as  to  the  form 
of  the  collateral  and  the  amount  thereof,  for  the  purpose 
of  securing  the  payment  of  the  difference  between  the  tax 
on  said  remainder  at  the  highest  rate  and  the  tax  upon 
said  remainder  which  would  be  due  if  the  contingencies  or 
conditions  had  happened  at  the  date  of  the  appraisal  of 
said  estate,  and  cash  for  the  balance  of  said  tax  as 
assessed,  which  said  bonds  or  other  securities  shall  be  held 
by  the  state  comptroller,  or  the  county  treasurer,  to  the 
credit  of  said  estate  until  the  actual  vesting  of  said 
remainders,  the  income  therefrom  when  received  by  the 
state  comptroller  or  the  county  treasurer  to  be  paid  over 
to  the  executor  or  trustee  during  the  continuance  of  the 
trust  estates  and  then  to  be  finally  disposed  of  in  accord- 
ance with  the  ultimate  transfer  or  devolution  of  said 
remainders  as  hereinbefore  provided;  and  it  shall  be  the 
duty  of  the  executors  or  trustees  of  such  estates  to  forth- 
with notify  the  state  comptroller  of  the  actual  vesting  of 
all  such  contingent  remainders. 

If  any  executor  or  trustee  shall  have  deposited  with  the 
state  comptroller,  or  the  county  treasurer,  cash  or  secur- 
ities, or  both  cash  and  securities,  to  an  amount  in  excess  of 
the  sum  necessary  to  pay  the  transfer  tax  upon  such  con- 


PABT  VI  —  THE  STATUTES  573 

tingent  remainders  at  the  highest  rate  as  aforesaid,  the 
excess  of  tax  so  deposited  shall  be  returned  to  the  executor 
or  trustee,  or  if  any  executor  or  trustee  shall  have 
deposited  with  the  state  comptroller,  or  the  county  treas- 
urer, cash  or  securities,  or  both  cash  and  securities,  to  an 
amount  less  than  is  sufficient  to  pay  the  tax  upon  such 
contingent  remainders  as  finally  assessed  and  determined, 
the  executor  or  trustee  of  said  estate  shall  forthwith,  upon 
the  entry  of  the  order  determining  the  correct  amount  of 
tax  due,  pay  to  the  state  comptroller,  or  the  county 
treasurer,  whichever  is  entitled  under  the  provisions  of 
this  article  to  receive  the  tax,  the  balance  due  on  account 
of  said  tax. 

[As  amended  by  chap.  800,  L.  1910.] 

§  242.  Application  of  taxes.  All  taxes  levied  and  col- 
lected under  this  article  when  paid  into  the  treasury  of 
the  state  shall  be  applicable  to  the  expenses  of  the  state 
government  and  to  such  other  purposes  as  the  legislature 
shall  by  law  direct. 

§  243.  Definitions.  The  word  "  estate  "  and  "  prop- 
erty," as  used  in  this  article,  shall  be  taken  to  mean  the 
property  or  interest  therein  passing  or  transferred  to 
individuals  or  corporate  legatees,  devisees,  heirs,  next  of 
kin,  grantees,  donees  or  vendees,  and  not  as  the  property 
or  interest  therein  of  the  decedent,  grantor,  donor  or 
vendor  and  shall  include  all  property  or  interest  therein, 
whether  situated  within  or  without  this  state.  The  words 
"  tangible  property  "  as  used  in  this  article  shall  be  taken 
to  mean  corporeal  property  such  as  real  estate  and  goods, 
wares  and  merchandise,  and  shall  not  be  taken  to  mean 
money,  deposits  in  bank,  shares  of  stock,  bonds,  notes, 
credits  or  evidences  of  an  interest  in  property  and 
evidences  of  debt.  The  words  "  intangible  property  "  as 
used  in  this  article  shall  be  taken  to  mean  incorporeal 


574  INHERITANCE  TAXATION 

property,  including  money,  deposits  in  bank,  shares  of 
stock,  bonds,  notes,  credits,  evidences  of  an  interest  in 
property  and  evidences  of  debt.  The  word  "  transfer,'' 
as  used  in  this  article,  shall  be  taken  to  include  the  passing 
of  property  or  any  interest  therein  in  the  possession  or 
enjoyment,  present  or  future,  by  inheritance,  descent, 
devise,  bequest,  grant,  deed,  bargain,  sale  or  gift  in  the 
manner  herein  prescribed.  The  words  "  county  treas- 
urer "  and  "  district  attorney"  as  used  in  this  article, 
shall  be  taken  to  mean  the  treasurer  or  the  district 
attorney  of  the  county  of  the  surrogate  having  jurisdic- 
tion as  provided  in  section  two  hundred  and  twenty-eight 
of  this  article.  The  words  "  intestate  laws  of  this  state," 
as  used  in  this  article,  shall  be  taken  to  refer  to  all  trans- 
fers of  property,  or  any  beneficial  interest  therein,  effected 
by  the  statute  of  descent  and  distribution  and  the  transfer 
of  any  property,  or  any  beneficial  interest  therein,  effected 
by  operation  of  law  upon  the  death  of  a  person  omitting 
to  make  a  valid  disposition  thereof,  including  a  husband's 
right  as  tenant  by  the  curtesy  or  the  right  of  a  husband  to 
succeed  to  the  personal  property  of  his  wife  who  dies 
intestate  leaving  no  descendants  her  surviving. 

For  any  and  all  purposes  of  this  article  and  for  the  just 
imposition  of  the  transfer  tax,  every  person  shall  be 
deemed  to  have  died  a  resident,  and  not  a  nonresident,  of 
the  state  of  New  York,  if  and  when  such  person  shall  have 
dwelt  or  shall  have  lodged  in  this  state  during  and  for  the 
greater  part  of  any  period  of  twelve  consecutive  months 
in  the  twenty-four  months  next  preceding  his  or  her  death ; 
and  also  if  and  when  by  formal  written  instrument 
executed  within  one  year  prior  to  his  or  her  death  or  by 
last  will  he  or  she  shall  have  declared  himself  or  herself 
to  be  a  resident  or  a  citizen  of  this  state,  notwithstanding 
that  from  time  to  time  during  such  twenty-four  months 
such  person  may  have  sojourned  outside  of  this  state  and 


PAKT  VI  —  THE  STATUTES  575 

whether  or  not  such  person  may  or  may  not  have  voted  or 
have  been  entitled  to  vote  or  have  been  assessed  for  taxes 
in  this  state ;  and  also  if  and  when  such  person  shall  have 
been  a  citizen  of  New  York  sojourning  outside  of  this 
state.  The  burden  of  proof  in  a  transfer  tax  proceeding 
shall  be  upon  those  claiming  exemption  by  reason  of  the 
alleged  non-residence  of  the  deceased.  The  wife  of  any 
person  who  would  be  deemed  a  resident  under  this  section 
shall  also  be  deemed  a  resident  and  her  estate  subject  to 
the  payment  of  a  transfer  tax  as  herein  provided,  unless 
said  wife  has  a  domicile  separate  from  him. 

[As  amended  by  chap.  706,  L.  1910;  chap.  732,  L.  1911;  chap.  551,  L. 
1916.] 

§  244.  Exemptions  in  article  one  not  applicable.  The 
exemptions  enumerated  in  section  four  of  this  chapter 
shall  not  be  construed  as  being  applicable  in  any  manner 
to  the  provisions  of  this  article. 

§  245.  Limitation  of  time.  The  provisions  of  the  code 
of  civil  procedure  relative  to  the  limitation  of  time  of 
enforcing  a  civil  remedy  shall  not  apply  to  any  proceed- 
ing or  action  taken  to  levy,  appraise,  assess,  determine  or 
enforce  the  collection  of  any  tax  or  penalty  prescribed  by 
this  article,  and  this  section  shall  be  construed  as  having 
been  in  effect  as  of  date  of  the  original  enactment  of  the 
inheritance  tax  law,  provided,  however,  that  as  to  real 
estate  in  the  hands  of  bona  fide  purchasers,  the  transfer 
tan  shall  be  presumed  to  be  paid  and  cease  to  be  a  lien  as 
against  such  purchasers  after  the  expiration  of  six  years 
from  the  date  of  accrual. 


APPENDIX. 


Forms. 

Decedent  Estate  Law  with  Consolidator's  Notes  and  index. 

Inheritance    Tax   tatutes   Sof   All   the   States    Carefully    Abstracted   and 
Digested. 


19  [577] 


FORMS. 


ORDER   APPOINTING   APPRAISER. 

The  Forms  in  New  York  State  have  largely  been  standardized  from  Judge 
McElroy's  excellent  work  on  the  Transfer  Tax  Law,  and  such  forms  as  have 
not  been  given  in  the  text  are  here  set  forth  from  "  McElroy  on  the  Transfer 
Tax  Law." 


SURROGATE'S  COURT  —  COUNTY  OF 


IN   THE  MATTER  OF  THE  TRANSFER  TAX   UPON 

ESTATE  OF 
,  DECEASED. 

On  reading  and  filing  the  petition  of  ( executor  or  adminis- 
trator)   of,  etc.,  of  said  decedent ,  Esq.,  who  is  a  per- 
son (appointed  by  the  Comptroller  or  designated  by  statute)  to  act  as 
appraiser  in  this  proceeding,  to  fix  the  fair  market  value  at  the  time  of  the 
transfer,  of  the  property  of  the  above-named  decedent  which  is  subject  to  the 
payment  of  any  tax  imposed  by  article  X  of  chapter  908  of  the  Laws  of  1896, 
and  the  acts  amendatory  thereof  and  supplemental  thereto.  (Also  any  other 
facts  in  relation  thereto  which  the  surrogate  may  desire  the  appraiser  to 
report  upon  should  be  stated  here.) 


Surrogate. 


OATH  OF  APPRAISER. 

(§  230,  Tax  Law.) 

SURROGATE'S  COURT  —  COUNTY  OF 

IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 

STATE  OF  NEW  YORK,  1  „  . 
•County  of  ,    J 

,  being  duly  sworn,  says :     I  am  the  person  directed  to  appraise 

the  property  of  the  above-named  decedent  by  order  of  Hon ,  surro- 
gate of  the  county  of  ,  State  of  New  York,  by  order  dated  the 

day  of    ,  190..,  and  in  pursuance  of  chapter  908  of  the 

Laws  of  1896,  and  the  acts  amendatory  thereof  and  supplemental  thereto, 
I  will  faithfully  and  honestly  perform  the  duties  of  such  appraiser  according 
to  the  best  of  my  understanding  and  ability. 

Sworn  to  before  me,  this day 

of ,  190.. 

Notary  Public. 
[579] 


580  INHERITANCE  TAXATION 

NOTICE  OF  HEARING  BEFORE  APPRAISER. 

(§  230,  Tax  Law.) 

SURROGATE'S  COURT  —  COUNT  OF 

IN  THK  MATTEB  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  in  RELATION  TO  THE  TAXABL 
TRANSFERS  OF  PROPERTY. 


To ,  residing  at : 

You  will  please  take  notice  that  pursuant  to  an  order  of  Hon , 

surrogate  of  the  county  of  ,  made  and  entered  the day  of 

,  190. .,  and  pursuant  to  the  provisions  of  chapter  908  of  the  Laws 

of  1896,  and  the  acts  amendatory  thereof  and  supplemental  thereto,  I  will 

on  the day  of ,  190 .  . ,  at o'clock  in  the noon 

of  that  day,  at ,  in  the ,  proceed  to  appraise  the  prop- 
erty of  the  above-named  decedent  at  its  fair  market  value  at  the  time  of 
decedent's  death,  the  transfer  of  which  property  or  some  part  thereof  is,  or 
may  be,  subject  to*the  tax  imposed  by  said  act,  or  the  acts  amendatory  thereof 
and  supplemental  thereto. 

And  such  of  you  as  are  under  the  age  of  twenty-one  years,  are  required 
to  appear  by  guardian,  if  you  have  one,  or,  if  you  have  none,  to  appear  and 
apply  for  one  to  be  appointed,  or,  in  the  event  of  your  neglect  or  failure  to  do 
«o,  a  guardian  will  be  appointed  by  the  surrogate  to  represent  and  act  for  you 
in  this  proceeding  at  any  stage  thereof,  as  provided  by  section  231  of  the 
Transfer  Tax  Law. 


Appraiser. 

Dated, ,  190 .. 

(A  copy  of  this  notice,  together  with  an  affidavit  of  mailing  the  same  to 
all  the  persons  interested  in  said  estate,  naming  them,  should  be  attached  to 
each  of  the  appraiser's  reports.) 

SUBPOJNA. 
THE  PEOPLE  OF  THE  STATE  OP  NEW  YORK, 

To ,  GREETING: 

WB  COMMAND  YOU,  that  all  business  and  excuses  being  laid  aside,  you  and 

each  of  you  appear  and  attend  at  ,  in  the  city   (or  village)   of 

,  on  the    day  of    ,  190 ..,  at    o'clock,  in 

the noon  of  that  day,  before  the  undersigned,  heretofore  duly  desig- 
nated the  appraiser  by  Hon ,  surrogate  of  the  county  of , 

under  the  act  in  relation  to  the  taxable  transfers  of  property,  in  a  proceeding 
now  pending  in  the  said  Surrogate's  Court,  entitled,  "  In  the  Matter  of  the 

Appraisal  of  the  Estate  of   ,  Deceased,"  to  testify  what  you  and 

each  of  you  may  know  concerning  the  estate  or  property  of  the  said  decedent 
on  the  part  of  (the  executors  or  other  interested  party) ,  and  that  you  produce 

or  bring  with  you  at  the  time  and  place  aforesaid ( to  be  filled  in 

vtt,  accordance  with  the  requirements  of  each  case) .  And  for  a  failure  to 
attend  or  a  failure  to  produce  the  (books,  papers,  etc.,  above  required)  you 
will  be  deemed  guilty  of  a  contempt  of  court  and  liable  to  pay  all  loss  and 
damages  sustained  thereby  to  the  party  aggrieved,  and  in  addition  thereto, 
forfeit  the  sum  of  fifty  dollars. 

Witness    ,  appraiser  aforesaid  at   ,  in  the  city    (or 

village)  of  ,  this day  of ,  190. . 

, 

Appraiser. 


FORMS  581 

APPLICATION  TO  SUPERINTENDENT  OF  INSURANCE 
CHAMBERS  OF  THE  SURROGATE'S  COURT  —  COUNTY  or 


ESTATE  OF 

, ,  DECEASED, 

DATE  OF  DEATH,  


,  190.. 

DEAR  SIB. —  In  pursuance  of  chapter  908,  Laws  of  1896,  and  the  acts 
amendatory  thereof  and  supplemental  thereto,  you  are  hereby  requested  to 
determine  and  ascertain  the  value  of  the  following  estate,  annuities  and 
interests : 

Value  or 
•••  Age  Legacy  or  Estate  Amount 


To  Superintendent  of  the  Insurance  Department. 

Respectfully, 


Surrogate. 


ORDER  RETURNING  REPORT  TO  APPRAISER. 

At  a  Surrogate's  Court,  held  in  and  for  the  county  of   ,  at  the 

,  in  the  city   (or  village)   of   ,  on  the   day 

of ,  190.. 

Present  —  Hon ,  Surrogate. 

SURROGATE'S  COURT  —  COUNTY  OF  . 


IN  THE  MATTEE  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


Upon  reading  and  filing  the  consents  in  writing  of ,  Esq.,  attor- 
ney for  the  executors    (or  administrators),  and    ,  Esq.,  attorney 

for  the  State  Comptroller,  and  upon  the  affidavit  of   ,  dated  the 

day  of ,  190 . . ,  from  which  it  appears  

IT  is  ORDERED:  That  the  report  of  the  appraiser  duly  filed  herein  on  the 

day  of ,  190 . . ,  be  returned  to  him  for  further  consideration, 

and  report,  particularly  in  reference  to 


Surrogate. 


582  INHERITANCE  TAXATION 

ORDER  DETERMINING  THE  TAXABLE  TRANSFERS  AND  ASSESSING 

THE  TAX. 

At  a  Surrogate's  Court,  held  in  and  for  the  county  of   ,  at  the 

,  in  the  city  (or  village)   of  ,  on  the day 

of  ,  190.. 

SURROGATE'S  COURT  —  COUNTY  OF 


IN  THB  MATTEB  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 

Upon  reading  the  report  of ,  appraiser,  filed  herein  on  the 

day  of ,  190.  .,  wherein  it  appears  that  the  said  decedent  died  on 

the day  of ,  190. .,  a  resident  of ,  in  the  State 

of    ;    and    on    motion    of     ,    Esq.,    attorney    if  or    the 

herein ;    ,  Esq.,  appearing  for  the  State  Comptroller, 

and  (objecting  or  consenting  thereto),  it  is: 

ORDERED  AND  ADJUDGED:  That  the  cash  value  of  the  property  referred  to  in 
said  report,  the  transfer  of  which  is  subject  to  the  tax  imposed  by  the  acts 
in  relation  to  the  taxable  transfers  of  property  and  the  tax  to  which  said 
transfers  are  liable,  is  as  follows: 

Cash  Value  of  Tax  assessed 

Beneficiary  Relationship  Interest  Thereon 


Surrogate. 


NOTICE  OF  ASSESSMENT  OF  TAX. 
(§  231,  Tax  Law.) 

SURROGATE'S  COURT  —  COUNTY  OF 

IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 

To : 

You  are  hereby  notified  that, I  have,  by  order  made  and  entered  the 

day  of ,  190. .,  assessed  and  fixed  the  cash  value  of  such  interest, 

estate,  legacy,  or  property,  as  you  are  entitled  to  receive  from  the  estate  of 
the  above:named  decedent,  and  the  amount  of  tax  to  which  the  same  is  liable 
under  the  laws  in  reference  to  the  taxable  transfers  of  property,  as  follows: 

Estate,  Interest  or  Property  Transferred  Cash  Value  Tax  assessed  Thereon 


Surrogate. 


FORMS  583 


NOTICE  OF  APPEAL  TO  SURROGATE. 
(§  232,  Tax  Law.) 

SURROGATE'S  COURT  — COUNTY  OF  . 


IN  THE  MATTEB  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDEB  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


GENTLEMEN*. —  You  will  please  take  notice  that  is  dissatisfied 

with  the  appraisal  herein  of  the  property  of  the  above-named  decedent,  as 

made  and  set  forth  in  the  report  of  ,  the  appraiser  herein,  and 

with  the  order  fixing  and  assessing  the  transfer  tax  in  respect  to  the  transfers 
of  the  property  of  said  decedent,  made  and  entered  herein  on  the  ....  day 

of  190..,  and  hereby  appeals  to  the  surrogate  from  the  said 

appraisal  and  from  said  order  assessing  tax  as  aforesaid,  upon  the  following 
grounds : 

First :    

Second:  (if  there  (ire  several  grounds  of  appeals,  each  should 

be  stated)  

Dated,  Albany,  N.  Y., ,  190 .. 


Attorney  for   

To ,  Esq., 

Attorney  for 

To ,  Esq., 

Clerk  of  the  Surrogate's  Court,  County  of 

(Upon  filing  this  notice  in  the  surrogate's  office  the  appeal  to  the  surrogate 
ha*  been  duly  taken.) 


ORDER  OF  SURROGATE  ON  APPEAL. 

At  a  Surrogate's  Court,  held  in  and  for  the  county  of    ,  at  the 

surrogate's  office,  in  the   of   ,  on  the   day 

of ,  190.. 

Present  —  Hon ,  Surrogate. 

SURROGATE'S  COURT  —  COUNTY  OF  . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


An  appeal  having  been  taken  by  ,  the  (executor,  legatee,  or 

other  party  appellant)  from  the  order  fixing  and  assessing  the  transfer  tax 

herein  made  and  entered  on  the  day  of  ,  190. . ,  upon  the 

report  of the  appraiser  herein,  which  report  was  duly  filed  in  the 

office  of  the  surrogate  of  the  county  of on  the day  of , 

190.  .,  on  the  grounds  that ,  as  will  more  fully  appear  by  reference 

to  the  notice  of  appeal  filed  herein  on  the day  of ,  190. . 

And  said  appeal  coming  on  to  be  heard,  and  having  heard Esq., 


584  INHERITANCE  TAXATION 


for   the    ,  appellant,  and    ,  Esq.,   for  tie 

respondent : 

Xow  on  motion  of ,  attorney  for  the 

IT  is  ORDERED:     That  said  appeal  be,  and  the  same  hereby  is  . 

AND  IT  Is  FUBTHEB  OBDEBED  :   


NOTICE  OF  APPEAL  TO  THE  APPELLATE  DIVISION. 
SURROGATE'S  COURT  —  COUNTY  OF  

IN  THE  MATTEE  OF  THE  APPRAISAL  OF  THE  ESTATE 
OP 

,  DECEASED, 

UWDEB  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TBANSFEBS  OF  PROPERTY. 


GENTLEMEN. —  You  will  please  take  notice  that hereby  appeals 

to  the  Appellate  Division  of  the  Supreme  Court  of  the  State  of  New  York 

for  the Department,  from  the  order  of  the  surrogate  of  the  county 

of    heretofore  made  and   entered  herein   on  the    day  of 

,  190. .,  affirming  (or  reversing  or  modifying)  the  order  thereto- 
fore made  and  entered  on  the  day  of  ,  190 . . ,  fixing  and 

assessing  a  tax  upon  the  transfers  of  the  property  of  said  decedent  under  the 
law  relating  to  taxable  transfers  of  property,  and  from  each  and  every  part 
thereof  (or  from  so  much  thereof,  etc.,  stating  the  portion  of  the  order 
appealed  from ) . 

Dated  the day  of ,  190 .. 

Yours,  etc., 


Attorney  for 
To ,  Esq., 

Clerk  of  the  Surrogate's  Court  of  the  county  of 

To ,  Esq., 

Attorney  for  the  State  Comptroller. 


PETITION  TO  REMIT  INTEREST. 
SURROGATE'S  COURT  —  COUNTY  OF 

IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDEB  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


To  the  Surrogate's  Court  of  the  County  of : 

The  petition  of respectfully  shows: 

That  your  petitioner  is  the of  the  above-named  decedent,  who 

died  a  resident  of  the  county  of ,  State  of ,  on  the 

day  of ,  190.. 

That  proceedings  have  been  had  before appraiser  herein  for  the 

determination  of  the  tax  upon  the  transfer  of  the  property  of  said  decedent, 
which  tax  has  been  fixed  and  assessed,  by  order  entered  herein  on  the 


FORMS  585 

day  of ,  190. .,  at  the  sum  of  $ ,  as  by  reference  to  the 

report  of  the  appraiser  duly  filed  in  the  surrogate's  office  of  said  county,  and 
the  order  aforesaid,  will  more  fully  appear. 

That  the  transfer  tax  assessed  herein  has  not  been  paid,  although  more  than 
eighteen  months  have  elapsed  since  the  accrual  thereof,  and  by  reason  of  such 
nonpayment,  interest  thereon  at  the  rate  of  ten  per  centum  per  annum  has 
been  incurred  as  provided  by  statute. 

That  by  reason  of (here  state  the  facts,  showing  the  statutory 

reasons  entitling  the  persons  liable  to  pay  the  tax  to  have  the  interest  thereon 
remitted  to  six  per  cent.)  your  petitioner  believes  that  the  interest  upon  said 
tax  should  be  remitted  from  ten  per  cent,  to  six  per  cent,  as  provided  by 
statute. 

That  your  petitioner  is  desirous  of  paying  the  tax  as  fixed  by  said  order 
herein,  as  soon  as  his  claim  for  the  remission  of  interest,  based  upon  the 
foregoing  reasons,  can  be  passed  upon  by  the  court. 

Wherefore  your  petitioner  prays  that  an  order  be  made  and  entered  herein 
remitting  the  interest  upon  the  tax  assessed  to  six  per  cent.,  to  be  charged 
upon  said  tax  from  the  accrual  thereof  until  the  cause  of  such  delay  was 
removed,  after  which  ten  per  cent,  is  to  be  charged  as  provided  by  statute, 
provided  such  payment  be  made  within  ten  days  from  the  entry  of  *the  order 
remitting  such  interest  as  aforesaid,  and  that  your  petitioner  may  have  such 
other  and  further  relief  as  to  the  court  may  seem  just. 

Dated, ,  190.. 


Petitioner. 
(Add  verification.) 


NOTICE  OF  MOTION  ON  APPLICATION  TO  REMIT  INTEREST. 
SURROGATE'S  OOUET — COUNTY  OF 

IN  THE  MATTEB  OF  THE  APPBAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

U^DEB  THE  ACTS  IX  RELATION  TO  THE  TAXABLE 
TBANSFEBS  OF  PBOPEETY. 

Please  take  notice  that  on  all  the  papers  and  proceedings  herein,  and  the 

verified  petition  of ,  hereto  annexed  and  bearing  date  the 

day  of  ,  190. .,  application,  will  be  made  to  the  surrogate  of  the 

county  of at  a  Surrogate's  Court  to  be  held  at on  the 

day  of ,  190. .,  at o'clock  in  the noon  of  that 

day,  for  an  order  remitting  the  interest  upon  the  tax  heretofore  assessed  upon 
the  estate  of  the  above-named  decedent,  by  order  of  said  surrogate  made  and 

entered  the day  of ,  190 .  . ,  from  ten  per  cent,  to  six  per  cent 

per  annum,  to  be  computed  from  the  accrual  of  said  tax  until  the  circumstances 
preventing  the  earlier  payment  of  said  tax  were  removed,  and  for  such  other 
and  further  relief  as  to  the  court  may  seem  just. 

Dated  the day  of ,  190. . 


Attorney  for  Petitioner. 

To  Eon , 

State  Comptroller,  Albany,  N".  Y. 


586  INHERITANCE  TAXATION 


ORDER  REMITTING  INTEREST  FROM  TEN  TO  SIX  PER  CENT. 

At  a  Surrogate's  Court,  held  in  and  for  the  county  of ,  at  the  surro- 
gate's office,  in  the   of    ,  on  the day  of 

,  190.. 

Present  —  Hon ,  Surrogate. 

SURROGATE'S  COURT  —  COUNTY  OF  . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDEB  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 

On  reading  and  filing  the  verified  petition  of ,  wherein  it  appears 

that  payment  of  the  transfer  tax  upon  the  estate  of  the  above  named  decedent, 
as  determined,  has  been  unavoidably  delayed,  by  reason  of  

And  due  notice  of  this  application  and  motion  having  been  given  to 
Esq.,  attorney  for  the  State  Comptroller  (or  to  the  State  Comp- 
troller personally")  • 

Now,  on  motion  of  ,  Esq.,  attorney  for  the  petitioner  herein, 

appearing  (in  opposition  thereto  or  consenting  thereto) ,  it  is 

ORDERED:  That  interest  at  the  rate  of  ten  per  cent,  upon  the  tax  heretofore 
assessed  herein,  be  remitted  to  six  per  cent,  per  annum,  to  be  computed  from 

the  accrual  thereof  until  the   day  of   ,  190 . . ,  after  which 

date  interest  at  the  rate  of  ten  per  cent,  is  to  be  charged,  until  said  tax  ia 
paid,  as  provided  by  the  statute. 


Surrogate. 


PETITION  FOR  APPRAISAL  AND  DETERMINATION    BY    SURROGATE. 
SURROGATE'S  COURT — COUNTY  OF  . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 

OF 

,  DECEASED, 

UNDEB  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


To  the  Surrogate's  Court  of  the  County  of : 

The  petition  of respectfully  shows: 

( 1 )  That  your  petitioner  is  the   of,  etc.,  of  the  above-named 

decedent,  who  died  on  the day  of ,  190. . . ,  a  resident  of  the 

County  of and  State  of 

(2)  That  letters were  duly  issued  to  petitioner  on  the 

day  of   ,  190..,  and  that  your  petitioner  is  still  acting  as  such 


(3)  That  the  decedent's  estate  consists  of  cash  amounting  to  $ 

(or  articles  of  personal  property  which  have  been  converted  into  cash  by  the 
executor  or  administrator,  in  his  administration  upon  the  estate,  and  other 
items  of  personal  property,  the  clear  market  value  of  which  at  the  time  of 
decedent's  death  is  fully  stated  in  Schedule  A,  hereto  annexed.) 

(4)  That  Schedule  B,  hereto  annexed,  contains  an  itemized  list  of  the  debts 
of  decedent,  including  funeral  and  testamentary  expenses,  commissions,  etc. 

(5)  That  Schedule  C,  hereto  annexed,  contains  the  names  of  all  the  legatees 


FORMS  587 

or  other  beneficiaries  under  the  decedent's  will    (or  the  persons  entitled  as 
distributees  in  case  of  intestacy). 

(6)   That  all  the  persons  above  named  are  of  full  age  and  sound  mind  except 


Wherefore  your  petitioner  prays  that  said  surrogate  will  appraise  the  value 
of  the  decedent's  estate  forthwith,  and  fix  the  amount  of  the  transfer  tax 
assessable  thereon. 

Dated, ,  190. . 

Petitioner. 

Add  verification:  And  where  decedent  left  a  will  a  copy  should  be  attached 
referring  thereto  under  paragraph  (5) . 

(Notice  of  this  application  should  be  given  the  State  Comptroller.) 


ORDER  ASSESSING  TAX  WHERE  NO  APPRAISAL  HAS  BEEN  DIRECTED. 
(§  231,  Tax  Law.) 

At  a  Surrogate's  Court,  held  in  and  for  the  county  of   at  the 

of ,  on  the day  of ,  190. . 

Present  —  Hon ,  Surrogate. 

SURROGATE'S  COURT — COUNTY  OF  . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 

Upon  reading  and  filing  the  verified  petition  of  ,  wherein  it 

appears  that  the  decedent  above  named  died  on  the day  of , 

190. . ,  and  due  notice  of  motion  having  been  given  to  

Esq.,  attorney  for  the  State  Comptroller  (or  to  the  State  Comptroller 
personally)  : 

Upon  reading  and  filing  the  verified  petition  of  ,  wherein  it 

appears  that  the  decedent  above  named  died  on  the day  of , 

190..  and  due  notice  of  motion  having  been  given  to  ,  Esq., 

attorney  for  the  State  Comptroller  (or  to  the  State  Comptroller  personally)  : 

Now,  on  motion  of ,  Esq.,  attorney  for  the  petitioner  herein,  it  is 

ORDERED:  That  the  cash  value  of  the  property  referred  to  in  the  petition 
herein,  the  transfer  of  which  is  subject  to  the  tax  imposed  by  the  law  relating 
to  taxable  transfers  of  property  and  the  tax  to  which  each  of  said  transfers 
are  liable,  respectively,  is  as  follows: 

Cash  Value 
Legatee  or  Distributee         Relationship.  of  Interest.        Amount  of  Tax. 

$. $ 


Surrogf-te. 


588  INHERITANCE  TAXATION 


ORDER  EXEMPTING  ESTATE. 
(§  231,  Tax  Law.) 

At  a  Surrogate's  Court,  held  in  and  for  the  county  of at  the  surro- 
gate's office,  in  the  of   ,  on  the  day  of, 

190.. 
Present  —  Hon ,  Surrogate. 

SURROGATE'S  COURT — COUNTY  OF  . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 

Upon  reading  and  filing  the  verified  petition  of  ,  wherein  it 

appears  that  the  decedent  above  named  died  on  the day  of , 

190.  . ,  a  resident  of  the  county  of  and  State  of  ,  and 

that  the  transfer  of  the  property  of  said  decedent  is  not  subject  to  tax  under 
the  law  relating  to  taxable  transfers  of  property,  and  that  due  notice  of  this 

application  was  given  to ,  Esq.,  attorney  for  the  State  Comptroller 

{or  to  the  State  Comptroller  personally). 

Now,  on  motion  of  ,  Esq.,  attorney  for  the  petitioner  herein, 

it  is 

ORDERED:  That  the  transfer  of  property  of  which  said  decedent  died 
seized  and  possessed  and  mentioned  in  said  petition  is  exempt  from  tax  under 
th»  law  relating  to  taxable  transfers  of  property. 

».---'  >•'  *  » 

Surrogate. 


DISTRICT  ATTORNEY   PROCEEDINGS  —  PETITION. 

( §  235,  Tax  Law. ) 

SURROGATE'S  COURT  — COUNTY  OF  


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS. IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


To  the  Surrogate's  Court  of  the  County  of : 

The  petition  of respectfully  shows : 

First:  That  your  petitioner  is  the  district  attorney  of  the  county  of 

,  in  the  State  of  New  York,  and  your  petitioner  further  alleges 

upon  informationtand  belief: 

Second :  That  on  or  about  the day  of ,  190.  . ,  the  above- 
named  decedent  died  a  resident  of  the  county  of ,  State  of 

Third:  That  thereafter  proceedings  were  duly  instituted  in  the  Surrogate's 
Court  of  the  county  of to  have  the  amount  of  tax  upon  the  trans- 
fers of  the  property  of  said  decedent  fixed  and  determined,  as  provided  by  the 
law  relating  to  the  taxable  transfers  of  the  property  of  decedents,  and  that 

an  order  was  entered  by  the  surrogate  of  the  county  of  in  such 

proceedings  on  the day  of ,  190. .,  fixing  and  assessing  the 

transfer  tax  therein  at  the  sum  of dollars. 

Fourth:  Your  petitioner  further  shows  that  eighteen  months  have  elapsed 


FORMS  589 

since  the  accrual  of  said  tax,  and  that  the  State  Comptroller  has  notified  your 
petitioner  in  writing  if  the  refusal  or  neglect  of  the  persona  liable  therefor 
to  pay  the  said  tax  and  the  interest  due  thereon,  and  that  no  part  thereof  has 
been  paid  (except,  etc.,  where  some  legatee  has  paid  the  ta&  on  his  individual 
transfer)  and  your  petitioner  believes  that  the  same  still  remains  due  and 
unpaid. 

Wherefore  your  petitioner  prays  that  a  citation  issue  under  the  seal  of 

this  court  directed  to  ,  the  executor  (or  administrator)  of  said 

estate,  and  to ,  the  persons  or  corporations  liable  to  taxation  upon 

the  transfers  of  the  property  of  said  decedent  to  them  respectively,  as  appears 
by  the  taxing  order,  entered  herein,  as  aforesaid,  citing  them,  and  each  of 
them,  to  appear  before  this  court  on  a  certain  day  to  be  designated  therein 
and  show  cause,  if  any  they  have,  why  the  tax  and  interest  under  the  law 
relating  to  the  taxable  transfers  of  property  should  not  be  paid. 

Dated  the day  of ,  190. . 


District  Attorney  of  the  County  of 
(Add  verification.) 


ORDER  GRANTING  CITATION. 
(§  235,  Tax  Law.) 

At  a  Surrogate's  Court,  held  in  and  for  the  county  of   ,  at  the 

surrogate's  office,  in  the of on  the day  of 

,  190.. 

Present  —  Hon ,  Surrogate. 

SURROGATE'S  COURT  — COUNTY  OF  . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UHDEB  THE  ACTS  ix  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


On  reading  and  filing  the  verified  petition  of ,  district  attorney 

in  and  for  the  county  of  ,  bearing  date  the  day  of 

,  190 .  . ,  it  is 

ORDERED:  That  a  citation  issue  herein  in  accordance  with  the  prayer  of  said 
petitioner. 


Surrogate. 


CITATION  TO  SHOW  CAUSE. 
(§  2355,  Tax  Law.) 

THE  PEOPLE  OF  THE  STATE  OF  NEW  YORK: 

By  the  grace  of  God,  free  and  independent,  to  . . . 
(executors  or  administrators  of,  etc.) ,  and  to. 


,  greeting: 

You,  and  each  of  you  are  hereby  cited  and  required  personally  to  be  and 

appear  before  the  surrogate  of  the  county  of ,  at  the  Surrogate's 

Court  in  and   for  said  county,  held   at    on  the    day  of 

,  190 . . ,  at o'clock  in  the noon  of  that  day,  then  and 

there  to  show  cause  why  the  transfer  tax  upon  the  transfer  of  the  property 
of  the  above-named  decedent,  and  upon  your,  and  each  of  your,  shares  or 


590  INHERITANCE  TAXATION 

interests  respectively,  pursuant  to  chapter  908  of  the  Laws  of  1896  and  the 
acts  amendatory  thereof  and  supplementary  thereto,  should  not  be  paid,  which 
tax  has  been  duly  fixed  and  assessed  by  order  of  the  surrogate  of  the  county 

of made  and  entered  the day  of ,  190 ..,  together 

•with  the  interest  thereon,  which  is  now  due  and  unpaid. 

And  such  of  you  hereby  cited  as  are  under  the  age  of  twenty-one  years  are 
required  to  appear  by  your  guardian,  if  you  have  one,  or,  if  you  have  none, 
to  appear  and  apply  for  one  to  be  appointed;  or  in  the  event  of  your  neglect 
or  failure  to  do  so,  a  guardian  will  be  appointed  by  the  surrogate  to  represent 
and  act  for  you  in  this  proceeding. 

IN  TESTIMONY  WHEREOF  we  have  caused  the  seal  of  the  Surrogate's  Court 
of  the  county  of to  be  hereunto  affixed. 

Witness,  Hon ,   surrogate  of   the   county   of at 

(L.  S.)      the     day  of 190. . 


Clerk  of  the  Surrogate's  Court. 


DECREE  DIRECTING  PAYMENT. 

At  a  Surrogate's  Court,  held  in  and  for  the  county  of ,  at  the  sur- 
rogate's office  in  the of on  the   day  of 

,  190.. 

Present  —  Hon ,  Surrogate. 

SURROGATE'S  COURT—  COUNTY  OF  . 


IN  THE  MATTEB  OF  THE  APPRAISAL  OF  THE  ESTATE 

OF 

-....,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


Upon  the  petition  of  the  district  attorney,  heretofore  filed  herein  on  the 

day  of ,  190..,  and  the  report  of  the  appraiser,  and  the 

order  entered  thereon  on  the day  of ,  1905,  fixing  and  assess- 
ing the  tax  upon  the  transfers  of  the  property  of  the  above-named  decedent, 

and  after  hearing  ,  Esq.,  on  behalf  of  Hon ,  district 

attorney,  in  support  of  said  petition  and  upon  all  the  papers  and  proceedings 

herein,  and  (no  one  appearing  in  opposition  thereto  or)  attorney 

for herein,  having  appeared  in  opposition  thereto,  it  is 

ORDERED:  That  the  (executor  or  administrator)  herein  make 

payment  forthwith  to  the  State  'Comptroller  of  the  sum  of dollars, 

being  the  amount  of  tax  upon  the  interests  of 

together  with  interest  upon  each  of  said  sums  respectively,  at  the  rate  of  ten 

per  cent,  per  annum,  from  the day  of ,  190. .,  to  the  date 

of  payment  (or) 

ORDERED:  That  (reciting  a  direction  similar  to  the  foregoing  that  each 
legatee  or  distributee  shall  pay  forthwith  the  tax  and  interest  assessed  upon 
the  transfer  to  him  individually). 

AND  IT  Is  FURTHER  ORDERED:  That  said  (executor  or  administrator)  pay  to 

Hon ,  district  attorney,  the  sum  of dollars,  as  and  for 

his  costs  and  disbursements  herein:  (or) 

AND  IT  Is  FURTHER  ORDERED:  That  Hon ,  district  attorney,  ia 

allowed  the  sum  of  dollars,  as  and  for  his  costs  and  disburse 

ments  herein,  to  be  paid  forthwith  by  the  above  legatees  or  distributees  in 
proportion  to  the  amount  of  tax  due  and  owing  by  each  respectively,  and  in 
addition  to  said  tax  and  interest. 


Surrogate. 


FORMS  591 


AFFIDAVIT  FOR  APPRAISAL  OF  THE  PROPERTY  OF  NON-RESIDENT 

DECEDENTS. 


SURROGATE'S  COURT— COUNTY  OF 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THB  ESTATE 

OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


STATE  OF  NEW  YORK,  )        . 

County  of  ,     \ 

,  being  duly  sworn  says: 

First :  That  he  resides  at  ,  and  that  the  above-named  decedent 

died  on  the day  of ,  190 . . ,  a  resident  of in  the 

State  of ,  and  that  thereafter  letters  testamentary  (or  letters  of 

administration)  were  issued  to  deponent  by  the  Court  of  the 

county  of ,  State  of ,  on  the day  of , 

1905,  and  deponent  thereupon  entered  upon  the  discharge  of  his  duties  as  such 
(executor  or  administrator),  and  that  he  is  still  acting  as  such  (executor  or 
administrator). 

Second :  That  Schedule  A,  hereto  annexed,  and  made  a  part  hereof,  contains 
an  itemized  statement  of  all  the  property,  real  and  personal,  of  which  the  said 
decedent  died  seized  or  possessed,  situated  within  the  State  of  New  York, 
including  the  shares  of  stock  of  all  New  York  corporations,  debts  owing  to 
decedent  by  debtors  residing  in  the  State  of  New  York,  certificates  of  deposit, 
choses  in  action,  or  other  property 

Third:  That  Schedule  B,  hereto  annexed  and  made  a  part  hereof,  contains 
an  itemized  statement  of  all  the  personal  property  owned  by  said  decedent, 
situated  without  the  State  of  New  York. 

Fourth:  Said  decedent,  at  the  time  of  his  death,  had  no  safe-deposit  box, 
individually  or  held  jointly  in  the  name  of  the  decedent  and  one  or  more  per- 
sons within  the  State  of  New  York,  in  which  was  deposited  bonds,  public  or 
private,  mortgages,  money,  or  any  evidences  of  debt  whatsoever;  that  he  was 
not  carrying  on  any  business  or  interested  in  any  copartnership  within  the 
State  of  New  York ;  that  he  owned  no  shares  of  stock  of  national  banks 
situated  therein,  and  did  not  own  any  jewelry,  horses,  carriages,  furniture,  or 
other  items  of  personal  property  of  any  nature  or  kind  whatsoever  in  said 
State,  except  as  fully  set  forth  in  said  Schedule  A,  hereto  annexed.  (//  the 
decedent  exercised  a  power  of  appointment  over  any  property  within  this  State, 
the  facts  should  be  fully  stated  here.) 

Fifth:  That  prior  to  his  death  the  said  decedent  made  no  transfer  of  prop- 
erty within  the  State  of  New  York  by  deed,  grant,  bargain,  sale,  or  gift  made 
in  contemplation  of  death  or  intended  to  take  effect  in  possession  or  enjoy- 
ment at  or  after  death.  (State  whether  any  person  or  persons  became 
entitled  to  any  remainder  or  reversion  in  property  within  this  State  by  reason 
of  the  decedent's  death.) 

Sixth:  That  the  fair  market  value  of  the  decedent's  entire  personal  estate, 
wheresoever  situated,  at  the  time  of  his  death,  was dollars. 

Seventh:  That  Schedule  C,  hereto  annexed,  and  made  a  part  hereof,  con- 
tains an  itemized  statement  of  the  funeral  expenses  and  expenses  of  adminis- 
tration incurred  and  to  be  incurred  by  the  representatives  of  said  estate. 
Also  an  itemized  statement  showing  the  valid  debts  due  and  owing  by  decedent 
at  the  time  of  his  death,  and  the  commissions  to  which  I  am  entitled  as 
( executor  or  administra  tor )  by  the  laws  of  the  state  of 

Eighth:  That  all  the  persons  interested  in  said  estate  are  of  full  age  and 


592  INHERITANCE  TAXATION 


sound  mind,  except 


Ninth:  (When  decedent  left  a  icilL)  That  Schedule  D,  annexed  hereto,  and 
made  a  part  hereof,  contains  a  full  and  true  copy  of  the  decedent's  last  will 
and  testament. 

(When  decedent  died  intestate.)  That  all  the  persons  who  are  entitled  to 
share  in  the  estate  of  said  decedent,  together  with  their  relationship,  places 
of  residence,  and  the  share  or  interest  of  each  are  as  follows: 

Place  of 
Name  of  Distributee  Relationship  Residence  Share  or  Interest 


Executor  or  Administrator. 
Sworn  to  before  me,  this   ....   day 
of ,  190.. 


Notary  Public. 
(County  clerk's  certificate  should  be  attached.) 


PETITION   FOR   APPRAISAL  —  NON-RESIDENT   DECEDENT. 
SURROGATE'S  COURT—  COUNTY  OF 

IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UHT>EB  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


To  the  Surrogate's  Court  of  the  County  of  : 

The  petition  of respectfully  shows : 

First:  That  he  is  (the  executor,  administrator,  or  other  interested  person, 
including  the  State  Comptroller),  and  as  such  is  interested  in  the  estate  of 
the  above-named  decedent. 

Second:  That,  as  petitioner  is  informed  and  believes,  the  above-named 

decedent  died  on  or  about  the day  of 190. .,  a  resident  of 

,  in  the  county  of ,  and  State  of ,  and  at  the 

time  of  his  death  he  was  seized  and  possessed  of  property  in  the  county  of 

,  in  the  State  of  New  York,  all  or  some  part  of  which  is  subject  to 

taxation  under  the  laws  relating  to  the  taxable  transfers  of  property,  to  the 
value  of  and  upwards  of  ( ten  thousand  dollars,  or  where  it  passes  to  collater- 
als, in  whole  or  in  part,  five  hundred  dollars ) . 

Third:  That  your  petitioner  is  informed  and  believes  that  said  decedent 
(died  intestate,  or)  left  a  last  will  and  testament  which  was  thereafter  and 

on  or  about  the day  of ,  190. .,  duly  admitted  to  probate  by 

the Court  of  the  county  of ,  State  of ,  by  the 

terms  of  which  said  decedent  appointed of the  executor 

of  his  said  will  and  the  said is  still  acting  as  such  executor. 

Fourth :  That,  as  deponent  is  informed  and  believes,  no  application  has  been 
made  for  ancillary  letters  upon  the  estate  of  said  decedent  in  the  county  of 

or  any  other  county  in  this  State,  and  that  no  proceeding  has  been 

brought  by  the  representatives  of  said  decedent  to  fix  and  determine  the  tax 
upon  the  transfers  of  the  property  of  said  decedent  within  this  State  at  the 
time  of  his  death,  although  application  has  been,  or  is  about  to  be,  made  by 


FORMS  593 

such  representatives  to  remove  such  property  from  the  State  of  New  York 
without  first  having  the  transfer  tax  thereon  determined  and  paid. 

Fifth:  That  (where  decedent  left  a  will)  attached  hereto  is  a  copy  of  the 
decedent's  will:  (where  the  decedent  died  intestate)  attached  hereto  is  an 
affidavit  of  the  foregoing  administrator  of  said  decedent  showing 

Sixth:  That  all  the  persons  who  are  interested  in  said  estate,  and  who  are 
entitled  to  notice  of  all  proceedings  herein  and  their  addresses,  are  as  follows : 

Comptroller  Albany,  N.  Y. 


Seventh:  (Where  application  is  made  on  behalf  of  the  State  Comptroller.) 
That  attached  hereto,  and  made  a  part  hereof,  is  the  affidavit  of  the  executor 
(or  administrator),  showing  in  detail  the  facts  hereinbefore  stated. 

Wherefore  your  petitioner  prays  for  the  entry  of  an  order  herein  directing 
the  appraisal  of  the  property  of  the  above-named  decedent,  as  provided  by 
law. 

Dated  (Albany,  N.  Y.), 190. . 


Petitioner. 
(Add  verification.) 


ORDER  DESIGNATING  APPRAISER  —  NONRESIDENT  DECEDENT. 
(§  230,  Tax  Law.) 

(The  order  designating  appraiser  in  case  of  resident  decedents  can  be  used 
in  designating  an  appraiser  of  the  property  of  non-resident  decedents,  with 
slight  change  where  reference  is  made  to  the  petition  upon  which  the  order  is 
granted.  See  form  on  page  411.) 


AFFIDAVIT. 

Required  by  the  State  Comptroller  upon  Application  for  the  Removal  or 
Transfer  of  the  Property  of  a  Nonresident  Decedent,  where  Transfer  Tax 
Proceedings  have  not  been  Instituted. 


APPLICATION  TO  THE  COMPTROLLER  OF  THE 
STATE  OF  NEW  YORK 

FOR  CONSENT  TO  TRANSFER  CERTAIN  PROP- 
ERTY BELONGING  TO 


LATE  A  RESIDENT  OF. 


Application  is  made  to  the  Comptroller  of  the  State  of  New  York  for  con- 
sent to  transfer  the  following  property  belonging  to  the  above-named  non- 
resident decedent,  pursuant  to  section  227  of  the  Transfer  Tax  Law  of  the 
State  of  New  York,  namely: 

Present  value. 

100  shares  Erie  common  stock,  par  value,  $100,  at $ 

Deposit  in  the  Albany  Savings  Bank 

Total  .  $ 


(All  the  property  within  this  State  should  be  set  forth,  including  stocks  of 
~New  York  corporations,  etc.,  as  required  by  the  foUoimng  affidavit,  to  be 
attached  to  such  application: ) 


094  INHERITANCE  TAXATION 


STATE  OF  NEW  YORK, 
County  of   , 

,  being  duly  sworn,  says:  (the  affidavit  should  show  the  fottow- 

ing  facts) : 

Name  of  decedent  —  date  of  death,  and  decedent's  late  residence. 

Name  and  address  of  the  executor  or  administrator,  and  whether  ancillary 
letters  have  been  applied  for  in  this  State  or  not. 

Shares  of  stock  of  various  New  York  corporations  owned  by  the  decedent. 

Bonds,  foreign  and  domestic,  physically  present  within  this  State  at  the 
time  of  decedent's  death. 

Bank  stock,  and  cash  on  deposit  in  any  savings  bank  or  other  institution 
in  this  State.  Also,  certificates  of  deposit  issued  by  any  bank,  trust  company, 
or  other  institution  in  this  State. 

Policies  of  insurance  upon  the  life  of  such  non-resident  issued  by  corpora- 
tions of  this  State  and  payable  to  the  decedent  or  his  legal  representatives. 

Notes  or  other  evidences  of  indebtedness  owing  such  non-resident  by  residents 
of  this  State. 

Whether  the  decedent  was  interested  in  any  partnership,  or  carried  on  any 
business  within  this  State,  and  if  so,  the  nature  and  location  thereof.  Also 
whether  the  decedent  was  entitled  to  any  legacy  or  share  of  an  estate,  the 
nature,  amount,  and  particulars  in  reference  thereto. 

If  the  non-resident  decedent  exercised  a  power  of  appointment  over  any 
property  within  this  State,  that  fact  shall  be  fully  set  forth,  also  whether  any 
remainder  or  reversionary  interest  passed  under  any  prior  will,  or  any  trans- 
fer to  any  one  in  possession  or  enjoyment,  as  the  result  of  the  decedent's 
death. 

Real  property  in  this  State  owned  by  decedent,  giving  a  brief  description  of 
each  parcel,  and  the  estimated  value  thereof,  after  deducting  any  incumbrances 
thereon. 

Any  property,  real  or  personal,  or  any  interest  therein,  other  than  the 
above  within  the  State  of  New  York,  and  the  values  thereof. 

Whether  the  decedent  made  any  transfer  of  property  within  this  State  in 
contemplation  of  death  or  intended  to  take  effect  in  possession  or  enjoyment 
at  or  after  his  death. 

The  names,  residence,  and  relationship  of  all  persons  receiving  any  portion 
of  the  decedent's  property  and  the  amount,  or  other  interest  therein,  whether 
such  persons  are  residents  of  this  State  or  not;  also  the  character  of  any 
corporation  of  the  State  of  New  York,  or  any  other  State,  to  and  for  the  use 
of  which  any  part  of  the  stock  of  New  York  corporations  —  the  proceeds  from 
the  sale  thereof  or  any  other  property  within  this  State,  will  be  transferred 
by  reason  of  the  will  of  said  decedent. 


Sworn  to  before  me,  this  .  . . 
day  of ,  190. 


Notary  Public    (or  other  officer  before  whom 
affidavit  is  made). 


AGREEMENT  —  UPON  COMPOSITION  OF  TRANSFER  TAX. 
SURROGATE'S  COURT—  COUNTY  OF  . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


WHEREAS,   The   above-named    died   on   the    day 

of ,  190. . ,  a  resident  of  the  county  of and  State 


FORMS  595 

of    ,    leaving    a   last    will    and    testament    which    was    duly 

admitted  to  probate  in  the  Surrogate's  Court  of  the  county  of , 

and  letters  testamentary  were  thereupon  issued'  to ,  of , 

New  York. 

AND  WHEREAS,  Transfer  tax  proceedings  were  thereafter  regularly  insti- 
tuted in  the  Surrogate's  Court  of  the  county  of ,  and  by  order  of 

lion ,  surrogate  of   said   county   of ,  made  and 

entered   the    day  of    ,    190..,    ,    Esq.,   was 

directed  to  appraise  the  property  of  said  decedent  pursuant  to  the  provision 
of  the  law  relating  to  the  taxable  transfers  of  property,  and  the  report  of 
such  appraiser  was  filed  in  the  office  of  the  surrogate  aforesaid,  and  an  order 
entered  thereupon  on  the day  of ,  190 .  . ,  fixing  and  assess- 
ing a  transfer  tax  upon  certain  transfers  of  said  decedent's  property  at  the 
sum  of  $ 

AND  WHEREAS,  Decedent  by  the clause  of  his  will  provided  as 

follows :    

AND  WHEREAS,  It  appears  from  the  report  of  said  appraiser  that  in  view 
of  the  foregoing  provision  (or  provisions)  of  said  decedent's  will  it  was 
impossible  to  presently  determine  the  value  of  the  estate  or  property  trans- 
ferred to  at  the  time  of  the  decedent's  death,  and  that  the 

appraisal  thereof  was  therefore  postponed  until  the  value  of  said  transfers 
could  be  definitely  determined  (or  such  other  facts  by  reason  of  which  the 
present  taxability  of  the  transfer  has  been  heretofore  held  for  future 
appraisal,  it  appearing  that  the  remainders  or  expectant  estates  were  of  such 
a  nature,  or  so  disposed  and  circumstanced,  that  the  taxes  thereon  were  held 
not  present  payable,  or  where  the  interests  of  the  legatees  or  devisees  were 
not  ascertawable  as  provided  in  section  233  of  the  Tax  Law.) 

AND  WHEREAS,  The  said  (executor  or  trustees)  above  named  are  now 
desirous  of  personally  settling  the  remaining  claims  of  the  people  of  the  State 
of  New  York  upon  or  in  respect  to  the  transfers  of  the  property  or  estates,  and 
the  tax  thereon  which  may  now  be  due  and  payable,  or  which  may  hereafter 
become  payable,  under  the  laws  of  the  State  of  New  York,  and  by  compounding 
all  such  taxes  upon  terms  which  are  equitable  and  expedient,  and  that  said 
executor  or  trustees  be  granted  a  discharge  upon  the  payment  of  the  taxes 
provided  for  in  this  composition  agreement  in  pursuance  of  the  law  in  such 
case  made  and  provided. 

'Now,  THEREFORE,  In  consideration  of  the  following: 

IT  is  HEREBY  STIPULATED  AND  AGREED:  That  the  transfer  tax  in  respect 
to  be,  and  the  same  hereby  is  ascertained,  fixed,  com- 
pounded, and  adjusted  at  the  sum  of dollars  ($ ) ,  which 

sum  it  is  agreed  shall  be  accepted  by  the  Hon ,  as  Comptroller 

of  the  State  of  New  York,  by  and  with  the  approval  of  the  Hon , 

Attorney-General  of  the  State  of  New  York,  in  full  payment,  satisfaction,  and 
discharge  of  all  transfer  taxes  which  are  payable,  or  which,  but  for  this  agree- 
ment, might  at  any  time  hereafter  become  due  and  payable  to  the  State  of 
New  York,  under  o"r  by  virtue  of  the  laws  thereof,  upon  or  in  respect  to  the 
transfers  of  the  property  or  estate  of  the  above-named  decedent  which  are 
mentioned  and  referred  to  as  compromised,  and  which  have  become  fully 
settled  and  adjusted  by  the  execution  of  this  composition  agreement,  as  pro- 
vided by  section  233  of *the  Transfer  Tax  Law. 

IN  WITNESS  WHEREOF,  the  said (executor  or  trustees) ,  under 

the  will  of  the  said   deceased,  and  Hon Comptroller 

of  the  State  of  New  York,  have  signed  and  acknowledged  the  execution  of 

these  presents  in  triplicate,  this day  of 190. . 

[L.  s.] 

[L.   S.] 

[L.   S.1 

Approved,  this day  of ,  190. . 


Attorney-General . 

(Add   acknowledgments   by   the  representatives   of   the   estate,   and   State 
Comptroller. ) 


596  INHERITANCE  TAXATION 


CERTIFICATE. 

Of  Comptroller  Showing  Payment  of  Tax  upon  Real  Estate  Belonging  to 

Decedent. 

STATE  OF  NEW  YORK, 
COMPTROLLER'S  OFFICE. 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION   TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


ALBANY,  N.  Y., ,  190. . 

I, ,  Comptroller  of  the  State  of  New  York,  do  hereby  certify 

that   it   appears  from  the   records   of   this   office  that   upon  the   report  of 

,  appraiser  in  and  for  the  county  of   ,  in-  the 

State  of  New  York,  a  duplicate  copy  of  which  report  was  filed  in  this  office  on 

the    day  of    ,   190..,   an   order   was  made    by   Hon. 

,  surrogate  of    county,  on  the   day 

of    ,   190..,   assessing  a  transfer  tax  upon  the  transfers  of  the 

property  of  said ,  who  died  a  resident  of on 

the day  of ,   190. . ;  that  the  amount  of  said  tax 

assessed,  as  aforesaid,  was  the  sum  of  $ ,  a  part  of  which  sum 

is  the  tax  assessed  npon  the  transfer  of  certain  real  estate,  of  which  the 
above-named  decedent  died  seized  and  which  is  described  and  appraised  in  the 
report  of  said  appraiser  as  follows,  namely: 


And  I  further  certify  that  the  amount  of  said  tax  (less  the  discount  for 
payment  within  six  months  from  the  accrual  thereof;  or,  together  with  inter- 
est thereon  at  the  rate  of  per  cent,  per  annum  from  the  accrual 

thereof,  where  not  paid  within  eighteen   months)    has   been   fully  paid  by 

( the  executor  or  administrator)    of  said  estate,  and  that 

the  final  duplicate  receipts  showing  such  payments  were  issued  under  date  of 

,  190. .,  and  that  by  reason  thereof  the  lien  of  the  State  of 

New  York  upon  the  real  estate  hereinbefore  described,  for  tax  (and  interest) 
due  upon  the  transfer  thereof,  has  been  fully  satisfied  and  discharged. 

IN   WITNESS   WHEREOF,    I   have   hereunto    set   my   hand    and   affixed 
[L.  s]     my  official  seal,  this day  of ,  190. . 


Comptroller. 

(//  the  tax  upon  real  estate  was  paid  ~by  the  devisee  or  heir-at-laic  the 
foregoing  certificate  will  be  modified  accordingly.  It  icould  seem  that  the 
heir  or  devisee  is  not  entitled  to  this  certificate  until  the  tax  has  been 
assessed,  although  payment  on  account  thereof  may  have  been  made.) 


FORMS  597 

APPLICATION  TO  JUSTICE  OF  SUPREME  COURT  FOR  REAPPRAISAL. 

SUPREME  COURT  —  COUNTY  OF 

IN  THE  MATTEB  OF  THE  APPLICATION 

OF      - .       ...         .    — 

HON , 

STATE  COMPTROLLER,  FOB  A  REAPPRAISAL  OF 
THE  PROPERTY 

OF 

,  DECEASED, 

UNDEB  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


To  the  Hon ,  one  of  the  Justices  of  the  Supreme  Court  of  the 

Judicial  District : 

The  petition  of  Hon respectfully  shows : 

( 1 )  That  your  petitioner  is  the  Comptroller  of  the  State  of  New  York, 

and   that  the  above-named   decedent  was   a  resident   of    in  the 

county  of  ,  and  State  of  New  York  at  the  time  of  his  death, 

which  said  place  is  within  the judicial  district  of  the  Supreme 

Court  of  this  State. 

(2)  That  the  said  decedent  died  on  the    day  of    , 

100..,  and  letters   (testamentary  or  of  administration)   were  issued  by  the 

surrogate  of  the  county  of to  ,  who  were  and 

are   the   duly    qualified    and   acting  (executors   and   administrators)   of    the 
estate  of  said  decedent. 

( 3 )  That  proceedings  have  heretofore  been  instituted  to  determine  the  clear 
market  value  of  the  decedent's  estate  at  the  time  of  the  transfer  thereof  and 
the  liability  of  the  transfers  of  said  decedent's  property  to  taxation  under 
chapter  908  of  the  Laws  of  1896  and  the  acts  amendatory  thereof  and  supple- 
mental thereto,  and  upon  the  report  of   ,  Esq.,  the  appraiser 

in  such  proceedings,  an  order  was  entered  by  the  surrogate  of  the  county  of 

on  the day  of  ,  190 . .    ( determining 

the  value  of  decedent's  estate  to  be  the  sum  of  $ and  exempting 

said  estate  or  fixing  and  assessing  the  tax  upon  the  transfers  of  said  dece- 
dent's property,  as  follows)  : 

(4)  That  your   petitioner  is  informed   and  believes  that  such  appraisal 
(assessment  or  determination)   was   (fraudulently,  collusirely,  or  erroneously 
made)  owing  to  the  following  errors  of  fact,  namely, 

(5)  That  two  years  have  not  elapsed  since  the  entry  of  the  order  or  decree  of 
the  surrogate  determining  the  value  of  said  estate   and  assessing  the  tax 
thereon  (or  exempting  said  estate  from  taxation). 

(6)  That  all  the  persons    (or  corporations)    who  are  interested   in  said 
estate  and  who  are  entitled  to  notice  of  all  proceedings  herein,  together  with 
their  post-office  addresses  or  places  of  business,  are  as  follows: 

Name.  Interested  as.  P.  O.  Address. 


And  that  all  of   said   persons   are  of   full   age   and   sound   mind  except 

Wherefore  your  petitioner  prays  for  the  appointment  of  some  competent 
person  to  reappraise  the  estate  of  the  above-named  decedent,  in  accordance 
with  the  provisions  of  section  232  of  the  Tax  Law. 

Dated,  Albany,  N.  Y., ,  190.  . 

(Add  verification.)  Petitioner. 


598  INHERITANCE  TAXATION 

AFFIDAVIT    TO    BE    FILED    UPON    APPLICATION    FOR    LETTERS 
TESTAMENTARY  OR  LETTERS  OF  ADMINISTRATION. 

SURROGATE'S  COURT  — COUNTY  OF 


IN  THE  MATTER  OF  THE  APPLICATION  FOR  LETTERS 
(Testamentary  or  of  Administration)  UPON 
THE  ESTATE 

OF 

,  DECEASED, 


STATE  OF  NEW  YORK,  ) 
COUNTY  OF ,     }       • 

,   being    duly    sworn,    says:      That   he    is    the    petitioner 

herein ;  that  the  above-named  decedent  died  at  the of , 

in  the  county  of  ,  and  State  of  New  York,  on  the   day  of 

,  190... 

That  the  estimated  value  of  the  real  property  in  this  State  of  which  said 

decedent  died  seized  (less  any  mortgage  incumbrance  thereon)  is 

dollars  ($ ). 

That  the  estimated  value  of  the  personal  property  of  which  said  decedent 
died  is  possessed  is dollars  ( $ ) . 

That  the  following  is  a  complete  list  of  the  names,  residence,  and  relation- 
ship to  decedent  of  all  persons  entitled  to  any  legacy  or  share  of  the  dece- 
vdent's  estate  (and!  the  names  and  place  of  business  of  all  corporations 
who  are  entitled  to  any  legacy  or  devise  under  the  icill  of  said  decedent), 
together  with  the  character  and  value  of  such  legacy,  devise  (or  share)  as  far 
as  the  same  can  at  present  be  determined : 

Name.                                     P.  O.  Address.             Relationship.                 Value. 
' $ 


Petitioner,  an'd  executor  named  in  decedent's 
will  (or  petitioner,  and  person  entitled  to 
administer  upon  decedent's  estate.) 

Sworn  to  before  me,  this day 

of  .  ,,  190.. 


Notary  Public. 


NOTICE    BY    BANK    OR    TRUST    COMPANY    OF    THE    TRANSFER    OF 

DEPOSITS. 

,  190.. 

Hon ,  State  Comptroller,  Albany,  N.  Y. : 

DEAR  SIB. —  The  (bank  or  trust  company)  pursuant  to 

section  227  of  chapter  368  of  the  Laws  of  1905,  hereby  gives  notice  that  on 

the day  of  ,  190. .,  or  earlier,  upon  receipt  of  your 

written  consent,  it  will  deliver  or  transfer  the  funds  now  on  deposit  to  the 

credit  of ,  who  was  a  resident  of  the  county  of , 

State  of  ,  to  ,  who  is  the  duly  qualified  and 

acting  executor  (or  administrator)  of  the  estate  of  said  decedent. 

The    post-office    address    pf    the    said    executor     (or    administrator)     is 


Yours,  etc., 

Secretary  or  Treasurer,  Etc. 


FORMS  599 


,  190.. 

Hon ,  State  Comptroller,  Albany,  N.  Y. : 

DEAB  SIB. —  In  compliance  with  section  227  of  chapter  368  of  the  Laws  of 

1905,  you  are  hereby  notified  that  on  ,  190. .,  or  earlier,  upon 

receipt  of  your  written  consent,  I  will  transfer  shares  of  the 

capital  stock  of  ,  registered  in  the  name  of 

,  now  deceased,  and  whose  late  residence  was  at  , 

in  the  State  of  

The  executor  (or  administrator)  of  the  above-named  decedent  is 
,  whose  post-office  address  is  ,  State  of 


If  there  be  no  objection  to  the  proposed  transfer  Jundly  forward  the  usual 
consent. 

Yours,  etc., 


Secretary  or  other  officer. 


NOTICE  OF  INTENDED  DELIVERY  OF  CONTENTS  OF  SAFE-DEPOSIT 
BOX  TO  EXECUTORS,  ETC. 

,  190.. 

Hon ,  State  Comptroller,  Albany,  N.  Y.: 

DEAB  SIB. —  This  will  notify  you  that   late  a  resident  of  the 

county  of   ,  in  the  State  of   ,  was   ( the  individual  or 

joint)  lessee  of  a  safety-deposit  box  in  the  vaults  of  (bank  or  other  institit- 
tion) ,  and  that  application  has  been  made  by  the  (executors  or  adminis~ 
trators  or  the  surviving  lessee)  for  the  delivery  of  the  contents  of  said  box, 
belonging  to  the  above-named  decedent,  to  such  (executor,  administrator,  or 
other  person  aforesaid),  and  that  pursuant  to  section  227  of  chapter  368  of 
the  Laws  of  1905  the  (bank  or  other  institution)  aforesaid  hereby  notifies 

you  that  it  will  on  the  ......  day  of ,  190.  .,  at o'clock  in 

the noon  of  that  day  deliver  the  contents  of  said  safety-deposit  box 

to  the  said  (executor,  administrator,  etc.). 

(In  case  of  resident  decedents.)  Your  consent  for  such  delivery,  without 
retaining  a  sufficient  portion  or  amount  thereof  to  pay  any  tax  and  interest 
•which  may  be  thereafter  assessed  upon  the  transfer  of  such  property,  is 
requested. 

Yours,  etc., 


NOTICE  BY  BANK  OR  TRUST  COMPANY  OF  THE  TRANSFER  OF 
DEPOSITS  IN  THE  JOINT  NAMES  OF  A  DECEDENT  AND  ONE  OR 
MORE  PERSONS,  OR  IN  TRUST  FOR  ANOTHER. 

,  190.. 

Hon State  Comptroller,  Albany,  X.  Y. : 

DEAB   SIB. —  The    ( bank   or   trust   company ),   of    , 

hereby  gives  notice  that  there  is  standing  upon  the  books  of  this   (bank  or 
trust  company)    a  deposit  amount  to  $ in  the  name    (or  in  the 


600  INHERITANCE  TAXATION 

joint  names)  of  ("John  Doe  or  Richard  Roe" — "John  Doe  (and)  (or 
Richard  Roe,  either  or  the  survivor  can  draw " — "  John  Doe,  in  trust  for 
Richard  Roe" — or  otherwise)  and  the  officers  of  said  (bank  or  trust  com- 
pany )  are  informed  and  believe  that  one  of  the  persons  above 

named,  has  recently  died,  a  resident  of in  the  county  of 

and  State  of ,  and  that  on  the day  of  ,  190.  . , 

at o'clock,  A.  M.,  the  said  (bank  or  trust  company)  will,  at  the  request 

of  (the  executor,  administrator,  cestui  que  trust,  survivor,  or  other  inter- 
ested person)  transfer  or  deliver  the  funds  representing  said  deposit  to  the 
said  (name  the  person  making  application  therefor).  Your  consent  to  this 
transfer  ia  desired  pursuant  to  section  227  of  chapter  3&8  of  the  Laws  of 
1905. 

Yours,  etc., 


DECEDENT  ESTATE  LAW. 


OONSOLIDATOR'S  NOTES  TO  TEXT  OF 
DECEDENT  ESTATE  LAW. 


1. — Upon  examining  the  revised  statutes  it  was  found  that  there  were 
certain  provisions  relating  to  wills  that  had  never  been  consolidated  in 
any  "  General  Law.''  They  could  not  be  assigned  appropriately  to  any  of 
the  present  general  laws.  They  were  substantive  in  character  and  there 
'was  an  obvious  objection  to  inserting  them  in  the  code  which  was  already 
overburdened  with  provisions  of  a  substantive  nature.  Some  new  "  Con- 
solidated Law  "  was  therefore  necessary.  A  "  Wills  Law  "  had  been  sug- 
gested, but  this  term,  while  adequate  for  the  matter  coming  from  the 
revised  statutes  was  not  broad  enough  to  cover  substantive  provisions  of  a 
related  character  that  should  be  removed  from  the  code.  The  term  "  Dece- 
dent Estate  Law  "  was  selected  therefore  both  as  suggestive  of  the  con- 
tents of  the  new  law  and  general  enough  in  its  terms  to  include  matter 
relating  to  wills  as  well  as  executors  and  administrators  and  kindred 
topics  of  a  substantive  character  here  assembled. 

Throughout  this  chapter  references  in  sections  have  been  changed  where 
necessary  to  preserve  the  original  application  of  the  sections  as  they 
existed  in  the  Revised  Statutes,  the  Code  of  Civil  Procedure  or  in  other 
statutes.  The  reason  for  every  such  change  is  seen  at  a  glance  and  hence 
a  separate  note  is  not  made  in  each  instance. 

2.  Sec.  2. — Substantially   the  same   definition   of  the   word    "  will "   la 
given  in  the  Code  of  Civil  Procedure,  Sec.  2514,  subd.  4,  but,  that  is  only 
for  the  purpose  of  construing  the  provisions  of  the  code. 

3.  Art.  2. — Most  of  the  provisions  of  this  article  come  from  the  Re- 
vised Statutes  with  such  provisions  from  the  code  as  were  found  appli- 
cable.    So  far  as  possible  the  language  of  the  Revised  Statutes  has  been 
followed  in  incorporating  its  provisions  in  the  Decedent  Estate  Law,  so 
that  the  force  of  decisions  of  the  courts  upon  any  provision  abstracted 
from  the  Revised  Statutes  might  not  be  impaired.     In  some  cases  more 
apt  language  might  be  suggested,  but  for  the  reasons  stated,  no  improve- 
ment in  expression  has  been  attempted.    These  remarks  are  also  applicable 
to  sections  taken  from  the  Code  of  Civil  Procedure  and  inserted  in  this 
chapter. 

4.  Sees.  18-2O. — These  sections  relate  to  the  limitation  on  the  power 
of  persons  to  make  devises  or  bequests  to  corporations  created  under  cer- 
tain acts  heretofore  passed.    While  under  these  acts  no  new  corporations 
can  be  formed  in  the  future  the  limitations  should  be  noted  as  affecting 
gifts  to  corporations  already  existing.     So  far  as  these  acts  place  a  limi- 
tation upon  the  amount  of  property  which  can  be  taken  by  devise  or  be- 
quest, they  have  been  inserted  in  the  Membership  Corporations  Law,  as 
the  portions  so  assigned  relate  solely  to  the  powers  of  the  corporations  as 
distinguished  from  the  power  of  the  person  making  the  will. 

5.  Art.  3. — This  article   embraces   Art.   9   of  the   Real  Property  Law, 

[603] 


604  INHERITANCE  TAXATION 

known  as  the  "  Statute  of  Descents  "  and  sections  2732-2734  of  the  Code 
of  Civil  Procedure,  known  as  the  "  Statute  of  Distribution." 

6.  Sees.  96,  97  and  99. — These  sections  relating  to  advancements  of 
real  and  personal  estates  are  in  pari  materia  and  must  be  read  together. 
See  79  N.  Y.  246.    The  provisions  of  all  three  sections  were  taken  from  the 
Revised  Statutes  and  inserted  in  the  Real  Property  Law  and  the  Code  of 
Civil  Procedure  in  former  revisions  of  the  statutes.     Section  99  is  by  its 
terms  inapplicable  in  a  case  where  there  is  any  real  property  of  the  in- 
testate to  descend  to  his  heirs. 

7.  Art.  4. — There   are    many   matters   of   a   more   or   less   substantive 
character  relating  to  executors  and  administrators,  trustees  and  appraisers 
in  the  Code  of  Civil  Procedure  which  might  have  been  inserted  under  this 
article.     It  has  been  deemed  best,  however,  to  leave  these  matters  in  the 
Code  of  Civil  Procedure  until  such   time  as  the  Code  shall  be  revised. 
When  that  time  arrives  these  provisions  can  be  readily  assigned  to  this 
article. 

8.  Sec.  111. — This   provision    is   found    in   section   9    of   the   Personal 
Property  Law  and  for  greater  convenience  in  reference  has  been  transferred 
to  the  Decedent  Estate  Law.     The  reference  to  guardians  has  been  trans- 
ferred to  Domestic  Relations  Law.     The  portion  of  the  section  relating  to 
trustees  generally  has  been  allowed  to  remain  in  the  Personal  Property 
Law. 

TABLE. 

Showing  the   Provisions  of  the  Revised   Statutes,   Session   Laws,   Real 
Property  Law  and  Code  of  Civil  Procedure  which  are  Consolidated  in  the 
Decedent  Estate  Law. 
Sections,  etc.,  of  Revised  Sections  of  Consol. 

Statutes,  etc.  Law. 

R.  S.  pt.  2,  Ch.  6,  Tit.  1: 

Art    1,    Sec.     1 10 

2 11 

3 12 

"     4 ; 13 

-  2.  "  5 14 

"  21 15 

"  22 16 

"  3,  "  40 21 

"  41 22 

M  42 34 

"  43 35 

-  44 36 

"      45 37 

"      46 38 

"      47 39 

"      48 40 

"      49 26 

"      50-51 27 

"      52 23 

-  63 41 

"      71..                                2 


DECEDENT  ESTATE  LAW  605 

Sections,  etc.,  of  Revised  Sections  of 

Statutes,  etc.  Conaol.  Law. 

R.  S.  pt  2,  ch.  6,  Tit  5: 

Sec.  1 113 

"   2 116 

"   3 117 

"   4 118 

"   5 119 

"   6 114 

R.  S.  pt  3,  Ch.  7,  Tit.  3: 

Art  7,  Sec.  67 30 

"  68 31 

"  69 32 

"  70 33 

R.  S.  pt.  3,  Ch.  8,  Tit  3: 

Art.  1,  Sec.  17 112 

"  18 115 

L.  1848,  Ch.  319,  Sec.  6  pt 19 

L.  1860,  "  360,  "   1    17 

L.  1865,  "  368,  "   6  pt 18 

L.  1873.  "  397,  "   5  pt 20 

L.  1875,  "  267.  "   7  pt 18 

L-  1875,  "  343,  "   5  pt 18 

L.  1883,  "   65,  "   1    110 

L.  1886,  "  236,  "   7  pt 18 

L.  1887,  "  315,  "   5  pt 20 

L.  1887,  "  317,  "   7  pt 20 

L.  1890,  "  286,  "   6  pt  20 

L.  1891,  "   34,  "   1    122 

L.  1896,  "  547,     (Real  Property  Law) 

L.  1897,  "  417,  "   9  pt Ill 

L.  1905,  "  539,  "   2    98 

Real  Property  Law  Sec.  280  80 

"  281  81 

"  282 82 

"  283  83 

"  284 84 

•'  286  85 

*  286  86 

"  287  87 

44  288  88 

"  289 89 

w  290  90 

"  290a 91 

"  291  92 

44  292  93 

44  293 94 

44  294 95 

•*  895  96 

•  296  97 


606  INHERITANCE  TAXATION 

Sections,  etc.,  of  Revised  Sections  of 

Statutes,  etc.  Consol.  Lav/. 

Code  Civ.  Pro.  Sec.  1843  101 

"  1859   102 

"  1868 28 

"  2611  pt.    23 

"  2611  pt 24 

"  2611  pt 25 

44  2628   46 

"  2633 42  ) 

44  2634,  pt 43 

44  2660,  pt 103  " 

"  2694 47 

"  2703   44 

"  2704 45   ' 

"  2732   98 

44  2733,  pt , 99 

*  2734 .  100  : 


DECEDENT  ESTATE  LAW. 


(L.  1909,  CHAP.  18,  BEING  CHAP.  13  OF  THE  CONSOLIDATED  LAWS. 
IN  EFFECT  FEB.  17,  1909.) 

ARTICLE  1.  Short  title  and  definitions  (§§  1,  2). 

2.  Wills  (§§  10-47). 

3.  Descent  and  distribution  (§§   80-103). 

4.  Executors,      administrators      and      testamentary      trustees 

(§§  110-120). 

5.  Laws  repealed;  when  to  take  effect  (§§  130,  131). 

ARTICLE  1. 
SHORT  TITLE  AND  DEFINITIONS. 

SECTION  1.  Short  title. 
2.  Definitions. 

£     1.   Short  title. 

• 

This  chapter  shall  be  known  as  the  "  Decedent  Estate  Law." 

S     2.   Definitions. 

' 

The  term  "  will,"  as  used  in  this  chapter,  shall  include  all  codi- 
cils as  well  as  wills. 

Derlvatiomt     R.  S.,  Part  2,  ch.  6,  Tit.  1,  Art.  3,  §  71. 

AETICLE  2. 

WILLS. 

SECTION  10.  Who  may  devise. 

11.  What  real  property  may  be  devised. 

12.  Who  may  take  real  property  by  devise. 

13.  Devises  of  real  property  to   aliens. 

14.  Wills  of  real  estate,  how  construed. 

15.  Who  may  make  wills  of  personal  estate. 

16.  Unwritten  wills  of  personal  property,  when  allowed. 

17.  Devise    or   bequest   to   certain    societies,    associations    and 

corporations. 

18.  Devise  or  bequest  to  certain  corporations.     [Repealed.] 

19.  Devise    or    bequest    to    certain    benevolent,    charitable    and 

scientific  corporations.      [Repealed.] 

20.  Devise  or  bequest  to  certain  bar  associations  and  five  cor- 

porations.     [Repealed.]  f 

21.  Manner  of  execution  of  will. 
*  So  in  original. 

[607] 


608  INHERITANCE  TAXATION 

SECTION  22.  Witnesses  to  will  to  write  names  and  places  of  residence. 

23.  What  wills  may  be  proved. 

24.  Effect  of  change  of  residence  since  execution  of  will. 

25.  Application  of  certain  provisions  to  wills  previously  made. 

26.  Child  born  after  making  of  will. 

27.  Devise  or  bequest  to  subscribing  witness. 

28.  Action   by  child  born  after   making  of  will,  or  by   subscribing 

witness. 

29.  Devise  or  bequest  to  child  or  descendant  or  to  a  brother  or  sister 

of  the  testator  not  to  lapse. 

30.  Reception  of  wills  for  safe  keeping. 

31.  Sealing  and  indorsing  wills  received  for  safe  keeping. 

32.  Delivery  of  wills  received  for  safe  keeping. 

33.  Opening  wills  received  by  surrogate  for  safe  keeping. 

34.  Revocation  and  cancellation  of  written  wills. 

35.  Revocation  by  marriage  and  birth  of  issue. 

36.  Will  of  unmarried  woman. 

37.  Bond  or  agreement  to  convey  property  devised  or  bequeathed 

not  a  revocation. 

38.  Charge  or  incumbrance  not  a  revocation. 

39.  Conveyance,  when  not  to  be  deemed  a  revocation. 

40.  Conveyance,  when  to  be  deemed  a  revocation. 

41.  Canceling  or  revocation  of  second  will  not  to  revive  first. 

42.  Record  of  wills  in  county  clerk's  office. 

43.  County  Clerk's  index  of  recorded  wills. 

44.  Recording  will  proved  in  another  state  or  foreign  country. 

45.  Authentication   of   papers   from   another  state   or  foreign 

country  for  use  in  this  state. 

46.  Validity  of  purchase  notwithstanding  devise. 

47.  Validity  and  effect  of  testamentary  dispositions. 

48.  Application  of  certain  sections  in  this  article. 

§    1O.    Who  may  devise. 

All  persons,  except  idiots,  persons  of  unsound  mind  and  infants, 
may  devise  their  real  estate,  by  a  last  will  and  testament,  duly 
executed,  according  to  the  provisions  of  this  article. 

Derivation:  R.  S.,  Part  2,  eh.  6,  Tit.  1,  Art.  1,  §  1,  as  amended  by  L. 
1867,  cb.  782,  §  3. 

§    11.   What  real  property  may  be   devised. 

Every  estate  and  interest  in  real  property  descendible  to  heirs, 
may  be  so  devised. 

Derivation  i     R.  s.,  Part  2,  ch.  6,  Tit.  1,  Art.  1,  §  2. 

§12.   Who  may  take  real  property  by  devise. 
t 

Such  a  devise  of  real  property  may  be  made  to  every  person 
capable  by  law  of  holding  real  estate;  but  no  devise  to  a  corpora- 
tion shall  be  valid,  unless  such  corporation  be  expressly  authorized 
by  its  charter,  or  by  statute,  to  take  by  devise. 

Derivation:     R.  S.,  Part  2,  ch.  6,  Tit.  1,  Art.  1,  §  3. 


DECEDENT  ESTATE  LAW  609 

|  13.   Devises  of  real  property  to  aliens. 

[Repealed  by  L.  1913,  ch.  15-3,  in  effect  Apr.  1,  1913.] 

f    14.   Wills  of  real  estate,  how  construed. 

Every  will  that  shall  be  made  by  a  testator,  in  express  terms,  of 
all  his  real  estate,  or  in  any  other  terms  denoting  his  intent  to  de- 
vise all  his  real  property,  shall  be  construed  to  pass  all  the  real 
estate,  which  he  was  entitled  to  devise,  at  the  time  of  his  death. 

Derivation  i     R.   S.,   Part  2,   ch.   6,  Tit,  1,  Art.   2,    §    5. 
§    15.    Who   may   make   wills   of  personal  estate. 

Every  male  person  of  the  age  of  eighteen  years  or  upwards,  and 
every  female  of  the  age  of  sixteen  years  or  upwards,  of  sound  mind 
and  memory,  and  no  others,  may  give  and  bequeath  his  or  her 
personal  estate,  by  will  in  writing. 

Derivation  i  R.  S.,  Part  2,  ch.  6,  Tit.  1,  Art.  2,  §  21,  as  amended  by  L. 
1867,  ch.  782,  §  4. 

f    16.    Unwritten  trills  of  personal  property,  when   allowed. 

No  nuncupative  or  unwritten  will,  bequeathing  personal  estate, 
shall  be  valid,  unless  made  by  a  soldier  while  in  actual  military 
sfrvice,  or  by  a  mariner,  while  at  sea. 

Derivations     R.  S.,  Part  2,  ch.  6,  Tit.  1,  Art.  2,  §  22. 

£   17.  Devise  or  bequest  to   certain  societies,  associations  and  cor- 
porations. 

No  person  having  a  husband,  wife,  child  or  parent,  shall,  by  his 
or  her  last  will  and  testament,  devise  or  bequeath  to  any  benevolent, 
charitable,  literary,  scientific,  religious  or  missionary  society,  as- 
sociation or  corporation,  in  trust  or  otherwise,  more  than  one-half 
part  of  his  or  her  estate,  after  the  payment  of  his  or  her  debts,  and 
such  devise  or  bequest  shall  be  valid  to  the  extent  of  one-half,  and 
no  more. 

Derivation:      L.    1860,   ch.   360,    §    1. 

§    18.  Device   or  bequest    to    certain    corporations. 
[Repealed  by  L.  1911,  ch.  857,  in  effect  July  29,  1911.] 
20 


610  INHERITANCE  TAXATION 

I   10.  Device     or     bequest    to     certain    benevolemt,     charitable     and 

scientific    corporations. 

[Repealed  by  L.  1911,  ch.  857,  in  effect  July  29,  1911.] 


§  20.  Devise  or  bequest  to  certain  bar  associations,  veterinary  asso- 
ciations and  fire  corporations. 

[Repealed  by  L.  1911,  ch.  857,  in  effect  July  29,  1911.] 


§  21.  Manner  of  execution  of  will. 

Every  last  will  and  testament  of  real  or  personal  property,  or 
both,  shall  be  executed  and  attested  in  the  following  manner: 
1.  It  shall  be  subscribed  by  the  testator  at  the  end  of  the  will. 


DECEDENT  ESTATE  LAW  611 

2.  Such   subscription    shall   be   made   by    the   testator   in   the 
presence  of  each  of  the  attesting  witnesses,  or  shall  be  acknowl- 
edged by  him,  to  have  been  so  made,  to  each  of  the  attesting 
witnesses. 

3.  The  testator,  at  the  time  of  making  such  subscription,  or  at 
the  time  of  acknowledging  the  same,  shall  declare  the  instrument 
so  subscribed,  to  be  his  last  will  and  testament. 

4.  There  shall  be  at  least  two  attesting  witnesses,  each  of  whom 
shall  sign  his  name  as  a  witness,  at  the  end  of  the  will,  at  the 
request  of  the  testator. 

Derivations     R.  S.,  Part  2,  ch.  6,  Tit.  1,  Art.  3,  f  40. 

§   22.  "Witnesses   to   will   to   write   names   and   places    of   residence. 

The  witnesses  to  any  will,  shall  write  opposite  to  their  names 
their  respective  places  of  residence;  and  every  person  who  shall 
sign  the  testator's  name  to  any  will  by  his  direction,  shall  write 
his  own  name  as  a  witness  to  the  will.  Whoever  shall  neglect  to 
comply  with  either  of  these  provisions,  shall  forfeit  fifty  dollars, 
to  be  recovered  by  any  person  interested  in  the  property  devised 
or  bequeathed,  who  will  sue  for  the  same.  Such  omission  shall  not 
affect  the  validity  of  any  will;  nor  shall  any  person  liable  to  the 
penalty  aforesaid,  be  excused  or  incapacitated  on  that  account,  from 
testifying  respecting  the  execution  of  such  will. 

Derivation:     R.  S.,  Part  2,  ch.  6,  Tit.  1,  Art.  3,  §  41. 
§   23.  What    wills   may   be   proved. 

A  will  of  real  or  personal  property,  executed  as  prescribed  by 
the  laws  of  the  state,  or  a  will  of  personal  property  executed  without 
the  state,  and  within  the  United  States,  the  Dominion  of  Canada, 
or  the  Kingdom  of  Great  Britain  and  Ireland,  as  prescribed  by 
the  laws  of  the  state  or  country  where  it  is  or  was  executed,  or  a 
will  of  personal  property  executed  by  a  person  not  a  resident  of  the 
state,  according  to  the  laws  of  the  testator's  residence,  may  be 

admitted  to  probate  in  this  state. 

Derivation:     Code  Civil  Procedure,  §  2611.     For  remainder  of  section,  see 
this  chapter,  §§  24,  25. 

§   24.  Effect  of  change  of  residence  since  execution  of  will. 

The  right  to  have  a  will  admitted  to  probate,  the  validity  of  the 
execution  thereof,  or  the  validity  or  construction  of  any  provision 
contained  therein,  is  not  affected  by  a  change  of  the  testator's 
residence  made  since  the  execution  of  the  will. 

Derivation:  Code  Civil  Procedure,  §  2611.  For  remainder  of  section,  see 
this  chapter,  §§  23,  25. 


612  INHERITANCE  TAXATION 

§   25.  Application   of    certain   provisions   to   wills   previously    made. 

The  last  two  sections  apply  only  to  a  will  executed  by  a  person 
dying  after  April  eleventh,  eighteen  hundred  and  seventy-six,  and 
they  do  not  invalidate  a  will  executed  before  that  date,  which  would 
have  been  valid  but  for  the  enactment  of  sections  one  and  two  of 
chapter  one  hundred  and  eighteen  of  the  laws  of  eighteen  hundred 
and  seventy-six,  except  where  such  a  will  is  revoked  or  altered,  by  a 
will  which  those  sections  rendered  valid,  or  capable  of  being  proved 
as  prescribed  in  article  first  of  title  third  of  chapter  eighteen  of 
the  code  of  civil  procedure. 

Derivation:     Code  Civil  Procedure,  §  2611.     For  remainder  of  section,  see 
this  chapter,   §§   23,  24. 

{   26.  Child    bom    after    making    of    will. 

Whenever  a  testator  shall  have  a  child  born  after  the  making  of 
a  last  will,  either  in  the  lifetime  or  aftes:  ihe  death  of  such  testator, 
and  shall  die  leaving  such  child,  so  after-born,  unprovided  for  by 
any  settlement,  and  neither  provided  for,  nor  in  any  way  mentioned 
in  such  will,  every  such  child  shall  succeed  to  the  same  portion  of 
such  parent's  real  and  personal  estate,  as  would  have  descended  or 
been  distributed  to  such  child,  if  such  parent  had  died  intestate, 
and  shall  be  entitled  to  recover  the  same  portion  from  the  devisees 
and  legatees,  in  proportion  to  and  out  of  the  parts  devised  and 
bequeathed  to  them  by  such  will. 

Derivation:  R.  g.,  Part  2,  ch.  6,  Tit.  1,  Art.  3,  §  49,  as  amended  by 
L.  1869,  ch.  22,  §  1. 

§  27.  Devise    or   bequest    to    subscribing:   -witness. 

If  any  person  shall  be  a  subscribing  witness  to  the  execution  of 
any  will,  wherein  any  beneficial  devise,  legacy,  interest  or  appoint- 
ment of  any  real  or  personal  estate  shall  be  made  to  such  witness, 
and  such  will  cannot  be  proved  without  the  testimony  of  such  wit- 
ness, the  said  devise,  legacy,  interest  or  appointment  shall 
be  void,  so  far  only  as  concerns  such  witness,  or  any  claiming  under 
him ;  and  such  person  shall  be  a  competent  witness,  and  compellable 
to  testify  respecting  the  execution  of  the  said  will,  in  like  manner 
as  if  no  such  devise  or  bequest  had  been  made. 

But  if  such  witness  would  have  been  entitled  to  any  share  of  the 
testator's  estate,  in  case  the  will  was  not  established,  then  so  muclj 
of  the  share  that  would  have  descended,  or  have  been  distributed 
to  such  witness,  shall  be  saved  to  him,  as  will  not  exceed  the  value 
of  the  devise  or  bequest  made  to  him  in  the  will,  and  he  shall  re- 
cover the  same  of  the  devisees  or  legatees  named  in  the  will,  in 


DECEDENT  ESTATE  LAW  613 

proportion  to,  and  out  of.  the  parts  devised  and  bequeathed  to 
thiem. 

Derivation*     R.  S.,  Prt  2,  ch.  «,  Tit.  1,  Art.  3,  §|  60,  51. 

§   28.  Action  by  child  born  after  making  of  will,  or  by  subscribing 
witness. 

A  child,  born  after  the  making  of  a  will,  who  is  entitled  to  suc- 
ceed to  a  part  of  the  real  or  personal  property  of  the  testator,  or  a 
subscribing  witness  to  a  will,  who  is  entitled  to  succeed  to  a  share 
of  such  property,  may  maintain  an  action  against  the  legatees  or 
devisees,  as  the  case  requires,  to  recover  his  share  of  the  property ; 
and  he  is  subject  to  the  same  liabilities,  and  has  the  same  rights,  and 
is  entitled  to  the  same  remedies,  to  compel  a  distribution  or  parti- 
tion of  the  property,  or  a  contribution  from  other  persons  interested 
in  the  estate,  or  to  gain  possession  of  the  property,  as  any  other 
person  who  is  so  entitled  to  succeed. 

Derivation  t     Code  Ciril  Procedure,  §   1868. 

§  2U.   Devise  or  bequest  to  child  or  descendant,  or  to  a  brother  or 
sister  of  the  testator  not  to  lapse. 

Whenever  any  estate,  real  or  personal,  shall  be  devised  or  be- 
queathed to  a  child  or  other  descendant  of  the  testator,  or  to  a 
brother  or  sister  of  the  testator,  and  such  legatee  or  devisee  shall 
die  during  the  lifetime  of  the  testator,  leaving  a  child  or  other 
descendant  who  shall  survive  such  testator,  such  devise  or  legacy 
shall  not  lapse,  but  the  property  so  devised  or  bequeathed  shall 
vest  in  the  surviving  child  or  other  descendant  of  the  legatee  or 
devisee,  as  if  such  legatee  or  devisee  had  survived  the  testator  and 
had  died  intestate.  (Amended  by  L.  1912,  ch.  384,  in  effect  May 
5,  1912.) 

Derivation!     R.  S.,  Part  2,  ch.  6,  Tit.  1,  Art.  3,  5  52. 

§   3O.  Reception   of  wills    for   safe   keeping. 

The  clerk  of  every  county  in  this  state,  the  register  of  deeds  in  the 
city  and  county  of  New  York,  and  the  surrogate  of  every  county, 
upon  being  paid  the  fees  allowed  therefor  by  law,  shall  receive  and 
deposit  in  their  offices  respectively,  any  last  will  or  testament 
which  any  person  shall  deliver  to  them  for  that  purpose,  and  shall 
give  a  written  receipt  therefor  to  the  person  depositing  the  same. 

Derivation:     R,  S.,  Part  3,  ch.  7,  Tit.  3,  Art.  7,  §  67. 

§  31.  Sealing  and  indorsing  wills  received  for  safe  keeping* 

Such  will  shall  be  inclosed  in  a  sealed  wrapper,  so  that  the  con- 
tents thereof  cannot  be  read,  and  shall  have  indorsed  thereon  the 
name  of  the  testator,  his  place  of  residence,  and  the  day,  month 
and  year  when  delivered ;  and  shall  not,  on  any  pretext  whatever,  be 


614  INHERITANCE  TAXATION 

opened,  read  or  examined,  until  delivered  to  a  person  entitled  to  the 
same,  as  hereinafter  directed. 
Derivation:     R.  s.,  Part  3,  ch.  7,  Tit.  3,  Art.  7,  §  68. 

§  32.  Delivery  of  wills   received  for  safe  keeping. 

Such  will  shall  be  delivered  only, 

1.  To  the  testator  in  person;  or, 

2.  Upon  his  written  order,  duly  proved  by  the  oath  of  a  subscrib- 
ing witness ;  or, 

3.  After  his  death  to  the  persons  named  in  the  indorsement  on 
the  wrapper  of  such  will,  if  any  such  indorsement  be  made  thereon ; 
or, 

4.  If  there  be  no  such  indorsement,  and  if  the  same  shall  have 
been  deposited  with  any  other  officer  than  a  surrogate,  then  to  the 
surrogate  of  the  county. 

Derivation:     R.  S.,  Part  3,  ch.  7,  Tit.  3,  Art  7,  §  69. 

§   33.  Opening  wills  received  by  surrogate  for  safe  keeping. 

If  such  will  shall  have  been  deposited  with  a  surrogate,  or  shall 
have  been  delivered  to  him  as  above  prescribed,  such  surrogate, 
after  the  death  of  the  testator,  shall  publicly  open  and  examine  the 
same,  and  make  known  the  contents  thereof,  and  shall  file  the  same 
in  his  office,  there  to  remain  until  it  shall  have  been  duly  proved, 
if  capable  of  proof,  and  then  to  be  delivered  to  the  person  entitled 
to  the  custody  thereof;  or  until  required  by  the  authority  of  some 
competent  court  to  produce  the  same  in  such  court. 

Derivation:     R.  S.,  Part  3,  ch.  7,  Tit.  3,  Art.  7,  §  70. 

§  34.  Revocation  and  cancellation  of  written  wills. 

No  will  in  writing,  except  in  the  cases  hereinafter  mentioned, 
nor  any  part  thereof,  shall  be  revoked,  or  altered,  otherwise  than  by 
some  other  will  in  writing,  or  some  other  writing  of  the  testator, 
declaring  such  revocation  or  alteration,  and  executed  with  the 
same  formalities  with  rwhich  the  will  itself  was  required  by  law  to 
be  executed ;  or  unless  such  will  be  burnt,  torn,  canceled,  obliterated 
or  destroyed,  with  the  intent  and  for  the  purpose  of  revoking  the 
same,  by  the  testator  himself,  or  by  another  person  in  his  presence, 
by  his  direction  and  consent ;  and  when  so  done  by  another  person, 
the  direction  and  consent  of  the  testator,  and  the  fact  of  such  injury 
or  destruction,  shall  be  proved  by  at  least  two  witnesses. 

Derivation:     R.  S.,  Part  2,  ch.  6,  Tit.  1,  Art.  3,  §  42. 
§   35.  Revocation  by  marriage  and  birth  of  issne. 

If  after  the  making  of  any  will,  disposing  of  the  whole  estate  of 


DECEDENT  ESTATE  LAW  615 

the  testator,  such  testator  shall  marry,  and  have  issue  of  such  mar- 
riage, born  either  in  his  lifetime  or  after  his  death,  and  the  wife  or 
the  issue  of  such  marriage  shall  be  living  at  the  death  of  the  testa- 
tor, such  will  shall  be  deemed  revoked,  unless  provision  shall  have 
been  made  for  such  issue  by  some  settlement,  or  unless  such  issue 
shall  be  provided  for  in  the  will,  or  in  such  way  mentioned  therein, 
as  to  show  an  intention  not  to  make  such  provision;  and  no  other 
evidence  to  rebut  the  presumption  of  such  revocation,  shall  be 
received. 
Derivation!  R.  s.,  Tart  2,  ch.  6,  Tit.  1,  Art  3,  §  43. 

§   36.  Will    of    unmarried    woman. 

A  will  executed  by  an  unmarried  woman,  shall  be  deemed 
revoked  by  her  subsequent  marriage. 

Derivation:     R.  S.,  Part  2,  ch.  6,  Tit.  1,  Art.  3,  §  44. 

§   37.  Bond  or  agreement  to  convey  property  devised  or  bequeathed 
not    a   revocation. 

A  bond,  agreement,  or  covenant,  made  for  a  valuable  considera- 
tion, by  a  testator,  to  convey  any  property  devised  or  bequeathed  in 
any  will  previously  made,  shall  not  be  deemed  a  revocation  of  such 
previous  devise  or  bequest,  either  at  law  or  in  equity;  but  such 
property  shall  pass  by  the  devise  or  bequest,  subject  to  the  same 
remedies  on  such  bond,  agreement  or  covenant,  for  a  specific  per- 
formance or  otherwise,  against  the  devisees  or  legatees,  as  might 
be  had  by  law  against  the  heirs  of  the  testator,  or  his  next  of  kin, 
if  the  same  had  descended  to  them. 

Derivation:     R.  S.,  Part  2,  ch.  6,  Tit.  1,  Art.  3,  $  45. 

§  38.  Charge  or  incnmbrance  not  a  revocation. 

A  charge  or  incumbrance  upon  any  real  or  personal  estate,  for 
the  purpose  of  securing  the  payment  of  money,  or  the  performance 
of  any  covenant,  shall  not  be  deemed  a  revocation  of  any  will  rela- 
ting to  the  same  estate,  previously  executed ;  but  the  devises  and 
legacies  therein  contained,  shall  pass  and  take  effect,  subject  to  such 
charge  or  incumbrance. 

Derivation  t     R.  S.,  Part  2,  ch.  6,  Tit.  1,  Art.  3,  §  46. 

§  39.  Conveyance,  when  net  to  be  deemed  a  revocation. 

A  conveyance,  settlement,  deed,  or  other  act  of  a  testator,  by 
which  his  estate  or  interest  in  property,  previously  devised  or 
bequeathed  by  him,  shall  be  altered,  but  not  wholly  divested,  shall 
not  be  deemed  a  revocation  of  the  devise  or  bequest  of  such  prop- 
erty ;  but  such  devise  or  bequest  shall  pass  to  the  devisee  or  legatee, 


616  INHERITANCE  TAXATION 

the  actual  estate  or  interest  of  the  testator,  which  would  otherwise 
descend  to  his  heirs,  or  pass  to  his  next  of  kin ;  unless  in  the  in- 
strument by  which  such  alteration  is  made,  the  intention  is 
declared,  that  it  shall  operate  as  a  revocation  of  such  previous 
devise  or  bequest. 

Derivation:     R.  S.,  Part  2,  ch.  6,  Tit.  1,  Art.  3,  §  47. 

§  4O.  Conveyance,  when  to  be  deemed  a  revocation. 

But  if  the  provisions  of  the  instrument  by  which  such  alteration 
is  made,  are  wholly  inconsistent  with  the  terms  and  nature  of  such 
previous  devise  or  bequest,  such  instrument  shall  operate  as  a 
revocation  thereof,  unless  such  provisions  depend  on  a  condition 
or  contingency,  and  such  condition  be  not  performed,  or  such  con- 
tingency do  not  happen. 
Derivation:  R.  s.,  Part  2,  ch.  6,  Tit.  1,  Art.  3,  §  48. 

§  41.  Canceling   or  revocation   of   second   will    not  to   revive   first. 

If,  after  the  making  of  any  will,  the  testator  shall  duly  make 
and  execute  a  second  will,  the  destruction,  canceling  or  revocation 
of  such  second  will,  shall  not  revive  the  first  will,  unless  it  appear 
by  the  terms  of  such  revocation,  that  it  was  his  intention  to  revive 
and  give  effect  to  his  first  will;  or  unless  after  such  destruction, 
canceling  or  revocation,  he  shall  duly  republish  his  first  will. 
Derivation :  R.  s.,  Part  2,  ch.  6,  Tit.  1,  Art.  3,  §  53. 

§  42.  Record   of   wills  in    county   clerk's   office. 

A  will  of  real  property,  which  has  been,  at  any  time,  either 
before  or  after  this  chapter  takes  effect  duly  proved  in  the  supreme 
court,  or  the  court  of  chancery,  or  before  a  surrogate  of  the  state 
with  the  certificate  of  proof  thereof  annexed  thereto,  or  indorsed 
thereon,  or  an  exemplified  copy  thereof,  may  be  recorded  in  the 
office  of  the  clerk  or  the  register,  as  the  case  requires,  of  any  county 
in  the  state,  in  the  same  manner  as  a  deed  of  real  property.  Where 
the  will  relates  to  real  property,  the  executor  or  administrator,  with 
the  will  annexed,  must  cause  the  same,  or  an  exemplified  copy 
thereof,  to  be  so  recorded,  in  each  county  where  real  property  of 
the  testator  is  situated,  within  twenty  days  after  letters  are  issued 
to  him.  An  exemplification  of  the  record  of  such  a  will,  from  any 
surrogate's  or  other  office  where  the  same  has  been  so  recorded, 
either  before  or  after  this  chapter  takes  effect,  may  be  in  like 
manner  recorded  in  the  office  of  the  clerk  or  register  of  any  county. 
Such  a  record  or  exemplification,  or  an  exemplification  of  the  record 


DECEDENT  ESTATE  LAW  617 

thereof,  must  be  received  in  evidence,  as  if  the  original  will  was 
produced  and  proved. 

Derivation:     Code  Civil  Procedure,  §  2633. 

§  43.  County  clerk's  index  of  recorded  wills. 

Upon  recording  a  will  or  exemplification,  as  prescribed  in  the 
last  section,  the  clerk  or  register  must  index  it  in  the  same  books, 
and  substantially  in  the  same  manner,  as  if  it  was  a  deed  recorded 
in  his  office. 

Derivation*     Code   Civil    Procedure,    §    2634.     For    remainder   of  section, 
see  Code  Civil  Procedure,  §  2634. 

§   44.  Recording   will   proved  in  another   state   or   foreign   country. 

Where  real  property  situated  within  this  state,  or  an  interest 
therein,  is  devised  or  made  subject  to  a  power  of  disposition  by  a 
will  duly  executed  in  conformity  with  the  laws  of  this  state,  of  a 
person  who  was  at  the  time  of  his,  or  her  death,  a  resident  else- 
where within  the  United  States,  or  in  a  foreign  country,  and  such 
will  has  been  admitted  to  probate  within  the  state  or  territory,  or 
foreign  country,  where  the  decedent  so  resided,  and  is  filed  or 
recorded  in  the  proper  office  as  prescribed  by  the  laws  of  that 
state  or  territory  or  foreign  country,  a  copy  of  such  will  or  of  the 
record  thereof  and  of  the  proofs  or  of  the  records  thereof,  or  if 
the  proofs  are  not  on  file  or  recorded  in  such  office,  of  any  statement, 
on  file  or  recorded  in  such  office,  of  the  substance  of  the  proofs, 
authenticated  as  prescribed  in  section  forty-five  of  this  chapter,  or 
if  no  proofs  and  no  statement  of  the  substance  of  the  proofs  be  on 
file  or  recorded  in  such  office,  a  copy  of  such  will  or  of  the  record 
thereof,  authenticated  as  prescribed  in  said  section  forty-five,  ac- 
companied by  a  certificate  that  no  proofs  or  statement  of  the  sub- 
stance of  proof  of  such  will,  are  or  is  on  file  or  recorded  in  such 
office,  made  and  likewise  authenticated  as  prescribed  in  said  section 
forty-five,  may  be  recorded  in  the  office  of  the  surrogate  of  any 
county  in  this  state  where  such  real  property  is  situated ;  and  such 
record  in  the  office  of  such  surrogate  or  an  exemplified  copy  thereof 
shall  be  presumptive  evidence  of  such  will  and  of  the  execution 
thereof,  in  any  action  or  special  proceeding  relating  to  such  real 
property. 

Derivation!     Code  Civil  Procedure,  §  2703.    Amended  by  L.  1909,  ch.  240, 
5  13,  in  effect  April  22,  1909. 

§   45.  Authentication    of    paper*    from    another    state     or    foreign 
country  for  nse  in  this  state. 

To  entitle  a  copy  of  a  will  admitted  to  probate  or  of  letters 


618  INHERITANCE  TAXATION 

testamentary  or  of  letters  of  administration,  granted  in  any  other 
state  or  in  any  territory  of  the  United  States,  and  of  the  proofs  or 
of  any  statement  of  the  substance  of  the  proofs  of  any  such  will, 
or  of  the  record  of  any  such  will,  letters,  proofs  or  statement,  to  be 
recorded  or  used  in  this  state  as  provided  in  article  seventh  of  title 
third  of  chapter  eighteenth  of  the  code  of  civil  procedure  or  in  sec- 
tion forty-four  of  this  chapter,  such  copy  must  be  authenticated  by 
the  seal  of  the  court  or  officer  by  which  or  whom  such  will  was  ad- 
mitted to  probate  or  such  letters  were  granted,  or  having  the  custody 
of  the  same  or  of  the  record  thereof,  and  the  signature  of  a  judge 
of  such  court  or  the  signature  of  such  officer  and  of  the  clerk  of 
such  court  or  officer  if  any ;  and  must  be  further  authenticated  by 
a  certificate  under  the  great  or  principal  seal  of  such  state  or  ter- 
ritory, and  the  signature  of  the  officer  who  has  the  custody  of  such 
seal,  to  the  effect  that  the  court  or  officer  by  which  or  whom  such 
will  was  admitted  to  probate  or  such  letters  were  granted,  was  duly 
authorized  by  the  laws  of  such  state  or  territory  to  admit  wills  to 
probate  or  to  grant  letters  testamentary  or  of  administration  and 
to  keep  the  same  and  records  thereof ;  that  the  seal  of  such  court  or 
officer  affixed  to  such  copy  is  genuine,  and  that  the  officer  making 
such  certificate  under  such  seal  of  such  state  or  territory  verily 
believes  that  each  of  the  signatures  attesting  such  copy  is  genuine ; 
and  to  entitle  any  certificate  concerning  proofs  accompanying  the 
copy  of  the  will  or  of  the  record  so  authenticated,  to  be  recorded 
or  used  in  this  state,  as  provided  in  said  article  or  section,  such  cer- 
tificate must  be  under  the  seal  of  the  court  or  officer  by  which  or 
whom  such  will  was  admitted  to  probate,  or  having  the  custody  of 
such  will  or  record,  and  the  signature  of  a  judge  or  the  clerk  of 
such  court,  or  the  signature  of  such  officer,  authenticated  by  a  cer- 
tificate under  such  great  or  principal  seal  of  such  state  or  territory, 
and  the  signature  of  the  officer  having  the  custody  thereof,  to  the 
effect  that  the  seal  of  the  court  or  officer  affixed  to  such  certificate 
concerning  proofs  is  genuine,  and  that  such  officer  making  such 
certificate  under  such  seal  of  such  state  or  territory,  verily  believes 
that  the  signature  to  such  certificate  concerning  proofs  is  genuine. 
To  entitle  a  copy  of  a  will  admitted  to  probate  or  of  letters  testa- 
mentary, or  of  letters  of  administration,  granted  in  a  foreign 
country,  and  of  the  proofs  or  of  any  statement  of  the  substance  of 
the  proofs  of  any  such  will,  or  of  the  record  of  any  such  will, 
letters,  proofs  or  statement,  to  be  recorded  or  used  in  this  state, 


DECEDENT  ESTATE  LAW  619 

as  provided  in  said  article  or  section,  such  copy  must  be  authen- 
ticated in  the  manner  prescribed  by  the  laws  of  such  foreign 
country,  and  must  be  further  authenticated  by  a  certificate  of  a 
judge  of  a  court  of  record  or  by  the  chief  officer  of  the  department 
of  justice  of  such  foreign  country  to  the  effect  that  such  authentica- 
tion is  in  conformity  with  the  laws  of  such  foreign  country,  and 
that  the  court  or  officer  by  which  or  by  whom  such  will  was  so  ad- 
mitted to  probate,  or  such  letters  were  granted,  was  duly  authorized 
by  the  laws  of  such  foreign  country  to  admit  wills  to  probate,  or  to 
grant  letters  testamentary  or  of  administration,  and  to  keep  the  same 
and  records  thereof ;  and  the  signature  and  official  character  of  such 
judge  or  court  of  record  or  of  such  chief  officer  of  the  department 
of  justice  shall  be  attested  by  a  consular  officer  of  the  United 
States,  resident  in  such  foreign  country,  under  the  seal  of  his  office ; 
and  to  entitle  any  certificate  concerning  proofs  accompanying  the 
copy  of  the  will  or  of  the  records  so  authenticated,  to  be  used  and 
recorded  in  this  state,  as  provided  in  said  article  or  section,  such 
certificate  concerning  the  proofs  must  be  similarly  authenticated 
and  attested. 

Derivation:     Code  Civil  Procedure,  §  2704.     Amended  by  L.  1909,  ch.  340, 
in  effect  September  1,  1909. 

§   46.  Validity    of   purchase    notwithstanding    devise. 

The  title  of  a  purchaser  in  good  faith  and  for  a  valuable  con- 
sideration, from  the  heir  of  a  person  who  died  seized  of  real  prop- 
erty, shall  not  be  affected  by  a  devise  of  the  property  made  by  the 
latter,  unless  within  four  years  after  the  testator's  death,  the  will 
devising  the  same  is  either  admitted  to  probate  and  recorded  as  a 
will  of  real  property  in  the  office  of  the  surrogate  having  jurisdic- 
tion, or  established  by  the  final  judgment  of  a  court  of  competent 
jurisdiction  of  the  state,  in  an  action  brought  for  that  purpose. 
But  if,  at  the  time  of  the  testator's  death,  the  devisee  is  either  within 
the  age  of  twenty-one  years,  or  insane,  or  imprisoned  on  a  criminal 
charge,  or  in  execution  upon  conviction  of  a  criminal  offense,  for  a 
term  less  than  for  life ;  or  without  the  state ;  or,  if  the  will  was  con- 
cealed by  one  or  more  of  the  heirs  of  the  testator,  the  limitation 
created  by  this  section  does  not  begin  until  after  the  expiration  of 
one  year  from  the  removal  of  such  a  disability,  or  the  delivery  of 
the  will  to  the  devisee  or  his  representative,  or  to  the  proper  sur- 
rogate. 

Derivation:     Code  Civil  Procedure,  §  2628. 


620  INHERITANCE  TAXATION 

§   47.  Validity  wad  effect  of   testamentary  dispositions. 

The  validity  and  effect  of  a  testamentary  disposition  of  real 
property,  situated  within  the  state,  or  of  an  interest  in  real  prop- 
erty so  situated,  which  would  descend  to  the  heir  of  an  intestate, 
and  the  manner  in  which  such  property  or  such  an  interest  descends, 
where  it  is  not  disposed  of  by  will,  are  regulated  by  the  laws  of  the 
state,  without  regard  to  the  residence  of  the  decedent.  Except 
where  special  provision  is  otherwise  made  by  law,  the  validity  and 
effect  of  a  testamentary  disposition  of  any  other  property  situated 
within  the  state,  and  the  ownership  and  disposition  of  such  property, 
where  it  is  not  disposed  of  by  will,  are  regulated  by  the  laws  of  the 
utate  or  country,  of  which  the  decedent  was  a  resident,  at  the  time  of 
his  death.  Whenever  a  decedent,  being  >a  citizen  of  the  United 
States,  wherever  resident,  shall  have  declared  in  his  will  and  testa- 
i  ment  that  he  elects  that  such  testamentary  dispositions  shall  be  con- 
strued and  regulated  by  the  laws  of  this  State,  the  validity  and 
effect  of  such  depositions  shall  be  determined  by  such  laws. 
(Amended  by  L.  1911,  ch.  244,  in  effect  June  6,  1911.) 

Derivation:     Code  Civil  Procedure,  §  2694. 
§  48.  Application  of  certain  section*  in  thi«  article. 

Section  twenty-five  hundred  and  fourteen  of  the  code  of  civil 
procedure  is  applicable  to  the  provisions  of  sections  twenty-three  to 
twenty-five,  both  inclusive,  and  sections  forty-two  to  forty-seven, 
both  inclusive,  of  this  chapter. 

Added  by  L.  1909,  ch.  240,  §  16.    In  effect  April  22,  1903. 


DECEDENT  ESTATE  LAW  621 


ARTICLE  3. 

DESCENT  AND  DISTRIBUTION. 

SUCTION     80.  Definitions  and  use  of  terms;  effect  of  article. 

81.  General  rule  of  descent. 

82.  Lineal  descendants  of  equal  degree. 

83.  Lineal  descendants  of  unequal  degree. 

84.  When  father  inherits. 

85.  When  mother  inherits. 

86.  When   collateral  relatives  inherit;   collateral  relatives  of 

equal  degree. 

87.  Brothers  and  sisters  and  their  descendants. 

88.  Brothers  and  sisters  of  father  and  mother  and  their  de- 

scendants and  grandparents. 

89.  Illegitimate  children. 

90.  Relatives  of  the  half-blood. 

91.  Relatives  of  husband  or  wife. 

92.  Cases  not  hereinbefore  provided  for. 

93.  Posthumous  children  and  relatives. 
94  Inheritance,  sole  or  in  common. 

95.  Alienism  of  ancestor. 

96.  Advancements  of  real  and  personal  estates. 

97.  How  advancement  adjusted. 

98.  Distribution  of  personal  property  of  decedent. 

99.  Advancements  of  personal  estates. 

100.  Estates  of  married  women. 

101.  Liability  of  heirs  and  devisees  for  debt  of  decedent. 

102.  Liability  of  heir  or  devisee  not  affected  where  will  makes 

specific  provision  for  payment  of  debt. 

103.  Action  against  husband  for  debts  of  deceased  wife. 

104.  Application  of  certain  sections  in  this  article. 

§  8O.  Definitions  and  use  of  terms;  effect  of  article. 

1.  The  term  "  real  property  "  as  used  in  this  article,  includes 
every  estate,  interest  and  right,  legal  and  equitable,  in  lands, 
tenements  and  hereditaments,  except  such  as  are  determined  or 
extinguished  by  the  death  of  an  intestate,  seized  or  possessed 
thereof,  or  in  any  manner  entitled  thereto ;  leases  for  years,  estates 
for  the  life  of  another  person ;  and  real  property  held  in  trust, 
not  devised  by  the  beneficiary.  "  Inheritance  "  'means  real  prop- 
erty as  herein  defined,  descended  according  to  the  provisions  of 
this  article. 


622  INHERITANCE  TAXATION 

2.  The  expressions  "  Where  the  inheritance  shall  have  come  to 
the  intestate  on  the  part  of  the  father  "  or  "  mother,"  as  the  case 
may  be,  include  every  case  where  the  inheritance  shall  have  come 
to  the  intestate  by  devise,  gift  or  descent  from  the  parent  referred 
to,  or  from  any  relative  of  the  blood  of  such  parent. 

3.  When  in  this  article  a  person  is  described  as  "  living,"  it 
means  living  at  the  time  of  the  death  of  the  intestate  from  whom 
the  descent  came ;  when  he  is  described  as  having  "  died,"  it  means 
that  he  died  before  such  intestate. 

4.  This  article  does  not  affect  a  limitation  of  an  estate  by  deed 
or  will,  or  tenancy  by  the  courtesy  or  dower. 

Derivation:     Real  Property  Law,  L.  1896,  ch.  547,  §  280. 

§  81.  General  rule  of  descent. 

The  real  property  of  a  person  who  dies  without  devising  the 
same  shall  descend: 

1.  To  his  lineal  descendants. 

2.  To  his  father. 

3.  To  his  mother ;  and 

4.  To  his  collateral  relatives,   as  prescribed  in  the  following 
sections  of  this  article. 

Derivation:     Real  Property  Law,  L.  1896,  ch.  547,  §  281. 

§   82.  Lineal    descendants    of   equal    degree. 

If  the  intestate  leave  descendants  in  the  direct  line  of  lineal 
descent,  all  of  equal  degree  of  consanguinity  to  him,  the  inheritance 
shall  descend  to  them  in  equal  parts  however  remote  from  him  the 
common  degree  of  consanguinity  may  be. 

Derivation  t     Real  Property  Law,  L.  1896,  ch.  547,  §  282. 

§   83.  Lineal  descendants  of  unequal  degree. 

If  any  of  the  descendants  of  such  intestate  be  living,  and  any  be 
dead,  the  inheritance  shall  descend  to  the  living,  and  the  descen- 
dants of  the  dead,  so  that  each  living  descendant  shall  inherit  such 
share  as  would  have  descended  to  him  had  all  the  descendants  in 
the  same  degree  of  consanguinity  who  shall  have  died  leaving  issue 
been  living;  and  so  that  issue  of  the  descendants  who  shall  have 
died  shall  respectively  take  the  shares  which  their  ancestors  would 
have  received. 

Derivation:     Real  Property  Law,  L.  1896,  ch.  547,  §   283. 

§   84.  When    father    inherits. 

If  the  intestate  die  without  lawful  descendants,  and  leave  a 
father,  the  inheritance  shall  go  to  such  father,  unless  the  inheritance 


DECEDENT  ESTATE  LAW  623 

came  to  the  intestate  on  the  part  of  his  mother,  and  she  be  living ; 
if  she  be  dead,  the  inheritance  descending  on  her  part  shall  go  to 
the  father  for  life,  and  the  reversion  to  the  brothers  and  sisters  of 
the  intestate  and  their  descendants,  according  to  the  law  of  inheri- 
tance by  collateral  relatives  hereinafter  provided ;  if  there  be  no 
such  brothers  or  sisters  or  their  descendants  living,  such  inheritance 
shall  descend  to  the  father  in  fee. 
Derivation  i  Real  Property  Law,  L.  1896,  ch.  547,  §  284. 

§   85.  When   mother  inherits. 

If  the  intestate  die  without  descendants  and  leave  no  father,  or 
leave  a  father  not  entitled  to  take  the  inheritance  under  the  last 
section,  and  leave  a  mother,  and  a  brother  or  sister,  or  the  descen- 
dant of  a  brother  or  sister,  the  inheritance  shall  descend  to  the 
mother  for  life,  and  the  reversion  to  such  brothers  and  sisters  of 
the  intestate  as  may  be  living,  and  the  descendants  of  such  as  may 
be  dead,  according  to  the  same  law  of  inheritance  hereinafter  pro- 
vided. If  the  intestate  in  such  case  leave  no  brother  or  sister  or 
descendant  thereof,  the  inheritance  shall  descend  to  the  mother  in 
fee. 

Derivation:     Real  Property  Law,  L.  1896,  ch.  547,  §  285. 

§   86.  When    collateral    relatives    inherit;     collateral    relatives    of 
equal    degree. 

If  there  be  no  father  or  mother  capable  of  inheriting  the  estate, 
it  shall  descend  in  the  cases  hereinafter  specified  to  the  collateral 
relatives  of  the  intestate;  and  if  there  be  several  such  relatives, 
all  of  equal  degree  of  consanguinity  to  the  intestate,  the  inheri- 
tance shall  descend  to  them  in  equal  parts,  however  remote  from 
him  the  common  degree  of  consanguinity  may  be. 

Derivation!     Real  Property  Law,  L.  1896,  ch.  547,  §  286. 

§   87.  Brothers    and    sisters    and    their    descendants. 

If  all  the  brothers  and  sisters  of  the  intestate  be  living,  the  in- 
heritance shall  descend  to  them ;  if  any  of  them  be  living  and  any 
be  dead,  to  the  brothers  and  sisters  living,  and  the  descendants,  in 
whatever  degree,  of  those  dead ;  so  that  each  living  brother  or  sister 
shall  inherit  such  share  as  would  have  descended  to  him  or  her  if 
all  the  brothers  and  sisters  of  the  intestate  who  shall  have  died, 
leaving  issue,  had  been  living,  and -so  that  such  descendants  in  what- 
ever degree  shall  collectively  inherit  the  share  which  their  parent 
would  have  received  if  living ;  and  the  same  rule  shall  prevail  as  to 


624  INHERITANCE  TAXATION 

all  direct  lineal  descendants  of  every  brother  and  sister  of  the  intes- 
tate whenever  such  descendants  are  of  unequal  degrees. 

Derivation:     Real  Property  Law,  L.  1896,  ch.  547,  §  287. 

§  88.  Brothers  and  sisters  of  father  and  mother  and  their  descend- 
ants   and    grandparents. 

If  there  be  no  heir  entitled  to  take,  under  either  of  the  preceding 
sections,  the  inheritance,  if  it  shall  have  come  to  the  intestate  on 
the  part  of  the  father,  shall  descend : 

1.  To  the  brothers  and  sisters  of  the  father  of  the  intestate  in 
equal  shares,  if  all  be  living. 

2.  If  any  be  living,  and  any  shall  have  died,  leaving  issue,  to 
such  brothers  and  sisters  as  shall  be  living  and  to  the  descendants 
of  such  as  shall  have  died. 

3.  If  all  such  brothers  and  sisters  shall  have  died,  to  their  de- 
scendants. 

4.  If  there  be  no  such  brothers  or  sisters  of  such  father,  nor  any 
descendants  of  such  brothers  or  sisters,  to  the  brothers  and  sisters 
of  the  mother  of  the  intestate,  and  to  the  descendants  of  such  as 
shall  have  died,  or  if  all  have  died,  to  their  descendants.     But,  if 
the  inheritance  shall  have  come  to  the  intestate  on  the  part  of  his 
mother,  it  shall  descend  to  her  brothers  and  sisters  and  their  de- 
scendants ;  and  if  there  be  none,  to  the  brothers  and  sisters  of  the 
father  and  their  descendants,  in  the  manner  aforesaid.     If  the 
inheritance  has  not  come  to  the  intestate  on  the  part  of  either  father 
or  mother,  it  shall  descend  to  the  brothers  and  sisters  both  of  the 
father  and  mother  of  the  intestate,  and  their  descendants  in  the 
same  manner.     In  all  cases  mentioned  in  this  section  the  inherit- 
ance shall  descend  to  the  brothers  and  sisters  of  the  intestate's 
father  or  mother,  as  the  case  may  be,  or  to  their  descendants  in  like 
manner  as  if  they  had  been  the  brothers  and  sisters  of  the  intestate. 

5.  If  there  be  no  such  brothers  or  sisters  of  such  father  or 
mother,  nor  any  descendants  of  such  brothers  or  sisters,  the  in- 
heritance, if  it  shall  have  come  to  the  intestate  on  the  part  of  his 
father,  shall  descend  to  his  father's  parents,  then  living,  in  equal 
parts,  and  if  they  be  dead,  then  to  his  mother's  parents,  then  living, 
in  equal  parts ;  but  if  the  inheritance  shall  have  come  to  the  intes- 
tate on  the  part  of  his  mother,  it  shall  descend  to  his  mother's 
parents,  then  living,  in  equal  parts,  and  if  they  be  dead,  to  his 
father's  parents,  then  living,  in  equal  parts.     If  the  inheritance 


DECEDENT  ESTATE  LAW  625 

has  not  come  to  the  intestate  on  the  part  of  either  father  or  mother, 
it  shall  descend  to  his  living  grandparents  in  equal  parts. 

Derivation:  Real  Property  Law,  L.  18»6,  ch,  547,  §  288,  as  amended  by 
L.  1904,  ch.  100,  §  1. 

§  89.  Illegitimate   children. 

If  an  intestate  who  shall  have  been  illegitimate  die  without  law- 
ful, issue,  or.  illegitimate  issue  entitled  to  take,  under  this  section, 
the  inheritance  shall  descend  to  his  mother;  if  she  be  dead,  to  his 
relatives  on  her  part,  as  if  he  had  been  legitimate.  If  a  woman  die 
without  lawful  issue,  leaving  an  illegitimate  child,  the  inheritance 
shall  descend  to  him  as  if  he  were  legitimate.  In  any  other  case 
illegitimate  children' or  relatives  shall  not  inherit. 

Derivation!     Real  Property  Law,  L.  1896,  ch.  547,  §,289. 

§   9O.  Relatives  of  the  half-blood. 

Relatives  of  the  half-blood  and  their  descendants,  shall  inherit 
equally  with  those  of  the  whole  blood  and  their  descendants,  in  the 
same  degree,  unless  the  inheritance  came  to  the  intestate  by  descent, 
devise  or  gift  from  an  ancestor ;  in  which  case  all  those  who  are  not 
of  the  blood  of  such  ancestor  shall  be  excluded  from  such  in- 
heritance. 

Derivation:     Real  Property  Law,  L.  1896,  ch.  5*7,  §  290. 

§   91.  Relatives    of   husband   or   wife. 

When  the  inheritance  shall  have  come  to  the  intestate  from  a 
deceased  husband  or  wife,  as  the  case  may  be,  and  there  be  no 
person  entitled  to  inherit  under  any  of  the  preceding  sections,  then 
such  real  property  of  such  intestate  shall  descend  to  the  heirs  of 
such  deceased  husband  or  wife,  as  the  case  may  be,  and  the  persons 
entitled,  under  the  provisions  of  this  section,  to  inherit  such  real 
property,  shall  be  deemed  to  be  the  heirs  of  such  intestate. 

Derivation  i  Real  Property  Law,  L.  1896,  ch.  547,  §  290a,  as  added  by 
L.  1901,  ch.  481,  §  1. 

§   92.  Cases  not  hereinbefore  provided  for. 

In  all  cases  not  provided  for  by  the  preceding^  sections  of  this 
article,  the  inheritance  shall  descend  according  to  the  course  of  the 
common  law. 

Derivation  i     Real  Property  Law,  L.  1898,  ch.  547,  §  291. 

§   93.  Posthumous    children    and   relatives. 

A  descendant  or  a  relative  of  the  intestate  begotten  before  his 
death,  but  born  thereafter,  shall  inherit  in  the  same  manner  as  if 


626  INHERITANCE  TAXATION 

he  bad  bee«  born  m  the  lifetime  of  the  intestate  and  had  survived 
him. 
Derivation!     Real  Property  Law,  L.  1896,  ch.  547,  §  292. 

§  94.  Inheritance,  sole  or  in  common. 

When  there  is  but  one  person  entitled  to  inherit,  he  shall  take 
and  hold  the  inheritance  solely ;  when  an  inheritance  or  a  share  of 
an  inheritance  descends  to  several  persons  they  shall  take  as  tenants 
in  common,  in  proportion  to  their  respective  rights. 

Derivation!     Real  Property  Law,  L.  1896,  ch.  547,  §  293. 

§   95.  Alienism    of   ancestor. 

A  person  capable  of  inheriting  under  the  provisions  of  this 
article,  shall  not  be  precluded  from  such  inheritance  by  reason  of 
the  alienism  of  an  ancestor. 

Derivation!     Real  Property  Law,  L.  1896,  ch.  547,  §  294. 

§  96.  Advancements  of  real  and  personal  estates. 

If  a  child  of  an  intestate  shall  have  been  advanced  by  him,  by 
settlement  or  portion,  real  or  personal  property,  the  value  thereof 
must  be  reckoned  for  the  purposes  of  descent  and  distribution  as 
part  of  the  real  and  personal  property  of  the  intestate  descendible  to 
his  heirs  and  to  be  distributed  to  his  next  of  kin ;  and  if  such  ad- 
vancement be  equal  to  or  greater  than  the  amount  of  the  share 
which  such  child  would  be  entitled  to  receive  of  the  estate  of  the 
deceased,  such  child  and  his  descendants  shall  not  share  in  the  estate 
of  the  intestate ;  but  if  it  be  less  than  such  share,  such  child  and  his 
descendants  shall  receive  so  much,  only,  of  the  personal  property, 
and  inherit  so  much  only,  of  the  real  property,  of  the  intestate,  as 
shall  be  sufficient  to  make  all  the  shares  of  all  the  children  in  the 
whole  property,  including  the  advancement,  equal.  The  value  of 
any  real  or  personal  property  so  advanced,  shall  be  deemed  to  be 
that,  if  any,  which  was  acknowledged  by  the  child  by  an  instru- 
ment in  writing;  otherwise  it  must  be  estimated  according  to  the 
worth  of  the  property  when  given.  Maintaining  or  educating  a 
child,  or  giving  him  money  without  a  view  to  a  portion  or  settle- 
ment in  life  is  not  an  advancement.  An  estate  or  interest  given  by 
a  parent  to  a  descendant  by  virtue  of  a  beneficial  power,  or  of  a 
power  in  trust  with  a  right  of  selection,  is  an  advancement, 

Derivation!     Real  Property  Law,  L.  1896,  ch.  547,  §  295. 

§  97.  How  advancement  adjnsted. 

When  an  advancement  to  be  adjusted  consisted  of  real  property, 
the  adjustment  must  be  made  out  of  the  real  property  descendible 


DECEDENT  ESTATE  LAW  627 

to  the  heirs.  When  it  consisted  of  personal  property,  the  adjust- 
ment must  be  made  out  of  the  surplus  of  the  personal  property  to 
be  distributed  to  the  next  of  kin.  If  either  species  of  property  is 
insufficient  to  enable  the  adjustment  to  be  fully  made,  the  deficiency 
must  be  adjusted  out  of  the  other. 

Derivation  t     Real  Property  Law,  L.  1896,  ch.  547,  §  296. 
§   98.  Distribution  of  personal  property  of  decedent. 

If  the  deceased  died  intestate,  the  surplus  of  his  personal  prop- 
erty after  payment  of  debts;  and  if  he  left  a  will,  such  surplus, 
after  the  payment  of  debts  and  legacies,  if  not  bequeathed,  must  be 
distributed  to  his  widow,  children,  or  next  of  kin,  in  manner 
following: 

1.  One-third  part  to  the  widow,  and  the  residue  in  equal  por- 
tions among  the  children,  and  such  persons  as  legally  represent  the 
children  if  any  of  them  have  died  before  the  deceased. 

2.  If  there  be  no  children,  nor  any  legal  representatives  of  them, 
then  one-half  of  the  whole  surplus  shall  be  allotted  to  the  widow, 
and  the  other  half  distributed  to  the  next  of  kin  of  the  deceased, 
entitled  under  the  provisions  of  this  section. 

3.  If  the  deceased  leaves  a  widow,  and  no  descendant,  parent, 
brother  or  sister,  nephew  or  niece,  the  widow  shall  be  entitled  to  the 
whole  surplus ;  but  if  there  be  a  brother  or  sister,  nephew  or  niece, 
and  no  descendant  or  parent,  the  widow  shall  be  entitled  to  one-half 
of  the  surplus  as  above  provided,  and  to  the  whole  of  the  residue  if 
it  does  not  exceed  two  thousand  dollars ;  if  the  residue  exceeds  that 
sum,  she  shall  receive  in  addition  to  the  one-half,  two  thousand 
dollars ;  and  the  remainder  shall  be  distributed  to  the  brothers  and 
sisters  and  their  representatives. 

4.  If  there  be  no  widow,  the  whole  surplus  shall  be  distributed 
equally  to  and  among  the  children,  and  such  as  legally  represent 
them. 

5.  If  there  be  no  widow,  and  no  children,  and  no  representatives 
of  a  child,  the  whole  surplus  shall  be  distributed  to  the  next  of  kin, 
in    equal    degree    to    the    deceased,    and    their    legal    representa- 
tives ;  and  if  all  the  brothers  and  sisters  of  the  intestate  be  living, 
the  whole  surplus  shall  be  distributed  to  them;  if  any  of  them  be 
living  and  any  be  dead,  to  the  brothers  and  sisters  living,  and  the 
descendants  in  whatever  degree  of  those  dead ;  so  that  to  each  living 
brother  or  sister  shall  be  distributed  such  share  as  would  have  been 
distributed  to  him  or  her  if  all  the  brothers  and  sisters  of  the  intes- 


INHERITANCE  TAXATION 

tate  who  shall  have  died  leaving  issue  had  been  living,  and  so  that 
there  shall  be  distributed  to  such  descendants  in  whatever  degree, 
collectively,  the  share  which  their  parent  would  have  received  if 
living;  and  the  same  rule  shall  prevail  as  to  all  direct  lineal  de- 
scendants of  every  brother  and  sister  of  the  intestate  whenever 
such  descendants  are  of  unequal  degrees. 

6.  If  the  deceased  leave  no  children  and  no  representatives  of 
them,  and  no  father,  and  leave  a  widow  and  a  mother,  the  half  not 
distributed  to  the  widow  shall  be  distributed  in  equal  shares  to  his 
mother  and  brothers  and  sisters,  or  the  representatives  of  such 
brothers  and  sisters ;  and  if  there  be  no  widow,  the  whole  surplus 
shall  be  distributed  in   like  manner  to  the  mother,   and  to  the 
brothers  and  sisters,  or  the  representatives  of  such  brothers  and 
sisters. 

7.  If  the  deceased  leave  a  father  and  no  child  or  descendant,  the 
father  shall  take  one-half  if  there  be  a  widow,  and  the  whole,  if 
there  be  no  widow. 

8.  If  the  deceased  leave  a  mother,   and  no  child,  descendant, 
father,  brother,  sister,  or  representative  of  a  brother  or  sister,  the 
mother,  if  there  be  a  widow,  shall  take  one-half;  and  the  whole,  if 
there  be  no  widow. 

9.  If  the  deceased  was  illegitimate  and  leave  a  mother,  and  no 
child,  or  descendant,  or  widow,  such  mother  shall  take  the  whole 
and  shall  be  entitled  to  letters  of  administration  in  exclusion  of  all 
other  persons.     If  the  mother  of  such  deceased  be  dead,  the  rela- 
tives of  the  deceased  on  the  part  of  the  mother  shall  take  in  the 
same  manner  as  if  the  deceased  had  been  legitimate,  and  be  en- 
titled to  letters  of  administration  in  the  same  order. 

10.  Where  the  descendants,  or  next  of  kin  of  the  deceased, 
entitled  to  share  in  his  estate,  are  all  in  equal  degree  to  the  de- 
ceased, their  shares  shall  be  equal. 

11.  When  such  descendants  or  next  of  kin  are  of  unequal  degrees 
of  kindred,  the  surplus  shall  be  apportioned  among  those  entitled 
thereto,   according  to  their  respective  stocks;   so  that  those  who 
take  in  their  own  righta  shall  receive  equal  shares,  and  those  who 
take  by  representation  shall  receive  the  share  to  which  the  parent 
whom  they  represent,  if  living,  would  have  been  entitled. 

12.  !N"o  representation  shall  be  admitted  among  collaterals  after 
brothers  and  sisters  descendants.     This  subdivision  shall  not  ap- 


•DECEDENT  ESTATE  LAW  629 

ply  to  the  estate  of  a  decedent  who  shall  have  died  prior  to  May 
eighteenth,  nineteen  hundred  and  five. 

13.  Relatives  of  the  half-blood  shall  take  equally  with  those  of 
the  whole  blood  in  the  same  degree;  and  fhe  representatives  of 
such  relatives  shall  take  in  the  same  manner  as  the  representatives 
of  the  whole  blood. 

14.  (Descendants  and  next  of  kin  of  the  deceased,  begotten  before 
his  death,  but  born  thereafter,  shall  take  in  the  same  manner  as  if 
they  had  been  born  in  the  lifetime  of  the  deceased,  and  had  sur- 
vived him. 

15.  .If  a  woman  die,  leaving  illegitimate  children,  and  no  law- 
ful issue,  such  children  inherit  her  personal  property  as  if  legit- 
imate. 

15-a.  If  there  be  no  husband  or  wife  surviving  and  no  children, 
and  no  representatives  of  a  child,  and  no  next  of  kin,  then  the 
whole  surplus  shall  be  allotted  to  a  surviving  child  of  the  husband 
or  wife  of  the  deceased,  or  if  there  be  more  than  one,  it  shall  be 
distributed  equally  among  them.  (This  subdivision  added  by  L. 
1913,  ch.  489,  in  effect  May  14,  1913.) 

16.  If  there  be  no  husband  or  wife  surviving  and  no  children, 
and  no  representatives  of  a  child,  and  no  next  of  kin,  and  no  child 
or  children  of  the  husband  or  wife  of  the  deceased,  then  the  "whole 
surplus  shall  be  distributed  equally  to  and  among  the  next  of  kin 
,of  the  ihusband  or  wife  of  the  deceased,  as  the  case  may  -be,  and 
such  next  of  kin  shall  be  deemed  next  of  kin  of  the  deceased  for 
all  the  purposes  specified  in  this  article  or  in  chapter  eighteen  of 
the  code  of  civil  procedure;  but  such  surplus  shall  not,  and  shall 
not  be  construed  to,  embrace  any  personal  property  except  such 
as  was  received  by  the  deceased  from  such  husband  or  wife,  as 
the  case  may  be,  by  will  or  by  virtue  of  the  laws  relating  to  the 
distribution   of  the   personal   property   of  the   deceased  person. 
(Amended  by  L.  1913,  ch.  489,  in  effect  May  14,  1913.:) 

Derivation:    Code  Civil  Procedure,  §  2732.    Second  sentence  in  .aubd. '12, 
is  L.  1905,  ch.  539,  §  2,  as  amended  by  L.  1909,  ch.  240,  §  14,  in  .effect 
April  22,  1909. 
§   B9.    Advancements  of  personal   estates. 

If  any  child  of  such  deceased  person  have  been  advanced  by  the 
deceased,  by  settlement  or  portion  of  real  or  personal  property,  the 
value  thereof  shall  be  reckoned  with  that  parti  of  the  surplus  of  the 
personal  property,  which  remains  to  be  distributed  among  the  chil- 
dren ;  and  if  such  advancement  be  equal  or  superior  to  the  amount, 
which,  according  to  the  preceding  section,  would  be  distributed 
to  such  child,  as  his  share  of  such  surplus  and  advancement,  such 
child  and  his  descendants  shall  be  excluded  from  any  share  in  the 
distribution  of  the  surplus.  If  such  advancement  be  not  equal  to 
such  amount,  such  child,  or  his  descendants,  shall  be  entitled  to 
receive  so  much  only,  as  is  sufficient  to  make  all  the  shares  of  all 
the  children,  in  such  surplus  and  advancement,  to  be  equal,  as  near 
as  can  be  estimated.  The  maintaining  or  educating,  or  the  giving 


630  INHERITANCE  TAXATION 

of  money  to  a  child,  without  a  view  to  a  portion  or  settlement  in 
life,  shall  not  be  deemed  an  advancement,  within  the  meaning  of 
this  section,  nor  shall  the  foregoing  provisions  of  this  section  apply 
in  any  case  where  there  is  any  real  property  of  the  intestate  to 
descend  to  his  heirs. 

Derivation:     Code   Civil   Procedure,    §    2733.     For   remainder   of  section, 
see  Code  Civil  Procedure,  §  2733. 

§    1OO.  Estates  of  married  women. 

The  provisions  of  this  article  respecting  the  distribution  of  prop- 
erty of  deceased  persons  apply  to  the  personal  property  of  married 
women  dying,  leaving  descendants  them  surviving.  The  husband 
of  any  such  deceased  married  woman  shall  be  entitled  to  the  same 
distributive  share  in  the  personal  property  of  his  wife  to  which  a 
widow  is  entitled  in  the  personal  property  of  her  husband  by  the 
provisions  of  this  article  and  no  more. 

Derivation:     Code  Civil  Procedure,  §  2734. 

§   1O1.  Liability  of  heirs  and  devisees  for  debt  of  decedent. 

The  heirs  of  an  intestate,  and  the  heirs  and  devisees  of  a  testator, 
are  respectively  liable  for  the  debts  of  the  decedent,  arising  by 
simple  contract,  or  by  specialty,  to  the  extent  of  the  estate,  interest, 
and  right  in  the  real  property,  which  descended  to  them  from,  or 
was  effectually  devised  to  them  by,  the  decedent. 

Derivation:     Code  Civil  Procedure,  §  1843. 

§   1O2.  Liability  of  heir  or  devisee  not  affected  where  will  makes 
specific  provision  for  payment  of  debt. 

The  preceding  section  and  article  two  of  title  three  of  chapter 
fifteen  of  the  code  of  civil  procedure  do  not  affect  the  liability  of 
an  heir  or  devisee,  for  a  debt  of  a  testator,  where  the  will  expressly 
charges  the  debt  exclusively  upon  the  real  property  descended  or 
devised,  or  makes  it  payable  exclusively  by  the  heir  or  devisee,  or 
out  of  the  real  property  descended  or  devised,  before  resorting  to 
the  personal  property,  or  to  any  other  real  property  descended  or  de- 
vised. 

Derivation:     Code  Civil  Procedure,  §  1859. 

§   1O3.  Action  against  husband  for  debts  of  deceased  wife. 

If  a  surviving  husband  does  not  take  out  letters  of  administration 
on  the  estate  of  his  deceased  wife,  he  is  presumed  to  have  assets 
in  his  hands  sufficient  to  satisfy  her  debts,  and  is  liable  therefor. 
A  husband  is  liable  as  administrator  for  the  debts  of  his  wife  only 
to  the  extent  of  the  assets  received  by  him.  If  he  dies  leaving  any 
assets  of  his  wife  unadministered,  except  as  otherwise  provided 


DECEDENT  ESTATE  LAW  G31 

by  law,  they  pass  to  his  executors  or  administrators  as  part  of  his 
personal  property,  but  are  liable  for  her  debts  in  preference  to  the 
creditors  of  the  husband. 

Derivation:  Code  Civil  Procedure,  §  2660.  For  remainder  of  section, 
see  Code  Civil  Procedure,  §  2660.  Amended  by  L.  1909,  ch.  240,  §  15,  in 
effect  April  22,  1909. 

§    1O4.  Application  of  certain  section*  in  this  article. 

Section  twenty-five  hundred  and  fourteen  of  the  code  of  civil  pro- 
cedure is  applicable  to  the  provisions  of  sections  ninety-eight  to  one 
hundred,  both  inclusive,  and  section  one  hundred  and  three,  of 

this  chapter. 
Added  by  L.  1909,  ch.  240,  §  16.    In  effect  April  22,  1909. 


INHERITANCE  TAXATION 


ARTICLE  4. 
EXECUTORS,  ADMINISTRATORS  AND  TESTAMENTARY  TRUSTEES. 

SECTION  110.  Sales  of  real  estate  by  executors  under  authority  of  wilL 

111.  *Investment  of  trust  funds  by  executor  or  administrator. 

112.  Executors  de  son  tort  abolished. 

113.  Special  promise  to  answer  for  debt  of  testator  or  intestate. 

114.  Liability  of  executors  and  administrators  of  executors  and 

administrators. 

115.  Rights  of  administrators  de  bonis  non. 

116.  Actions  upon  contract  by  and  against  executors. 

117.  Administrators  to  have  same  rights  and  liabilities  as  exec- 

utors. 

118.  Actions  of  trespass  by  executors  and  administrators. 

119.  Actions  of  trespass  against  executors  and  administrators. 

120.  Actions  for  wrongs,  by  or  against  executors  and  adminis- 

trators. 

121.  Action  or  proceeding  by  executor  of  executor. 

122.  Appraisal  of  estate  of  deceased  person. 

f   110.  Sales   of  real  estate  by  executors  under  authority   of  will. 

Sales  of  real  estate  situate  within  the  state  of  New  York,  made 
by  executors  in  pursuance  of  an  authority  given  by  any  last  will, 
unless  otherwise  directed  in  such  will,  may  be  public  or  private1 
and  on  such  terms  as  in  the  opinion  of  the  executor  shall  be  most' 
advantageous  to  those  interested  therein. 

Derivation  t     L.  1883,  ch.  65,  §   1. 

§  111.  Investment  of  trust  funds. 

An  executor,  administrator,  trustee  or  other  person  holding1 
trust  funds  for  investment  may  invest  the  same  in  the  same  kind 
of  securities  as  those  in  which  savings  banks  of  this  state  are  by 
law  authorized  to  invest  the  money  deposited  therein,  and  the  in- 
come derived  therefrom,  and  in  bonds  and  mortgages  on  unincum- 
bered  real  property  in  this  state  worth  fifty  per  centum  more  than 
the  amount  loaned  thereon.  Any  executor,  administrator,  trustee 
or  other  person  holding  trust  funds  may  require  such  personal  bonds 
or  guaranties  of  payment  to  accompany  investments  as  may  seem 
prudent,  and  all  premiums  paid  on  such  guaranties  may  be  charged 

*  So  in  original. 


DECEDENT  ESTATE  LAW  633 

to  or  paid  out  of  income,  providing  that  such  charge  or  payment  be 
not  more  than  at  the  rate  of  one-half  of  one  per  centum  per  annum 
on  the  par  value  of  such  investments.  But  no  trustee  shall  pur- 
chase securities  hereunder  from  himself. 

Derivation:  L.  1897,  ch.  417,  §  9  pt.,  as  amended  by  L.  1902,  ch.  295, 
§  1,  and  L.  1907,  ch.  669,  §  1. 

§    1 12.  Executors   de   son  tort  abolished. 

No  person  shall  be  liable  to  an  action  as  executor  of  his  own 
wrong,  for  having  received,  taken  or  interfered  with,  the  property 
or  effects  of  a  deceased  person ;  but  shall  be  responsible  as  a  wrong- 
doer in  the  proper  action  to  the  executors,  or  general  or  special  ad- 
ministrators, of  such  deceased  person,  for  the  value  of  any  property 
or  effects  so  taken  or  received,  and  for  all  damages  caused  by  his 
acts,  to  the  estate  of  the  deceased. 

Derivation  i     R.  S.,  Part  3,  ch.  8,  Tit.  3,  Art.  1,  §  17. 

§    113.  Special  promise  to  answer  for  debt  of  testator  or  intestate. 

No  executor  or  administrator  shall  be  chargeable  upon  any 
special  promise  to  answer  damages,  or  to  pay  the  debts  of  the  testator 
or  intestate,  out  of  his  own  estate,  unless  the  agreement  for  that 
purpose,  or  some  memorandum  or  note  thereof,  be  in  writing,  and 
signed  by  such  executor  or  administrator,  or  by  some  other  person 
by  him  thereunto  specially  authorized. 

Derivation:     R.  S.,  Part  2,  ch.  6,  Tit.  5,  §   1. 

§   114.  Liability  of  execntors  and  administrators  of  executors  and 
administrators. 

The  executors  and  administrators  of  every  person,  who,  as  ex- 
ecutor, either  of  right  or  in  his  own  'wrong,  or  as  administrator, 
shall  have  wasted  or  converted  to  his  own  use,  any  goods,  chattels, 
or  estate,  of  any  deceased  person,  shall  be  chargeable  in  the  same 
manner  as  their  testator  or  intestate  would  have  been,  if  living. 

Derivation:     R.  S.,  Part  2,  ch.  6,  Tit.  5,  §  6. 
§   115.  Rights   of  administrators   de  bonis  neru 

When  administration  of  the  effects  of  a  deceased  person,  which 
shall  have  been  left  unadministered  by  any  previous  executor  or 
administrator  of  the  same  estate,  shall  be  granted  to  any  person, 
such  person  may  appeal  from  any  judgment  obtained  against  such 
previous  executor  or  administrator  of  the  same  estate,  or  against  the 
original  testator  or  intestate ;  and  shall  defend  any  appeal  from  any 
such  judgment ;  and  shall  have  the  same  remedies,  in  the  prosecu- 
tion or  defense  of  any  action,  by  or  against  such  previous  executors 


634  INHERITANCE  TAXATION 

or  administrators,  and  for  the  collection  and  enforcing  of  any  judg- 
ment obtained  by  them,  as  they  would  have  by  law. 
Derivation  <     R.  S.,  Part  3,  ch.  8,  Tit.  3,  Art.  1,  §  18. 

§   116.  Actions  upon  contract  by  and  against  executors. 

Actions  of  account,  and  all  other  actions  upon  contract,  may  be 
maintained  by  and  against  executors,  in  all  cases  in  which  the  same 
might  have  been  maintained,  by  or  against  their  respective  testators. 

Derivation:     R.  S.,  Part  2,  ch.  6,  Tit.  5,  §  2. 

§    117.  Administrators     to     have     same     rights     and     liabilities     as 
executors. 

Administrators  shall  have  actions  to  demand  and  recover  the 
debts  due  to  their  intestate,  and  the  personal  property  and  effects 
of  their  intestate ;  and  shall  answer  and  be  accountable  to  others  to 
whom  the  intestate  was  holden  or  bound,  in  the  same  manner  as 

executors. 

Derivation:     R.  S.,  Part  2,  ch.  6,  Tit.  5,  §  3. 

§    118.  Actions  of  trespass  by  executors  and  administrators. 

Executors  and  administrators  shall  have  actions  of  trespass 
against  any  person  who  shall  have  wasted,  destroyed,  taken  or 
carried  away,  or  converted  to  his  own  use,  the  goods  of  their  tes- 
tator or  intestate  in  his  lifetime.  They  may  also  maintain  actions 
for  trespass  committed  on  the  real  estate  of  the  deceased,  in  his 

lifetime. 

Derivation:     R.  S.,  Part  2,  ch.  6,  Tit.  5,  §  4. 

S    119.  Actions   of   trespass    against   executors    and   administrators. 

Any  person,  or  his  personal  representatives,  shall  have  actions 
of  trespass  against  the  executor  or  administrator  of  any  testator 
or  intestate,  who  in  his  lifetime  shall  have  wasted,  destroyed,  taken 
or  carried  away,  or  converted  to  his  own  use,  the  goods  or  chattels 
of  any  such  person,  or  committed  any  trespass  on  the  real  estate  of 
any  such  person. 

Derivation:     R.  S.,  Part  2,  ch.  6,  Tit.  5,  §  5. 

§    12O.  Actions   for  wrongs,   by   or  against   executors  and   adminis- 
trators. 

For  wrongs  done  to  the  property,  rights  or  interests  of  another, 
for  which  an  action  might  be  maintained  against  the  wrong-doer, 
such  action  may  be  brought  by  the  person  injured,  or  after  his 
death,  by  his  executors  or  administrators,  against  such  wrong-doer, 
and  after  his  death  against  his  executors  or  administrators,  in  the 
same  manner  and  with  the  like  effect,  in  all  respects,  as  actions 
founded  upon  contracts.  This  section  shall  not  extend  to  an  action 


DECEDENT  ESTATE  LAW  635 

for  personal  injuries,  as  such  action  is  defined  in  section  thirty- 
three  hundred   and   forty-three   of  the   code   of  civil   procedure; 
except  that  nothing  herein  contained  shall  affect  the  right  of  action 
now  existing  to  recover  damages  for  injuries  resulting  in  death. 
Added  by  L.  1909,  ch.  240,  §  16.    In  effect  April  22,  1909. 

§    121.  Action  or  proceeding  by  executor  of  executor. 

An  executor  of  an  executor  shall  have  no  authority  to  commence 
or  maintain  any  action  or  proceeding  relating  to  the  estate,  effects 
or  rights  of  the  testator  of  the  first  executor,  or  to  take  any  charge 
or  control  thereof,  as  such  executor. 
Added  by  L.  1909,  ch.  240,  §  16.     In  effect  April  22,  1909. 

§    122.  Appraisal  of  estate  of  deceased  person. 

Whenever  by  reason  of  the  provisions  of  any  law  of  this  state  it 
shall  become  necessary  to  appraise  in  whole  or  in  part  the  estate 
of  any  deceased  person,  the  persons  whose  duty  it  shall  be  to  make 
such  appraisal  shall  value  the  real  estate  at  its  full  and  true  value, 
taking  into  consideration  actual  sales  of  neighboring  real  estate 
similarly  situated  during  the  year  immediately  preceding  the  date 
of  such  appraisal,  if  any;  and  they  shall  value  all  such  property, 
stocks,  bonds,  or  securities  as  are  custoramily  bought  or  sold  in  open 
markets  in  the  city  of  New  York  or  elsewhere,  for  the  day  on  which 
such  appraisal  or  report  may  be  required,  by  ascertaining  the  range 
of  the  market  and  the  average  of  prices  as  thus  found,  running 
through  a  reasonable  period  of  time. 

Derivation:  L.  1891,  ch.  34,  part  of  §  1.  For  remainder  of  section,  see 
General  Corporation  Law  and  Debtor  and  Creditor  Law.  Renumbered  by 
L.  1909,  ch.  240,  §  17. 


636  IXHTHITTANCE  TAXATION 


ARTICLE  5. 

LAWS  REPEALED  ;  WHEN  TO  TAKE  EFFECT. 

SECTION  130.  Laws  repealed. 

131.  When  to  take  effect. 

f    13O.  Laws   repealed. 

Of  the  laws  enumerated  in  the  schedule  hereto  annexed,  that  por- 
tion specified  in  the  last  column  is  hereby  repealed. 

8    131.  When   to   take  effect. 

This  chapter  shall  .take  effect  immediately. 

SCHEDULE  OF  LAWS  REPEALED. 

Revised  Statutes  ____   Part  2,  chapter  6,  title  1,  §§  1-5,  21,  22, 

40-53,  69-71 

Revised  Statutes  ____  .Part  2,  chapter  6,  title  4,  §§  55,  58 
Revised  Statutes  ____   Part  2,  chapter  6,  title  5,  §§  1-6,  23 
Revised  Statutes  ____   Part  3,  chajpter  7,  title  3,  §§  67-70 
*  Revised  Statutes  ____   Part  3,  chapter  8,  title  3,  §§  1,  2,  If, 

17,  18 


Laws  of 

Chapter 

Sect 

1787  

47  

.  .  All 

1799  

75  

.  .  All 

1801  

9  

..  All 

R.  L.  1813... 

23  

.  .  All 

R.  L.  1813... 

75  

..  All 

1815  

157  

.  .  All 

1821  

207  

.  .  All 

1828  

21  

...  1,1 

1828  

313  

..  All 

1829  

148  

..  All 

1835  

264  

.  .  All 

1837  

234  

..  All 

1840.  . 

348.. 

1 

meet.) 


*  Amended  by  L.  1909,  ch.  240,  §  93. 


DECEDENT  ESTATE  LAW  637 

Laws  of  Chapter  Section 

1848 319 Proviso  in  §  6. 

1860 360 All 

1865 368 Proviso  in  §  6. 

1867 782 3,4 

1869 22 All 

1873 397 Proviso  in  §  5. 

1875 267 Proviso  in  §  7. 

1875 343 Proviso  in  §  5. 

1876 118 All 

1883 65 All 

1886 236 Proviso  in  §  7. 

1887 315 Proviso  in  §  5. 

1887 317 Proviso  in  §  7. 

1890 286 Proviso  in  §  6. 

1891 34 1,  pt.  relating  to  estates  of  de- 
ceased persons. 

1893 100 All 

1896 547 280-296 

1897 417 9,  pt,  relating  to  executors,  ad- 
ministrators and  other  trustees 
of  estates  of  deceased  persons. 

1902 295 1,    pt.    amending   L.    1897,    Ch. 

417,  §  9,  as  to  executors,  ad- 
ministrators and  other  trustees 
of  estates  of  deceased  persons. 

1903 623 Pt.  amending  the  proviso  in  L. 

1848,  Ch.  319,  §  6. 

*1904 106 All 

1904 146 All 

1907 669 1,  pt.   amending   L.    1897,   Ch. 

417,  §  9,  as  to  executors,  ad- 
ministrators and  other  trustees 
of  estates  of  deceased  persons. 
Code  Civil  Procedure  §§  1843,  1859,  1868,  2611,  2628,  2633 ; 

§  2634,  to  and  including  words  "in  his  office";  §  2660,  words 

"  If    a    surviving   husband "    to    "  creditors    of   the    husband " ; 

§§  2694,  2703,  2704,  2732;  §  2733,  except  last  two  sentences; 

§  2734. 
*  Added  to  schedule  by  L.  1909,  ch.  240,  §  106. 


INDEX  TO  DECEDENT  ESTATE  LAW. 


(REFERENCE  is  MADE  TO  SECTIONS.) 

SECTTOlf. 

ACTIONS  : 

by  child  born   after   making  of  will    28 

by  subscribing  witness   28 

against  husband  for  debts  of  deceased  wife 103 

upon  contract  by  and  against  executors   116 

of  trespass  by  executors  and  administrators  118 

against  executors  and  administrators 119 

for  wrongs  by  or  against  executors  and  administrators 120 

or   proceedings  by  executor   of  executor 121 

ADMINISTRATORS:     See  Executors. 

investment  of  trust  funds  by Ill 

special  promise  to  answer  for  debt  of  intestate 113 

liability  of  administrators  of  executors  and  administrators 114 

de  bonis  non,  rights  of 115 

to  have  same  rights  and  liabilities  as  executors 117 

actions   of   trespass   by 118 

against 119 

actions  for  wrongs  by  or   against 120 

appraisal  of  estate  of  deceased  person 122 

ADVANCEMENTS  : 

of  real  and  personal   estates    96 

how  adjusted  97 

of  personal  estates 99 

ALIENS: 

devises  of  real  property  to 13 

alienism  of  ancestor , 95 

ANCESTORS:     See  Descent  of  Real  Property;  Distribution  of  Personal 
Property. 

APPRAISAL: 

of  estate  of  deceased  person 122 

ASSOCIATIONS: 

devise  or  bequest  to  benevolent,  17 

to  charitable 17 

to  literary 17 

to  scientific 17 

[flSO] 


640  INHERITANCE  TAXATION 

SECTION. 
ASSOCIATIONS. —  ( Continued ) . 

devise  or  bequest  to  religious 17 

to  missionary, 17 

BEQUEST: 

unwritten  wills  of  personal  property,  when  allowed 16 

to  certain  societies,  associations  and  corporations 17 

to  subscribing  witness 27 

to  child  or  descendant  or  to  brother  or  sister  not  to  lapse 29 

BROTHERS:      See   Descent   of   Real   Property;   Distribution   of   Personal 

Property. 

devise  or  bequest  to 29 

CANCELLATION  :     See  Revocation. 

CHILDREN  : 

born  after   making  of  will 26 

action  by   28 

devise  or  bequest  to 29 

revocation  of  will  by  marriage  and  birth  of  issue 35 

posthumous,  descent,  etc.,  of  property  to 93,  98 

advancements  to  96,  99 

illegitimate,  descent,  etc.,  of  property  to 89,  98 

distribution  of  personal  property  to 98 

COLLATERAL  RELATIVES:     See  Descent  of  Real  Property.;  Distribution  of 

Personal  Property. 
CONVEYANCE: 

bond  or  agreement  to  convey  property  devised  or  bequeathed  not 

a  revocation  of  devise  or  bequest 37 

conveyance  when  not  deemed  a  revocation  of  devise  or  bequest. .  39 

when  deemed  a  revocation 40 

CORPORATIONS  : 

devise  or  bequest  to  benevolent, 17 

to  charitable, 17 

to  literary, 17 

to  scientific, 17 

to  religious, 17 

to  missionary 17 

COUNTY  CLERK: 

record  of  will  in  office  of  42 

index  of  wills  in  office  of 43 

DEBTS: 

liability  of  heirs  and  devisees  for  debt  of  decedent 101 

of  heirs  and  devisees  not  affected  where  will  makes  specific 

provision  for  payment  of  debt 102 

of  husband  for  debts  of  deceased  wife 103 

of  executors   and   administrators   of  executors   and   adminis- 
trators   114 

special  promise  to  answer  for  debt  of  testator  or  intestate 113 


DECEDENT  ESTATE  LAW  641 

SECTION. 
DEFINITIONS: 

will    2 

codicil  2 

real  property   80 

inheritance   80 

living 80 

advancements  99 

DESCENDANTS:     See  Descent  of  Real  Property;  Distribution  of  Personal 

Property. 
DESCENT  OF  REAL  PROPERTY  : 

definitions  and  use  of  terms 80 

general  rule  of  81 

lineal  descendants  of  equal  degree   82 

of  unequal   degree    83 

inheritance  by  father 84 

mother 85 

collateral  relatives  86 

of  equal  degree   86 

brothers  and  sisters  and  their  descendants 87 

of  father  and  mother  and  their  descendants,  etc 88 

by  illegitimates 89 

relatives  of  the  half-blood 90 

of  husband  or  wife  91 

in  cases  not  otherwise  provided  for 92 

posthumous  children  and  relatives 93 

inheritance,  sole  or  in  common 94 

alienism  of  ancestor 95 

advancements  of  real  and  personal  estates  96 

educating  child,  etc.,  not   96 

how  adjusted 97 

DEVISE: 

who  may 10 

what  real  property  subject  to 11 

•who  may  take  real  property  by 12 

of  real  property  to  aliens 13 

to  certain   societies,  associations  and   corporations    

to  subscribing  witness    27 

to  child  or  descendant  or  to  brother  or  sister  not  to  lapse 29 

validity  of  purchase  not  withstanding  devise 46 

DEVISEE:      (See  Devise) 

liability  of,  for  debt  of  decedent 101 

not  effected  where  will  makes  specific  provision  for  payment 

of  debt 102 

DISTRIBUTION  OF  PERSONAL  PROPERTY: 

general   rule  of   98 

advancements  of  personal  estates 99 

estates   of   married   women    100 

liability  of  heirs  and  devisees  for  debt  of  decedent 101 

liability  of  heir  or  devisee  not  affected  where  will  makes  specific 

provision  for  payment  of  debt 102 

action  against  husband  for  debts  of  deceased  wife 103 

21 


642  INHERITANCE  TAXATION 

SECTION. 

EXECUTORS  : 

sales  of  real  estate  by,  under  authority  of  will 110 

investment  of  trust  funds  by Ill 

"  de  son   tort "   abolished 112 

special  promise  to  answer  for  debt  of  testator,  by 113 

liability  of  executors  of  executors  or  administrators 114 

actions  upon  contract  by  and  against 116 

actions  of  trespass  by US 

against   119 

actions  for  wrongs  by  or  against 120 

actions  or  proceedings  by  executor  of  executor 121 

appraisal  of  estate  of  deceased  person  by  122 

FATHER:     See  Descent   of  Real  Property;  Distribution   of  Personal 
Property. 

FOREIGN  WILLS: 

recording  will  found  in  another  state  or  foreign  country 44 

authentication  of,  for  use  in  this  state 45 

HALF-BLOOD  : 

descent  of  real  property  to  relatives  of 90 

distribution  of  personal  property  to  relatives  of 98 

HEIRS:     See  Descent  of  Real  Property;  Next  of  Kin. 

liability  of,  for  debts  of  decedent 101 

not  affected  where  will  makes  specific  provision  for  payment 

of  debts  102 

HUSBAND: 

article  three  not  to  affect  tenancy  by  courtesy 80 

descent  of  real  property  to  relatives  of  husband 91 

deceased,  when  next  of  kin  of  wife  deemed  next  of  kin  of 98 

rights  respecting  distribution  of  personal  property  of  wife 100 

debts  of  deceased  wife,  liability  for 103 

IIXEGITIMATE  CHILDREN:     See  Children. 
INCUMBRANCE: 

of  property  devised  or  bequeathed,  not  a  revocation  of  devise  of 

bequest  38 

INHERITANCE:     See  Descent  of  Real  Property;  Distribution  of  Personal 

Property. 

INTESTATE:     See  Administrators;  Descent  of  Real  Property;  Distribu- 
tion of  Personal  Property. 
INVESTMENT: 

of  trust  funds  by  executor  or  administrator  Ill 

MOTHER:     See   Descent   of  Real   Property;   Distribution   of   Personal 

Property. 

NEXT  OF  KIN:     See  Distribution  of  Personal  Property;  Heirs. 
PARENTS:     See  Descent   of  Real  Property;  Distribution  of  Personal 
Property. 

V 


DECEDENT  ESTATE  LAW  643 

SECTION. 
PERSONAL  PROPERTY: 

who  may  make  wills  of 15 

unwritten  wills  of,  when  allowed 16 

bequests  to  corporations,  associations,  societies,  etc 17 

bequest  to  subscribing  witness 27 

bequest  to  child  or  descendant  or  to  brother  or  sister  not  to  lapse ....  29 

bond  or  agreement  to  convey,  not  a  revocation  of  bequest 37 

advancements   of   personal   estates 96,  99 

distribution  of,  of  decedent 98 

appraisal  of,  of  decedent 122 

POSTHUMOUS  CHILDREN:     See  Children. 

PURCHASE  : 

Validity   of   purchase   notwithstanding   devise 46 

REAL  PROPERTY:     See  Descent  of  Real  Property. 

what  may  be  devised   11 

who  may  take  by  devise  12 

devises  of,  to  aliens  13 

wills  of,  how  construed    14 

sale  of,  by  executors  under  authority  of  will 110 

appraisal  of,  of  decedent 122 

RECORD: 

of  wills  in  County  Clerk's  office 42 

County  Clerk's  index  of  recorded  wills 43 

recording  will  found  in  another  state  or  foreign  country 44 

RESIDENCE: 

effect  of  change  of  residence  since  execution  of  will 24 

effect  of,  on  testamentary  dispositions 47 

REVOCATION  : 

of  written  wills  34 

by  marriage  and  birth  of  issue  . . . : 35 

of  will  of  unmarried  woman  36 

bond  or  agreement  to  convey  property  devised  or  bequeathed  not  a  37 

charge  or  Incumbrance  not  a   38 

conveyance,  when  not  to  be  deemed  a 39 

conveyance,    when    deemed   a 40 

of  second  will,  not  to  revive  first  41 

SALE: 

of  real  estate  by  executors  under  authority  of  will 110 

SISTERS:     See   Descent   of  Real   Property;   Distribution    of   Personal 
Property. 

devise  or  bequest  to 29 

SOCIETIES  : 

devise  or  bequest  to  certain  benevolent 17 

charitable 17 

scientific 17 

literary 17 

religious 17 

missionary 17 


644  INHERITANCE  TAXATION 

SECTION. 

SUBBOGATE:     See  Administrators;  Descent;  Distribution;  Executors; 
Testamentary  Trustees;  Wills. 

reception  of  wills  for  safe  keeping  by   30 

sealing  and  indorsing  wills  received  for  safe  keeping 31 

delivery  of  wills  received  for  safekeeping  by 32 

opening  of  wills  received  for  safe  keeping  by 33 

TESTA.MEWTABY  TBUSTEES:     See  Executors. 
TESTATOB:     See  Executors;  Wills. 
TRESPASS : 

actions  of,  by  executors  and  administrators 118 

actions  of,  against  executors  and  administrators 119 

TBUST  FUNDS: 

investment  of,  by  executor  or  administrator Ill 

WIFE: 

article  3  not  to  affect  dower 80 

descent  of  real  property  to  relatives  of  wife 91 

distribution  of  personal  property  to  widow 98 

when  next  of  kin  of  husband  deemed  next  of  kin  of  deceased  wife.  98 

estates  of  married  women 100 

liability  of  husband  for  debts  of  deceased  wife 103 

LS: 

who  may  devise 10 

what  real  property  may  be  devised  11 

who  may  take  real  property  by  devise   12 

devises  of  real  property  to  aliens 13 

of  real  estate,  how  construed    14 

of  personal  property,  who  may  make 15 

unwritten,  of  personal  property,  when  allowed 16 

devise  or  bequest  to  certain   corporations,  societies  and   associa- 
tions   17 

execution,   manner   of    21 

witnesses  to,  to  write  names  and  places  of  residence 22 

what  wills   may   be   proved    23 

change  of  residence  since  execution  of  will,  effect  of 24 

application  of  certain  provisions  to  wills  previously  made 25 

child  born  after  making  of  26 

devise    or    bequest    to    subscribing    witness 27 

action  by  child  born  after  making  of  will 28 

by  subscribing  witness 28 

devise  or  bequest  to  child  or  descendant  or  to  brother  or  sister  not 

to   lapse    29 

reception  of,  for  safe  keeping 30 

sealing  and  indorsing  wills  received  for  safe  keeping 31 

delivery  of  wills  received  for  safe  keeping 32 

opening  wills  received  by  surrogate  for  safe  keeping 33 

revocation  and  cancellation  of  written  wills 34 

revocation  of,  by  marriage  and  birth  of  issue 35 

will  of  unmarried  woman 36 

bond  or  agreement  to  convey  property  devised  or  bequeathed  not 

a  revocation 37 

change  or  incumbrance  not  a  revocation 3S 

conveyance,  when  not  to  be  deemed  a  revocation 39 


DECEDENT  ESTATE  LAW  645 

SECTION. 

conveyance,  when  to  be  deemed  a  revocation 40 

canceling  or  revocation  of  second  will  not  to  revive  first 41 

record  of,  in  County  Clerk's  office  42 

County  Clerk's  index  of  recorded  wills  43 

recording  will  found  in  another  state  or  foreign  country 44 

authentication  of  papers  from  another  state  or  foreign  country  for 

use   in   this   state 45 

validity  of  purchase  notwithstanding  devise 46 

validity  and  effect  of  testamentary  dispositions 47 

WITNESSES  : 

execution   of  wills  in  presence  of    21 

to  will,  to  write  names  and  places  of  residence  22 

devise  or  bequest  to  subscribing  witness 27 

action   by   subscribing   witness    28 

WOMEN: 

will  of  unmarried  woman 36 

estates   of  married   women 100 


THE  STATE  STATUTES 


ALABAMA. 

This   State   has   levied   no    inheritance   tax    since    1868. 
The  State  'Constitution,  section  21&,  prohibits  a  direct  inheritance  tax  and 
limits  any  collateral  inheritance  tax  to  two  and  one-half  per  cent. 

ALASKA. 
Levies  no  inheritance  taxes. 

ARIZONA. 
Taxes  all  property  of  nonresidents  within  the  state. 

TABLE  OF  GRADED  RATES. 


CLASSIFICATION-  OB  RELATION- 
SHIP 

Property  exempt 

Application  of  rates  to  value  of 
inheritance  or  bequest 

Grandparents,  parents,  husband, 
wife,  child,  brother,  sister,  wife  or 
widow  of  son,  husband  of  daughter 
adopted  or  mutually  acknowl- 
edged child,  or  any  lawful  lineal 
descendant. 

Where  whole  estate 
less  than  $10,000 
no  tax. 

1%  on  all  above  $5,000. 

Exempt  $5,000. 

Uncle,  aunt,  niece,  nephew  or  lineal 
descendant  of  the  same. 

Where  whole  estate 
valued  at  less 
than  $5,000  no 
tax.  Exemption 
$2,000. 

2%  on  all  above  $2,000. 

All  others. 

Exemption  $500. 

Up  to 
$10,000  in 
excess  of 
exemption 

$10,000 
to 
$20,000 

$20.000 
to 
$50,000 

All  in 
excess  of 
$50,000 

3% 

4% 

5% 

6% 

LAWS  OF  1912,  CHAPTER  15.  BECAME  A  LAW  JUNE  8,  1912. 

Section  1.  All  property  within  the  jurisdiction  of  the  state,  and  any  interest 
therein,  whether  belonging  to  the  inhabitants  of  this  state  or  not,  and  whether 
tangible  or  intangible,  which  shall  pass  by  will  or  by  statutes  of  inheritance 
of  this  or  any  other  state,  or  by  deed,  grant,  bargain,  sale,  or  gift,  made  in 
contemplation  of  the  death  of  the  grantor,  or  bargainer,  or  intended  to  take 
effect  in  possession  or  enjoyment  after  the  death  of  the  grantor,  bargainer, 
or  donor,  to  any  person  or  persons,  or  to  any  body,  or  bodies,  politic  or  cor- 
porate, in  trust  or  otherwise,  or  by  reason  whereof  any  person,  or  body  politic 
or  corporate,  shall  become  beneficially  entitled,  in  possession  or  expectation, 
to  any  property  or  income  thereof,  shall  be  and  is  subject  to  a  tax  at  the 
rate  hereinafter  specified  in  section  2  of  this  act,  to  be  paid  to  the  state 
treasurer  for  the  use  of  the  state;  and  all  heirs,  legatees,  and  devisees, 
administrators,  executors,  and  trustees,  and  any  such  grantee  under  a  convey- 
ance, and  any  such  donee  under  a  gift,  made  during  the  life  of  the  grantor 

[647] 


64:8  INHERITANCE  TAXATION 

or  donor,  shall  be  respectively  liable  for  any  and  all  such  taxes  with  interest 
thereon  until  the  same  shall  have  been  paid,  as  hereinafter  provided. 

§  2.  Establishes  the  rates  and  exemptions  as  shown  in  the  above  table. 

§  3.  Provides  that  taxes  shall  accrue  at  death,  are  payable  in  eight  months 
but  on  contingent  remainders  tax  suspended  until  they  fall  in. 

§  4.  Provides  that  executors  shall  deduct  tax  where  devise  or  inheritance 
is  in  money  or  collect  it  from  beneficiary  after  valuation  where  it  is  in  prop- 
erty and  shall  not  deliver  it  until  tax  is  paid. 

§  5.  Provides  that  the  tax  shall  be  paid  to  the  state  treasurer  who  must 
give  a  voucher  which  must  be  produced  on  final  accounting  unless  a  bond 
has  been  filed  as  provided  in  section  13. 

§  <6.  Every  tax  imposed  by  this  act  shall  be  a  lien  upon  the  'property 
embraced  in  any  inheritance,  devise,  bequest,  legacy,  or  gift,  until  paid,  and 
the  person  to  -whom  such  property  is  transferred,  and  the  administrators, 
executors,  and  trustees  of  every  estate  embracing  such  property  shall  be  per- 
sonally liable  for  such  tax  until  its  payment,  to  the  extent  of  the  value  of  such 
property;  and  provided,  further,  that  all  inheritance  taxes  shall  be  sued  for 
within  five  years  after  they  are  due  and  legally  demandable,  othewise  they 
shall  be  conclusively  presumed  to  be  paid  and  cease  to  be  a  lien  as  against 
the  estate,  or  any  part  thereof,  of  the  decedent. 

§  7.  If  such  tax  is  paid  within  eight  ( 8 )  months  from  the  accruing  thereof, 
a  discount  of  five  per  centum  (5%)  shall  be  allowed  and  deducted  therefrom. 
If  such  tax  is  not  paid  within  eight  (8)  months  from  the  accruing  thereof, 
interest  shall  be  charged  and  collected  thereon  at  the  rate  of  eight  per  centum 
( 8% )  per  annum  from  the  time  the  tax  is  due  and  payable  unless  by  reason 
of  claims  upon  the  estate,  necessary  litigation,  or  other  unavoidable  delay 
such  tax  cannot  be  determined  and  paid  as  herein  provided,  in  which  case 
interest  at  the  rate  of  six  per  centum  (6%)  per  annum  shall  be  charged  upon 
such  tax  from  the  time  from  the  accruing  thereof  until  the  cause  of  such 
delay  is  removed,  after  which  eight  per  centum  (8%,)  shall  be  charged.  In 
all  cases  whesn  a  bond  shall  be  given,  under  the  provisions  of  section  13  of 
this  act,  interest  shall  be  charged  at  the  rate  of  six  per  centum  (6%)  from 
the  accrual  of  the  tax  until  the  date  of  the  payment  thereof. 

§  8.  Gives  power  of  sale  to  pay  tax  in  same  manner  as  to  pay  debts. 

§  9.  Provides  that  where  a  legacy  is  made  a  charge  on  any  property  the 
heir  or  devisee  shall  deduct  the  tax  and  pay  it  and  the  tax  remains  a  lien  on 
the  property  so  charged  until  paid  and  payment  may  be  enforced  in  the  same 
manner  as  payment  of  the  legacy  or  by  county  attorney. 

§  10.  Provides  that  where  a  tax  has  been  erroneously  paid  it  shall  be 
refunded  if  the  application  is  made  within  three  years  of  the  payment. 

§  11.  If  a  foreign  executor,  administrator,  or  trustee  shall  assign  or  trans- 
fer any  stock  or  obligations  in  the  state  standing  in  the  name  of  the  decedent, 
or  in  trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the 
state  treasurer  on  or  before  the  transfer  thereof,  and  no  such  assignment  or 
transfer  shall  be  valid  unless  such  tax  is  paid. 

§  12.  No  safe  deposit  company,  trust  company,  bank,  corporation,  or  other 
institution,  person,  or  persons,  holding  securities  or  assets  of  a  decedent,  or 
corporation  in  which  said  decedent,  at  the  time  of  his  death,  owned  any  stock, 
shall  deliver  or  transfer  the  same  to  the  executors,  administrators,  or  legal 
representatives  of  -said  decedent,  or  upon  their  order  or  request,  unless  notice 
of  the  said  time  and  place  of  such  intended  transfer  be  served  upon  the  state 
treasurer  in  writing  at  least  five  days  prior  to  the  said  transfer ;  and  it  shall 
be  lawful  for  the  said  state  treasurer,  personally  or  by  representative,  to 
examine  said  securities  prior  to  the  time  of  such  delivery  or  transfer.  If 
upon  such  examination  the  state  treasurer,  or  his  said  representative,  shall, 
for  any  cause,  deem  it  advisable  that  such  securities  or  assets  should  not  be 
immediately  delivered  or  transferred,  he  may  forthwith  notify,  in  writing, 
such  company,  bank,  institution,  or  person,  to  defer  delivery  or  transfer 
thereof  for  a  period  not  to  exceed  ten  (10)  days  from  the  date  of  such  notice, 
and  thereupon  it  shall  be  the  duty  of  the  party  notified  to  defer  such  deliv- 
ery until  the  time  stated  in  such  notice,  or  until  the  revocation  thereof  within 
such  ten  (10)  days;  failure  to  serve  the  notice  first  above-mentioned  or  to 


THE  STATE  STATUTES  649 

allow  such  examination,  or  to  defer  the  delivery  of  such  securities  or  assets 
for  the  time  stated  in  the  second  of  said  notices,  shall  render  said  safe  deposit 
company,  trust  company,  corporation,  bank,  or  other  institution,  person  or 
persons,  liable  to  the  payment  of  the  tax  due  on  said  securities  or  assets, 
pursuant  to  the  provisions  of  this  act. 

f  13.  Any  person  or  corporation  beneficially  interested  in  any  property 
chargeable  with  a  tax  under  this  act,  and  executors,  administrators,  and  trus- 
tees, thereof,  may  elect,  within  six  (6)  months  from  the  death  of  the  decedent, 
not  to  pay  such  tax  until  the  person  or  persons  beneficially  interested  therein 
shall  come  into  actual  possession,  or  enjoyment  thereof.  If  it  be  personal 
property,  the  person  or  persons  so  electing  shall  give  a  bond  to  the  state  in 
the  penal  sum  of  three  times  the  amount  of  such  tax,  with  such  sureties  as  the 
superior  judge  of  the  proper  county  may  approve,  conditioned  upon  the  pay- 
ment of  such  tax  and  interest  thereon,  at  such  time  and  period  as  the  person 
or  persons  beneficially  interested  therein  may  come  into  actual  possession 
or  enjoyment  of  such  property,  which  bond  shall  be  executed  and  filed,  and  a 
full  return  of  such  property  upon  oath  made  to  the  superior  court  within  six 
(6)  months  from  the  date  of  transfer  thereof,  as  herein  provided,  and  such 
bond  must  be  renewed  every  five  years. 

§  14.  Provides  that  where  there  is  a  bequest  to  executors  in  lieu  of  com- 
missions the  amount  in  excess  of  a  reasonable  commission  is  taxable. 

§  15.  Gives  to  the  superior  court  having  jurisdiction  to  grant  letters 
testamentary  or  of  administration  jurisdiction  over  all  questions  arising 
under  the  statute. 

§  16.  Requires  the  judge  to  notify  the  state  treasurer  of  an  application  for 
letters  and  to  assess  the  tax.  The  state  treasurer  may  apply  for  letters  as  a 
creditor. 

$  17.  Requires  the  executor  or  administrator  within  one  month  of  his 
appointment  to  make  an  inventory  and  appraisal  and  file  it  with  the  clerk 
of  the  court. 

§  18.  Upon  application  the  court  may  extend  the  time  to  three  months. 

§  19.  Every  executor  or  administrator,  or  trustee  of  any  estate  subject  to 
the  tax  herein  provided,  shall,  at  least  ten  days  prior  to  the  first  appraise- 
ment thereof,  as  provided  by  law,  notify  the  state  treasurer  in  writing  of  the 
time  and  place  of  such  appraisement,  and  shall  file  due  proof  of  such  notice 
with  a  copy  thereof  with  the  clerk  of  the  court  having  jurisdiction  of  such 
estate  or  trust.  Every  executor,  administrator,  or  trustee,  within  ten  days 
after  such  appraisement,  or  appraisement  of  any  beneficial  interest  or  reap- 
praisement  thereof,  and  before  payment  and  distribution  to  the  legatees  or  any 
parties  entitled  to  beneficiary  interest  therein,  shall  make  and  render  to  the 
said  state  treasurer  a  copy  of  the  said  inventory  and  appraisement,  duly 
certified  as  such  by  the  clerk  of  the  court  having  jurisdiction  of  said  estate, 
and  shall  also  make  and  file  with  the  said  state  treasurer  a  schedule,  list,  or 
statement,  in  duplicate,  of  the  amount  of  such  legacy  or  distributive  share, 
together  with  the  amount  of  tax  which  has  accrued  or  will  accrue  thereon, 
verified  by  his  oath  or  affirmation,  to  be  administered  and  certified  thereon 
by  some  magistrate  or  officer  having  lawful  power  to  administer  such  oaths, 
in  such  form  and  manner  as  may  be  prescribed  by  the  state  treasurer,  which 
schedule,  list,  or  statement,  shall  contain  the  name  of  each  and  every  person 
entitled  to  any  beneficiary  interest  therein,  together  with  the  clear  value  of 
euch  interest  therein,  as  found  and  determined  by  the  court  having  jurisdic- 
tion of  said  estate.  One  of  said  schedules  shall  be  kept  and  retained  by  the 
etate  treasurer,  and  the  other  delivered  by  him  to  the  secretary  of  state. 

§  20.  Provides  that  the  court  may  accept  the  above  appraisement  or  order 
as  a  reappraisal,  wholly  or  in  part. 

§  21,  Provides  for  the  appointment  of  an  appraiser  in  such  case. 

§  22.  Every  inheritance,  devise,  bequest,  legacy,  or  gift,  upon  which  a  tax 
is  imposed  under  this  act,  shall  be  appraised  at  its  full  and  true  value  imme- 
diately upon  the  death  of  the  decedent,  or  as  soon  thereafter  as  may  be  prac- 
ticable; provided,  however,  that  when  such  devise,  bequest,  legacy,  or  gift, 
shall  be  of  such  a  nature  that  its  full  and  true  value  cannot  be  ascertained  at 


INHERITANCE  TAXATION 

such  time,  it  shall  be  appraised  in  like  manner  at  the  time  when  such  value 
first  becomes  ascertainable.  The  value  of  every  future  or  contingent  or  limited 
estate,  income,  interest,  or  annuity  dependent  upon  any  life  or  lives  in  being, 
shall  be  determined  by  tlie  rules  or  standard  of  mortality,  and  of  value  com- 
monly used  by  actuaries'  combined  experience  tables,  except  that  the  rates 
of  interest  cu  computing  the  present  value  of  all  future  and  contingent 
interest  or  estate  shall  be  four  per  centum  (4%,)  per  annum. 

§  23.  Provides  for  proceedings  before  the  appraiser  and  notice  to  the 
parties  interested. 

§  24.  Requires  the  court  to  fix  the  tax  on  the  appraiser's  report  or  that  it 
may  value  the  property  and  fix  the  tax  without  an  appraiser. 

§  25.  Requires  the  court  to  give  notice  by  mail  to  all  parties  interested 
of  the  valuation  and  assessment. 

§  26.  Provide  for  filing  objections  to  the  assessment,  rehearing,  affirmance 
or  reappraisal  and  appeal  by  any  party  in  interest  to  the  supreme  court. 

§  27.  Provides  for  the  collection  of  delinquent  taxes  by  the  county  attorney 
on  motion  of  the  state  treasurer. 

§  28.  Provides  that  the  secretary  of  state  shall  furnish  books  and  forms 
and  for  the  compilation  of  data  regarding  decedent's  estate  by  the  court 
clerks. 

§  29.  Provides  for  quarterly  reports  by  the  judges  of  the  superior  court 
and  the  county  recorders. 

§  30.  Requires  the  state  treasurer  to  furnish  copies  of  transfer  tax  receipts 
on  payment  of  a  fee  of  twenty-five  cents. 

§  31.  Makes  a  similar  provision  in  regard  to  county  recorder's  receipts. 

§  32.  Whenever  an  estate  charged,  or  sought  to  be  charged,  with  the  inherit- 
ance tax,  is  of  such  a  nature  or  is  so  disposed  that  the  liability  of  the  estate  is 
doubtful,  or  the  value  thereof  cannot  with  reasonable  certainty  be  ascer- 
tained under  the  provisions  of  law,  the  state  treasurer  may,  with  the  written 
approval  of  the  attorney-general,  which  approval  shall  set  forth  the  reasons 
therefor,  compromise  with  the  beneficiaries  or  representatives  of  such  estates, 
and  compound  the  tax  thereon ;  but  said  settlement  must  be  approved  by  the 
superior  court  having  jurisdiction  of  the  estate,  and  after  such  approval 
the  payment  of  the  amount  of  the  taxes  so  agreed  upon  shall  discharge  the 
lien  against  the  property  of  the  estate. 

§  33.  Requires  executors,  administrators  and  trustees  to  send  certified 
copies  of  their  reports  to  the  state  treasurer. 

§  34,  Provides  for  appeals  in  transfer  tax  proceedings  in  the  same  manner 
that  other  appeals  are  taken  from  the  superior  court. 

§  35.  Imposes  a  fine  of  $500  for  willfully  secreting  a  last  will  of  a  decedent. 

§  36.  Provides  a  similar  fine  for  administering  the  estate  of  decedent  with- 
out proving  the  will  or  taking  out  letters  of  administration  within  six  months. 

§  37.  Requires  administrators  or  executors  to  notify  the  state  treasurer 
when  any  real  estate  of  a  decedent  passes  to  any  body  politic  or  corporate 
directly  or  in  trust. 

§  38.  Except  as  to  real  property  located  outside  qf  the  state  passing  in  fee 
from  the  decedent  owner,  the  tax  imposed  under  section  2  shall  hereafter  be 
assessed  against  and  be  collected  from  property  of  every  kind,  which,  at  the 
death  of  the  decedent  owner,  is  subject  to,  or  thereafter,  for  the  purpose  of 
distribution,  is  brought  into  this  state  and  becomes  subject  to  the  jurisdic- 
tion of  the  courts  of  this  state  for  distributive  purposes,  or  which  was  owned 
by  any  decedent  domiciled  within  the  state  at  the  time  of  the  death  of  such 
decedent,  even  though  the  property  of  said  decedent  so  domiciled  was  situated 
outside  of  the  state. 

§  39.  In  case  of  any  property  belonging  to  a  foreign  estate,  which  estate  in 
whole  or  in/  part  is  liable  to  pay  an  inheritance  tax  in  this  state,  the  said  tax 
shall  be  assessed  upon  the  market  value  of  said  property  remaining  after  the 
payment  of  such  debts  and  expenses  as  are  chargeable  to  the  property  under 
the  laws  of  this  state.  In  the  event  that  the  executor,  administrator,  or 
trustee,  of  such  foreign  estates  files  with  the  clerk  of  the  court  having 
ancillary  jurisdiction,  and  with  the  state  treasurer,  duly  certified  statements 
exhibiting  the  true  market  value  of  the  entire  estate  of  the  decedent  owner, 


THE  STATE  STATUTES  651 

and  the  indebtedness  for  which  the  said  estate  has  been  adjudged  liable, 
which  statements  shall  be  duly  attested  by  the  judge  of  the  court  having 
original  jurisdiction,  the  beneficiaries  of  said  estate  shall  then  be  entitled  to 
have  deducted  such  proportion  of  the  said  indebtedness  of  the  decedent  from 
the  value  of  the  property  as  the  value  of  the  property  within  this  state  bears 
to  the  value  of  the  entire  estate. 

§  40.  Prohibts  additional  compensation  to  any  officer  by  reason  of  any 
additional  duties  imposed  by  the  act. 

§.  41.  Provides  for  refund  to  state  treasurer  of  any  expenses  incurred  in 
enforcing  the  tax. 

§  4£.  Provides  fine  and  imprisonment  against  an  appraiser  accepting  a  fee 
or  reward  from  executors,  heirs  or  devisees. 

§  43.  All  acts  and  parts  of  acts  in  conflict  herewith  are  hereby  repealed. 

Prior  Statutes. — No  inheritance  tax  prior  to  1912. 


652 


INHEBITANCE  TAXATION 


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THE  STATE  STATUTES  653 

w. 

Chapter  197,  L.  1913,  as  amended  by  L.  1915,  approved  March  23,  1915,  and  L.  1917. 

Section  1.  (1)  The  words  "estate"  and  "property"  as  used  in  this  act, 
shall  be  taken  to  mean  the  property  or  interest  therein,  passing  or  trans- 
ferring to  any  individual  or  corporate  legatees,  devisees,  heirs,  next  of  kin, 
grantees,  donees  or  vendees,  including  the  widow's  dower,  or  any  property  in 
any  way  granted,  given  or  devised  to  the  widow  in  lieu  of  dower,  and  the 
husband's  courtesy,  or  any  gift,  grant  or  bequest  by  the  wife  to  the  husband, 
and  not  as  the  property  or  interest  therein  of  the  decedent,  donor  or  vendor, 
and  shall  include  all  property  or  interest  therein,  whether  situated  within 
or  without  the  state.  Provided,  five  thousand  ($5,000.00)  dollars  of  the 
market  value  of  the  widow's  dower  or  the  husband's  courtesy  shall  be  exempt 
from  taxation.  [As  amended  by  L.  1917.'] 

(2)  The  words  "tangible  property"  as  used  in  this  act  shall  be  taken  to 
mean  corporeal  property,  such  as  real  estate  and  goods,  wares  and  merchandise, 
and  shall  not  be  taken  to  mean  money,  deposits  in  banks,  shares  of  stock, 
bonds,  notes,  credits  or  evidences  of  an  interest  in  property  or  evidences  of 
debt. 

( 3)  The  words  "  intangible  property  "  as  used  in  this  act  shall  be  taken  to 
mean  incorporeal  property,  including  money,  deposits  in  bank,  shares  of  stock, 
bonds,  notes,  credits,  evidences  or  an  interest  in  property  and  evidences  of 
debt. 

(4)  The  word  "  transfer  "  as  used  in  this.act  shall  be  taken  to  include  the 
passing  of  property  or  any  interest  therein  in  possession  or  enjoyment,  present 
or  future,  by  inheritance,  descent,  devise,  bequest,  grant,  deed,  bargain,  sale 
«r  gift  in  the  manner  herein  prescribed. 

§  2.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  tangible 
property  within  the  state  and  of  intangible  property  or  any  interest  therein 
or  income  therefrom  in  trust  or  otherwise,  to  persons  or  corporations  in  the 
following  cases,  subject  to  the  exceptions  and  limitations  hereinafter 
prescribed. 

( 1 )  When  a.  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  of 
any  intangible  property  or  of  tangible  property  within  the  state  from  any 
person  dying  seized  or  possessed  thereof  while  a  resident  of  the  state. 

(2)  When  the  transfer  is  by  will  or  by  the  interstate  laws  of  this  state 
of  tangible  property  within  the  state,  or  intangible  property  consisting  of 
shares  of  stock  or  of  bonds  of  corporations  organized  and  existing  under  the 
laws  of  Arkansas;    or  if  intangible  property,  consisting  of  shares  of  stock 
or  of  bonds  of   foreign  corporations  owning  property  within  the  state  of 
Arkansas,  and  the  decedent  was  a  nonresident  of  the  state  at  the  time  of  his 
death;  provided,  that  in  the  case  of  stocks  or  bonds  held  by  a  nonresident 
decedent  in  a  foreign  corporation,  owning  property  within  this  state,  the 
value  of  such  stock  for  the  pTirposes  of  this  act  shall  be  taken  to  be  that 
proportion  of  its  true  value,  which  the  physical  property  of  such  corporation 
located  in  this  state  bears  to  the  total  physical  property  of  such  corporation 
wherever  located. 

(3)  When  the  transfer  is  of  intangible  property  or  of  tangible  property 
within  the  state  made  by  a  resident,  or  of  tangible  property  within  the  state 
made  by  a  nonresident,  by  deed,  grant,  bargain,  sale  or  gift  made  in  con- 
templation of  the  death  of  the  grantor,  vendor  or  donor,  or  intended  to  take 
effect  in  possession  or  enjoyment  at  or  after  such  death. 

(4)  When  any  such  person  or  corporation  becomes  beneficially  entitled,  im 
possession  or  expectancy,  to  any  property  or  the  income  thereof  of  any  such, 
transfer. 

(5)  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appoint- 
ment derived  from  any  disposition  of  property  made  either  before  or  after  the 
passage  of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  act. 

(6)  The  tax  imposed  hereby  shall  be  upon  the  clear  market  value  of  such 
property,  and  shall  be  and  remain  a  lien  upon  the  property  transferred  until 
paid. 

§  3.  The  following  exemptions  from  the  tax  are  hereby  allowed: 
( 1 )    All  property  transferred  in  good  faith  to  societies,  corporations  and 
institutions  now  or  hereafter  exempted  by  law  from  taxes,  or  to  any  public 


654  INHERITANCE  TAXATION 

corporation  or  to  any  society,  corporation,  institution  or  association  of  per- 
sons engaged  in  or  devoted  to  any  charitable,  benevolent,  educational,  public 
or  other  like  work  (pecuniary  profit  not  being  its  object  or  purpose)  or  to 
any  person,  society,  corporation,  institution  or  association  of  persons  in  trust 
for  or  to  be  devoted  to  any  charitable,  benevolent,  educational  or  public  pur- 
pose, by  reason  whereof  any  such  person  or  corporation  shall  become  bene- 
ficially entitled  in  possession  or  expectancy  to  any  such  property  or  to  the 
income  thereof,  shall  be  exempt. 

(2)  Property  of   the   clear  value   of   three  thousand   dollars    ($3,000.00) 
transferred  to  a  widow  or  to  a  minor  child  of  the  decedent,  and  of  one  thou- 
sand dollars  ($1,000.00)   transferred  to  each  of  the  persons  described  in  the 
first  subdivision  of  section  4,  shall  be  exempt. 

(3)  Property  of  the  clear  value  of  five  hundred  dollars    ($500.00)    trans- 
ferred to  any  person  or  corporation  other  than  the  persons  described  in  said 
first  subdivision  of  section  4. 

(4)  Provided,  that  when   any  estate   on  which  the  tax  is   due  is  large 
enough  to  pay  the  tax  in  full  and  leave  a  sum  equal  to  or  greater  than  the 
exemptions  provided  in  subdivisions  No.  2  and  No.  3  of  this  section,  the  tax 
shall  be  paid  on  the  value  of  the  entire  estate  without  deductions  of  the 
exemptions  provided  by  subdivisions  No.  2  and  No.  3,  or  any  other  deduction 
or  abatement  whatever. 

Sections  4  and  5  fix  the  rates  as  shown  in  the  foregoing  table. 

§  6.  This  act  shall  apply  to  all  transfers  from  the  estates  of  decedents 
whose  death  occurs  subsequent  to  the  date  when  this  act  takes  effect,  and 
not  to  transfers  from  estates  when  the  decedent  died  prior  to  the  taking 
effect  of  this  act,  except  as  provided  ia  subdivision  5  of  section  2. 

§  7.  When  any  grant,  gift,  legacy  or  succession  upon  which  a  tax  is 
imposed  by  section  2  of  this  act  shall  be  an  estate,  income  or  interest  for  a 
term  of  years,  or  for  life,  or  determinable  upon  any  future  or  contingent  event, 
or  shall  be  a  remainder,  reversion  or  other  expectancy,  real  or  personal,  the 
entire  property  or  fund  by  which  such  estate,  income  or  interest  is  supported, 
or  of  which  it  is  a  part,  shall  be  appraised  immediately  after  the  death  of 
the  decedent  and  the  market  value  thereof  determined,  in  the  manner  pro- 
vided in  section  13  of  this  act,  and  the  tax  prescribed  by  this  act  shall  be 
immediately  due  and  payable  to  the  state  treasurer,  and,  together  with  the 
-interest  thereon,  shall  be  and  remain  a  lien  on  said  property  until  the  same 
is  paid. 

§  8.  Taxes  excess  over  reasonable  compensation  of  devise  to  executors  or 
trustees  in  lieu  of  commissions. 

§  9.  Provides  that  taxes  are  due  at  death.  No  interest  until  after  six 
months.  After  twelve  months  a  10  per  cent,  penalty  in  addition  to  the  inter- 
est except  in  case  of  necessary  litigation  or  unavoidable  delay  but  litigation 
to  defeat  the  tax  is  not  "  necessary  litigation." 

§  10.  ( 1 )  Any  administrator,  executor  or  trustee  having  in  charge  or  trust 
any  legacy  or  property  for  distribution,  subject  to  the  said  tax,  shall  deduct 
the  tax  therefrom,  or  if  the  legacy  or  property  be  not  money  he  shall  collect 
the  tax  thereon,  upon  the  market  value  thereof,  from  the  legatee  or  person 
entitled  to  such  property,  and  he  shall  not  deliver,  or  be  compelled  to  deliver, 
any  specific  legacy  or  property  subject  to  tax  to  any  person  until  he  shall 
have  collected  the  tax  thereon ;  and  whenever  any  such  legacy  shall  be  charged 
upon  or  payable  out  of  real  estate,  the  executor,  administrator  or  trustee 
shall  collect  said  tax  from  the  heir  or  devisee  thereof,  and  the  same  shall 
remain  a  charge  on  such  real  estate  until  paid;  if,  however,  such  legacy  be 
given  in  money  to  any  person  for  a  limited  period,  the  executor,  administrator 
or  trustee  shall  retain  the  tax  upon  the  whole  amount;  but  if  it  be  not  in 
money  he  shall  make  application  to  the  probate  court  to  make  an  apportion- 
ment, if  the  case  require  it,  of  the  sum  to  be  paid  into  his  hands  by  such 
legatees  and  for  such  further  order  relative  thereto  as  the  case  may  require. 

(2)  And  all  executors,  administrators  and  trustees  shall  have  full  power 
to  sell  so  much  of  the  property  of  the  decedent  as  will  enable  them  to  pay 
said  tax,  such  sale  to  be  had  in  the  same  manner  as  provided  by  statute  for 


THE  STATE  STATUTES  655 

the  sale  of  lands  of  decedents  to  pay  debts  of  the  estate,  and  the  amount  of 
said  tax  shall  be  paid  as  hereinafter  directed. 

§  11.  Provides  that  foreign  executors  or  administrators  shall  not  transfer 
assets  within  the  state  without  paying  the  tax  and  that  trust  companies, 
safe  deposit  companies,  banks,  etc.,  shall  Hot  deliver  securities  of  a  decedent 
in  their  possession  to  an  executor  or  administrator  without  retaining  enough 
to  pay  the  tax,  interest  and  penalties  unless  the  state  treasurer  shall  consent 
in  writing  under  a  penalty  of  twice  the  tax  and  interest  and  gives  the  state 
treasurer  the  right  to  examine  said  securities. 

§   12.  Provides  that  taxes  shall  be  paid  to  general  fund. 

§  13.  Provides  for  the  appointment  of  appraisers,  notice  to  beneficiaries  to 
fix  the  market  value  of  property  and  compute  like  estates,  remainders,  annui- 
ties, etc.,  fixes  appraiser's  compensation  and  imposes  a  penalty  for  accepting 
fee  or  reward. 

§  14.  Gives  the  probate  court  jurisdiction  in  inheritance  tax  cases. 

§  15.  Provides  for  collection  of  delinquent  taxes  by  the  attorney-general 
who  may  employ  counsel.  [Repealed  by  L.  1917.J] 

§   16.  Provides  for  the  enforcement  of  tax  liens  by  the  attorney-general. 

§  17.  Provides  for  actions  to  quiet  title  and  to  declare  that  property  is 
not  subject  to  the  lien  of  any  tax  under  this  or  any  former  act. 

§  18.  Provides  that  actions  under  sections  16  and  17  shall  be  commenced  in 
the  probate  court. 

§  19.  An  act,  entitled  "An  act  to  impose  a  tax  based  upon  the  right  of  suc- 
cession to  gifts,  legacies  and  inheritances  in  certain  cases,  and  to  provide  for 
the  collection  of  such  taxes,"  approved  May  31,  1909,  and  all  acts  and  parts 
of  acts  in  conflict  with  this  act  are  hereby  expressly  repealed ;  provided, 
nothing  in  this  act  shall  be  construed  to  affect  or  prevent  the  collection  of 
any  inheritance  tax  which  may  have  become  due  and  payable,  and  has  not  yet 
been  paid  under  the  laws  in  force  prior  to  the  passage  of  this  act. 

§  20.  Whereas,  it  is  necessary  for  the  immediate  preservation  of  the  pub- 
lic peace,  health  and  safety  that  this  act  becomes  a  law  immediately;  there- 
fore, be  it  enacted  that  this  act  take  effect  and  be  in  force  from  and  after  its 
passage. 

The  Act  of  1917  adds  the  following  procedure  provisions: 

§  3.  There  is  hereby  created  for  a  term  of  twelve  ( 12)  years  an  office  to 
be  known  as  the  inheritance  tax  attorney,  for  the  state  of  Arkansas,  and  the 
governor,  with  the  advice  and  consent  of  the  Senate  shall  appoint  some  per- 
son learned  in  the  law,  who  shall  be  inheritance  tax  attorney  for  the  state, 
for  a  term  of  two  years,  and  who  shall  take  and  subscribe  to  the  oath  of 
office  prescribed  by  the  constitution  of  this  state  for  officers.  The  inherit- 
ance tax  attorney  shall  have  the  power  to  file  complaint  in  the  name  of  the 
state  in  the  probate  court  of  any  county  having  jurisdiction  of  the  estate, 
from  which  any  taxes  under  this  act  may  be  due  or  owing,  against  the 
administrator,  or  executor  of  such  estate,  or  against  the  heirs,  legatees, 
beneficiaries  or  other  persons  having  or  claiming  to  have  any  interest  in 
said  estate,  if  there  is  no  administrator  or  executor,  alleging  that  the  inherit- 
ance tax  is  due  and  unpaid,  or  that  the  value  of  said  estate  upon  which 
the  inheritance  tax  is  owing,  is  unknown.  Upon  filing  of  the  complaint,  a 
summons  shall  be  issued  and  served  upon  the  defendants  and  the  case  shall 
stand  for  trial  at  the  next  regular  or  adjourned  term  of  the  court;  pro- 
vided the  term  shall  not  begin  within  ten  days  from  the  service  of  the  sum- 
mons. The  case  shall  be  tried  before  the  probate  judge  without  a  jury, 
upon  oral  testimony  or  depositions,  and  he  shall  render  judgment  in  favor  of 
the  state  for  whatever  sum  he  may  find  is  due  by  said  estate  as  inheritance 
taxes.  An  appeal  may  be  taken  from  the  judgment  of  the  probate  court  to 
the  circuit  court  for  the  plaintiff,  without  bond,  by  the  inheritance  tax  attor- 
ney filing  bis  motion  and  prayer  therefor,  either  in  the  probate  court  or 
with  the  clerk  of  the  circuit  court.  The  defendants,  or  any  of  them,  may 
appeal  to  the  circuit  court  in  the  same  manner  as  appeals  are  now  taken, 
or  may  hereafter  be  taken,  from  the  probate  court. 

§  4.  The  inheritance  tax  attorney  may  examine  under  oath  in  the  pro- 
ceeding provided  for  in  section  2  of  this  act,  the  administrator,  executor, 


666  INHERITANCE  TAXATION 

heirs,  legatees,  beneficiaries  or  other  person  having,  or  claiming  to  have  any 
interest  in  the  estate,  or  any  other  person  having  any  knowledge  of  the 
property  of  the  estate  or  its  value.  When  it  has  been  determined  how  much 
tax  is  due  under  this  act,  the  inheritance  tax  attorney  shall  certify  the 
amount  thereof  to  the  state  treasurer,  and  all  taxes  shall  be  paid  direct  to 
the  treasurer  of  the  state. 

§  5.  The  inheritance  tax  attorney  shall  devote  his  entire  time  to  the 
discharge  of  the  duties  of  his  office  and  shall  not  engaged  in  any  occupation 
or  business  interfering  or  inconsistent  with  the  duties  of  his  office.  He  shall 
receive  as  his  salary  the  sum  of  three  thousand  dollars  ($3,000.00)  per 
annum,  payable  as  other  salaries  are  paid;  and  in  addition  thereto,  his 
necessary  traveling  expenses,  which  shall  be  itemized,  verified  and  filed  with 
the  auditor  of  state  each  month,  and  when  so  filed,  the  auditor  shall  draw 
his  warrant,  separate  from  any  salary  warrant,  from  the  amount  of  his 
traveling  expenses,  which  shall  be  deducted  from  any  taxes  collected  under 
this  act  before  the  same  is  credited  to  the  general  revenue  fund. 

§  6.  The  inheritance  tax  attorney  shall  be  provided  with  suitable  and 
necessary  offices,  furniture,  supplies  and  stationery,  and  shall  also  be  allowed 
one  stenographer  who  shall  be  paid  a  salary  not  to  exceed  seventy-five  dol- 
lars ($75.00)  per  month,  to  be  paid  by  the  state  as  other  salaries  are  paid. 

§  7.  If  any  non-resident  of  this  state  shall  die  leaving  any  property  in  this 
state  subject  to  taxation  under  this  act,  the  probate  court  of  any  county 
wherein  any  of  such  decedent's  property  is  situated,  shall,  on  petition  of 
inheritance  tax  attorney,  appoint  some  suitable  person  administrator  of  the 
estate  of  such  decedent,  or  rquire  the  public  administrator  to  take  charge  or' 
such  property  until  the  amount  of  inheritance  tax  owing  under  this  act  is 
determined  and  paid. 

§  8.  The  probate  judge  shall  not  approve  the  settlement  of  any  adminis- 
trator or  executor  until  the  inheritance  taxes  due  under  the  inheritance  tax 
laws  is  paid. 

§  9.  Any  action  provided  for  by  the  inheritance  tax  laws  of  this  state 
may  be  brought  at  any  time  before  the  estate  is  fully  administered. 

§  10.  Section  15  of  Act  No.  197  of  the  Acts  of  1913  and  all  laws  and  parts 
of  laws  in  conflict  herewith  are  hereby  repealed,  and  this  act  being  necessary 
for  the  immediate  preservation  of  the  public  peace,  health  and  safety  an 
emergency  is  hereby  declared  to  exist,  and  this  act  shall  be  in  force  and  effect 
from  and  after  its  passage. 

Prior  Statutes:  L.  1901,  Act  156,  p.  295;  L.  1903,  Act  89.  p.  153;  L.  1907,  Act  345,  p.  852.;  L. 
1909,  Act  303,  p.  904. 


THE  STATE  STATUTES 


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INHERITANCE  TAXATION 

California  has  adopted  an  entirely  new  statute.  Approved  May  23,  1917, 
but  it  does  not  change  the  rates  established  in  1915  and  shown,  in  the  fore- 
going table. 

The  new  statute  is  in  full  as  follows: 

CHAPTER  589. 

An  Act  to  establish  a  tax  on  gifts,  legacies,  inheritances,  bequests,  devises, 
successions  and  transfers,  to  provide  for  its  collection  and  to  direct  the 
disposition  of  its  proceeds;  to  provide  for  the  enforcement  of  liens 
created  by  this  act  and  by  any  act  hereby  repealed  and  for  suits  to  quiet 
title  against  claims  of  liens  arising  hereunder,  or  under  an  act  hereby 
repealed,  to  be  known  as  the  "inheritance  tax  act";  and  to  repeal 
chapter  five  hundred  ninety-five  of  the  laws  of  the  session  of  the  legis- 
lature of  California  of  1913,  approved  June  16,  1913,  known  as  the 
"inheritance  tax  act,"  and  all  amendments  thereto,  and  to  repeal  all 
acts  and  parts  of  acts  in  conflict  with  this  act. 
In  effect  July  27,  1917. 

The  people  of  the  State  of  California  do  enact  as  follows- 
SECTION  1.   (1)   This  act  shall  be  known  as  the  "  inheritance  tax  act." 

(2)  The  words  "  estate "  and  "  property  "  as  used  in  this  act  shall  be  taken 
to  mean  the  real  and  personal  property  or  interest  therein  of  the  testator, 
intestate,  grantor,   bargainer,  vendor,   or  donor  passing  or  transferred  to 
individual  legatees,  devisees,  heir,  next  of  kin,  grantees,  donees,  vendees,  or 
successors,  and  shall  include  all  personal  property  within  or  without  the  state ; 
provided,  that  for  the  purpose  of  this  act  the  one-half  of  the  community  prop- 
erty which  goes  to  the  surviving  wife,  on  the  death  of  the  husband,  under  the 
provisions  of  section  one  thousand  four  hundred  two  of  the  civil  code,  shall 
not  be  deemed  to  pass  to  her  as  heir  to  her  husband,  but  shall,  for  the  pur- 
pose of  this-  act,  be  deemed  to  go,  pass,  or  be  transferred  to  her  for  valuable 
and  adequate  consideration  and  her  said  one-half  of  the  community  shall  not 
be  subject  to  the  provisions  of  this  act;    provided,  further,  that  in  case  of  a 
transfer  of  community  property  from  the  husband  to  the  wife,  within  the 
meaning  of  subdivision  (3)  or  (5)  of  section  two  of  this  act,  one-half  of  the 
community  property  so  transferred  shall  not  be  subject  to  the  provisions  of 
this  act ;  and  provided,  further,  that  the  presumption  that  property  acquired 
by  either  husband  or  wife  after  marriage  is  community  property,  shall  not 
obtain  for  the  purpose  of  this  act  as  against  any  claim  by  the  state  for  the 
tax  hereby  imposed;  but  the  burden  of  proving  such  property  to  be  community 
property  shall  rest  upon  the  person  claiming  the  same  to  be  community 
property. 

( 3 )  The  word  "  transfer  "  as  used  in  this  act  shall  be  taken  to  include  the 
passing   of  property   or  any   interest  therein,   in   possession  or   enjoyment, 
present  or  future,  by  inheritance,  descent,  devise,  succession,  bequest,  grant, 
deed,  bargain,  sale,  gift,  or  appointment  in  the  manner  herein  described. 

(4)  The  word  "decedent"  as  used  in  this  act  shall  include  the  testator, 
intestate,  grantor,  bargainer,  vendor,  or  donor. 

(5)  The  words  "county  treasurer"  and  "inheritance  tax  appraiser,"  as 
used  in  this  act,  shall  be  taken  4o  mean  the  ireasurer  or  the  inheritance  tax 
appraiser  of  the  county  of  the  superior  court  having  jurisdiction  as  pro- 
vided in  section  fifteen  of  this  act. 

§  2.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  prop- 
erty, real,  personal  or  mixed,  or  of  any  interest  therein  or  income  therefrom 
in  trust  or  otherwise,  to  persons,  institutions  or  corporations,  not  herein- 
after exempted,  to  be  paid  to  the  treasurer  of  the  proper  county,  as  herein- 
after directed,  for  the  use  of  the  state,  said  taxes  to  be  upon  the  market  value 
of  such  property  at  the  rates  hereinafter  prescribed  and  only  upon  the  excess 
over  the  exemptiona,  hereinafter  granted,  in  the  following  cases: 

(1)  When  the  transfer  is  by  will  or  by  the  intestate  or  homestead  laws 
of  this  state,  from  any  person  dying  seized  or  possessed  of  the  property  while 
a  resident  of  the  state,  or  by  any  order  of  court  setting  apart  property  pur- 
suant to  article  one,  chapter  five,  title  eleven,  part  three  of  the  Code  of  Civil 
Procedure. 


THE  STATE  .STATUTES  661 

(2)  When  the  transfer  is  by  will  or  intestate  laws  of  property  within  this 
state  and~the  decedent  was  a  nonresident  of  the  state  at  the  tinje  of  Ms 
death,  or  by  any  order  of  court  setting  apart  property  pursuant  to  article 
one,  chapter  five,  title  eleven,  part  three  of  the  Code  of  Civil  Procedure. 

(3)  "When  the  transfer  is  of  property  made  by  a  resident,  or  by  a  non- 
resident when   such  non-resident's  property  is  within  this  state,   by  deed, 
grant,  bargain,  sale,  assignment  or  gift,  made  without  valuable  and  adequate 
consideration  ( i.  e.,  a  consideration  equal  in  money  or  in  money's  worth  to  the 
full  value  of  the  property  transferred )  : 

(a)  In  contemplation  of  the  death  of  the  grantor,  vendor,  assignor  or 
donor,  or, 

(h)|  Intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such 
death. 

When  such  person,  institution  or  corporation  becomes  beneficially  entitled  in 
possession  or  expectancy  to  any  property  or  the  income  therefrom,  by  any 
such  transfer,  whether  made  before  or  after  the  passage  of  this  act. 

(4)  The  words  "contemplation  of  death,"  as  used  in  this  act,  shall  be 
taken  to  include  that  expectancy  of  death  which  actuates  the  mind  of  a  per- 
son on  the  execution  of  his  will,  and  in  nowise  shall  said  words  be  limited 
and  restricted  to  that  expectancy  of  death  which  actuates  the  mind  of  a  per- 
son making  a  gift  causa  mortis;   and  it  is  hereby  declared  to  be  the  intent 
and  purpose  of  this  act  to  tax  any  and  all  transfers  which  are  made  hi  lieu 
of  or  to  avoid  the  passing  of  property  transferred  by  testate  or  intestate 
laws. 

(5)  Whenever  property,  real  or  personal,  is  held  in  the  joint  names  of 
two  or  more  persons,   or  is   deposited   in    banks  or   other   institutions   or 
depositaries  in  the  joint  names  of  two  or  more  persons  and  payable  to  either 
or  the  survivor,  upon  the  death  of  one  of  euch  persons,  the  right  of  the  sur- 
viving joint  tenant  or  joint  tenants,  person   or  persons  to  the  immediate 
ownership  or  possession  and  enjoyment  of  such  property  shall  be  deemed  a, 
transfer  taxable  under  the  provisions  of  this  act  in  the  same  manner  as 
though  the  whole  property  to  which  such  transfer  relates  belonged  absolutely 
to  the  deceased  joint  tenant  or   joint  depositor  and  had  been  devised  or 
bequeathed  to  the  surviving  joint  tenant  or  joint  tenants,  person  or  persons, 
by  such  deceased  joint  tenant  or  joint  depositor  by  will,  excepting  therefrom 
such  port  thereof  as  may  be  proved  by  the  surviving  joint  tenant  or  joint 
tenants  to  have  originally  belonged  to  him  or  them  and  never  to  have  belonged 
to  the  decedent. 

(6)  Whenever  any  person,  trustee  or  corporation  shall  exercise  a  power  of 
appointment  derived  from  any  disposition  of  property  made  either  before  or 
after  the  passage  of  this  act,  such  appointment,  when  made,  shall  be  deemed 
a  transfer  taxable  under  the  provisions  of  this  act,  in  the  same  manner  as 
though  the  property  to  which  such  appointment  relates  belonged  absolutely  to 
the  donee  of  such  power,  and  had  been  bequeathed  or  devised  by  such  donee 
by  will;    and  whenever  any  person,  trustee  or  corporation  possessing  such 
power  of  appointment  so  derived  shall  omit  or  fail  to  exercise  the  same  within, 
the  time  provided  therefor,  in  whole  or  hi  part,  a  transfer  taxable  under  the 
provisions  of  this  act  shall  be  deemed  to  take  place  to  the  extent  of  such 
omission  or  failure,  in  the  same  manner  as  though  the  persons,  tmstees  or 
corporations  thereby  becoming  entitled  to  the  possession  or  enjoyment  of  the 
property  to  which  such  power  related  had  succeeded  thereto  by  a  will  of  the 
donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at  the  time  of 
such  omission  or  failure. 

(7)  Whenever  a  decedent  appoints  or  names  one  or  more  executors  or 
trustees,  and  makes  a  bequest  or  devise  of  property  to  them  in  lieu  of  com- 
missions or   allowances,   which   otherwise   would   be  liable  to   said   tax,   or 
appoints  them  his  residuary  legatees,  and  said  bequest,  devise,  or  residuary 
legacies  exceeds  what  would  be  a  reasonable  compensation  for  their  services, 
such   excess    over   and   above   the  exemptions  herein   provided   for   shall   be 
liable  to  said  tax;  and  the  superior  court  in  which  the  probate  proceedings 
are  pending  shall  fix  the  compensation. 

(8)  Where  any  property  shall,  after  the  passage  of  this  act,  be  transferred 
subject  to  any  charge,  estate  or  interest,  determinable  by  the  death  of  any 


662  INHERITANCE  TAXATION 

person,  or  at  any  period  ascertainable  only  by  reference  to  death,  the  increase 
accruing  to  any  person  or  corporation  upon  the  extinction  or  determination 
of  such  charge,  estate  or  interest,  shall  be  deemed  a  transfer  of  property 
taxable  under  the  provisions  of  this  act  in  the  same  manner  as  though  the 
person  or  corporation  beneficially  entitled  thereto  had  been  acquired  such 
increaae  from  the  person  from  whom  the  title  to  their  respective  estates  or 
interests  is  derived. 

(9)  When  more  than  one  transfer  within  the  meaning  of  any  of  the  pre- 
ceding subdivisions  of  this  section  has  been  made,  either  before  or  after  the 
passage  of  this  act,  by  a  decedent  to  one  person,  the  tax  shall  be  imposed  upon 
the  aggregate  market  value  of  all  of  the  property  so  transferred  to  such  per- 
son in  the  same  manner  and  to  the  same  extent  as  if  all  of  the  property  so 
transferred  were  actually  transferred  by  one  transfer. 

(10)  In  determining  the  market  value  of  the  property  transferred,  no 
deduction  shall  be  made  for  any  inheritance  tax  or  estate  tax  paid  to  the  gov- 
ernment of  the  United  States. 

§  3.  Such  taxes  shall  be  and  remain  a  lien  upon  the  property  passed  or 
transferred  until  paid;  provided,  that  said  lien  shall  be  limited  to  the  prop- 
erty chargeable  therewith,  and  the  person  to  whom  the  property  passes  or  is 
transferred,  and  all  administrators,  executors  and  trustees  of  every  estate  so 
transferred  or  passed,  shall  be  liable  for  any  and  all  such  taxes  until  the  same 
shall  have  been  paid  as  hereinafter  directed.  The  provisions  of  the  Code  of 
Civil  Procedure  relative  to  the  limitation  of  time  of  enforcing  a  civil  remedy 
shall  not  apply  to  any  proceeding  or  action  taken  to  levy,  appraise,  assess, 
determine,  or  enforce  the  collection  of  any  tax  or  penalty  prescribed  by  this 
article,  and  this  section  shall  be  construed  as  having  been  in  effect  as  of  date  of 
the  original  enactment  of  the  inheritance  tax  law;  provided,  that  unless  sued 
for  within  five  years  after  they  are  due  and  legally  demandable,  such  taxes, 
or  any  taxes  accruing  under  any  act  herein  repealed,  shall  cease  to  be  a  lien 
aa  against  any  "bona  fide  purchaser  of  said  property;  and  provided,  that  no 
such  lien  shall  cease  within  two  years  from  the  date  of  the  passage  of  this 
act. 

§  4.  When  the  property  of  any  beneficial  interest  therein  so  passed  or  trans- 
ferred exceeds  in  value  the  exemption  hereinafter  specified  and  shall  not 
exceed  in  value  twenty-five  thousand  dollars,  the  tax  hereby  imposed  shall  be: 
•  ( 1 )  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall-  be  the  husband,  wife,  lineal  ancestor,  lineal  issue  of  the 
decedent  or  any  child  adopted  as  such  in  conformity  with  the  laws  of  this 
state,  or  any  child  to  whom  such  decedent  for  not  less  than  ten  years  prior  to 
such  transfer  stood  in  the  mutually  acknowledged  relation  of  a  parent 
(provided,  however,  such  relationship  began  at  or  before  the  child's  fifteenth, 
birthday,  and  was  continuous  for  said  ten  years  thereafter ) ,  or  any  lineal 
issue  of  such  adopted  or  mutually  acknowledged  child,  at  the  rate  of  one 
per  centum  of  the  clear  value  of  such  interest  in  such  property. 

(2)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  a  descendant  of  a  brother  or  sister 
of  a  decedent,  a  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter  of  the 
decedent  at  the  rate  of  three  per  centum  of  the  clear  value  of  such  interest 
in  such  property. 

(3)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  father  or  mother,  or  a  descend- 
ant of  a  brother  or  sister  of  the  father  or  mother  of  the  decedent,  at  the  rate 
of  four  per  centum  of  the  clear  value  of  such  interest  in  such  property. 

(4)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  herein- 
before stated  or  shall  be  a  stranger  in  blood  to  the  decedent,  or  shall  be  a 
body  politic  or  corporate,  at  the  rate  of  five  per  centum  of  the  clear  value  of 
such  interest  in  such  property. 

§  5.  (1)  When  the  market  value  of  such  property  or  interest  passed  or 
transferred  to  any  of  the  persons  mentioned  in  subdivision  one  of  section  four 
exceeds  twenty-five  thousand  dollars,  the  rates  of  tax  upon  such  excess  shall 
be  as  follows: 


THE  STATE  STATUTES  663 

(a)  Upon  all  in  excess  of  twenty-five  thousand  dollars  and  up  to  fifty 
thousand  dollars,  two  per  centum  of  such  excess. 

(b)  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred 
thousand  dollars,  four  per  centum  of  such  excess. 

(c)  Upon  all  in  excess  of  one  hundred  thousand  dollars  and  up  to  two 
hundred  thousand  dollars,  seven  per  centum  of  such  excess. 

(d)  Upon  all  in  excess  of  two  hundred  thousand  dollars  and  up  to  five  hun- 
dred thousand  dollars,  ten  per  centum  of  such  excess. 

(e)  Upon  all  in  excess  of  five  hundred  thousand  dollars  and  up  to  one 
million  dollars,  twelve  per  centum  of  such  excess. 

(f)  Upon  all  in  excess  of  one  million  dollars,  fifteen  per  centum  of  such 
excess.  . 

(2)  When  the  market  value  of  such  property  or  interest  passed  or  trans- 
ferred to  any  of  the  persons  mentioned  in  subdivision  two  of  section  four 
exceeds  twenty-five  thousand  dollars,  the  rates  of  tax  upon  such  excess  shall 
be  as  follows: 

(a)  Upon  all  in  excess  of  twenty-five  thousand  dollars  and  up  to  fifty 
thousand  dollars,  six  per  centum  of  such  excess. 

(b)  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred 
thousand  dollars,  nine  per  centum  of  such  excess. 

(c)  Upon  all  in  excess  of  one  hundred  thousand  dollars  and  up  to  two  hun- 
dred thousand  dollars,  twelve  per  centum  of  such  excess. 

(d)  Upon  all  in  excess  of  two  hundred  thousand  dollars  and  up  to  five 
hundred  thousand  dollars,  fifteen  per  centum  of  such  excess. 

(e)  Upon  all  in  excess  of  five  hundred  thousand  dollars  and  up  to  one 
million  dollars,  twenty  per  centum  of  such  excess. 

(f)  Upon  all  in  excess  of  one  million  dollars,  twenty-five  per  centum  of 
such  excess. 

(3)  When  the  market  value  of  such  property  or  interest  passed  or  trans- 
ferred   to  any  of  the  persons  mentioned  in  subdivision  three  of  section  four 
exceeds  twenty-five  thousand  dollars,  the  rates  of  tax  upon  such  excess  shall 
be  as  follows: 

(a)  Upon   all  in  excess  of  twenty-five  thousand   dollars   and  up  to  fifty 
thousand  dollars,  eight  per  centum  of  such  excess. 

(b)  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred 
thousand  dollars,  ten  per  centum  of  such  excess. 

(c)  Upon  all  in  excess  of  one  hundred  thousand  dollars  and  up  to  two  hun- 
dred thousand  dollars,  fifteen  per  centum  of  such  excess. 

(d)  Upon  all  in  excess  of  two  hundred  thousand  dollars  and  up  to  five 
hundred  thousand  dollars,  twenty  per  centum  of  such  excess. 

(e)  Upon  all  in  excess  of  five  hundred  thousand  dollars  and  up  to  one 
million  dollars,  twenty-five  per  centum  of  such  excess. 

(f)  Upon  all  in  excess  of  one  million  dollars,  thirty  per  centum  of  such 
excess. 

(4)  When  the  market  value  of  such  property  or  interest  passed  or  trans- 
ferred to  any  of  the  persons  mentioned  in  subdivision  four  of  section  four 
exceeds  twenty-five  thousand  dollars,  the  rates  of  tax  upon  such  excess  shall 
be  as  follows: 

(a)  Upon  all  in  excess  of  twenty-five  thousand  dollars  and  up  to  fifty 
thousand  dollars,  ten  per  centum  of  such  excess. 

(b)  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred 
thousand  dollars,  fifteen  per  centum  of  such  excess. 

(c).  Upon  all  in  excess  of  one  hundred  thousand  dollars  and  up  to  two 
hundred  thousand  dollars,  twenty  per  centum  of  such  excess. 

(d)  Upon  all  in  excess  of  two  hundred  thousand  dollars  and  up  to  five 
hundred  thousand  dollars,  twenty-five  per  centum  of  such  excess. 

(e)  Upon  all  in  excess  of  five  hundred  thousand  dollars,  thirty  per  centum 
of  such  excess. 

§  6^  The  following  exemptions  from  the  tax  are  hereby  allowed : 
(1)   All  property  transferred  to  societies,   corporations,   and   institutions 
now  or  hereafter  exempted  by  law  from  taxation,  or  to  any  public  corpora- 
tion, or  to  any  society,  corporation,  institution,  or   association   of  persona 


664  IKHERITAXCE  TAXATION 

engaged  in  or  devoted  to  any  charitable,  benevolent,  educational,  public  or 
other  like  work  (pecuniary  profit  not  being  its  object  or  purpose),  or  to  any 
person,  society,  corporation,  institution,  or  association  of  persona  in  trust  for 
or  to  be  devoted  to  any  charitable,  benevolent,  educational,  or  public  purpose, 
by  reason  whereof  any  such  person  or  corporation  shall  become  beneficially 
entitled,  in  possession  or  expectancy,  to  any  such  property  or  to  the  income 
thereof,  shall  be  exempt;  provided,  however,  that  such  society,  corporation, 
institution  or  association  be  organized  or  existing  under  the  laws  of  this 
state  or  that  the  property  transferred  be  limited  for  use  within  this  state. 

(2)  Property  of  the  clear  value  of  twenty-iour  thousand  dollars,  trans- 
ferred to  the  widow  or  to  a  minor  child  of  the  decedent,  and  of  ten  thousand 
dollars  transferred  to  each  of  the  other  persons  described  in  the  first  sub- 
section four,  shall  be  exempt. 

(3)  Property  of  the  clear  "value  of  two  thousand  dollars,  transferred  to 
each  of  the  persons  described  in  the  second  subdivision  of  section  four,  shall 
be  exempt. 

(4)  Property  of  the  clear  value  of  one  thousand  dollars,  transferred  to 
each  of  the  persons  described  in  the  third  subdivision  of  section  four,  shall  be 
exempt. 

(5)  Property  of  the  clear  value  of  five  hundred  dollars,  transferred  to 
each  of  the  persons  and  corporations  described  in  the  fourth  subdivision  of 
section  four,   shall  be  exempt. 

§  7.  ( 1 )  All  taxes  imposed-  by  this  act,  unless  otherwise  herein  provided 
for,  shall  be  due  and  payable  at  the  death  of  the  decedent,  and  if  the  same 
are  paid  within  eighteen  months,  no  interest  shall  be  charged  -and  collected 
thereon,  but  if  not  so  paid,  interest  at  the  rate  of  ten  per  centum  per  annum 
shall  be  charged  and  collected  from  the  time  said  tax  accrued;  provided,  that 
if  said  tax  is  paid  within  six  months  from  the  accruing  thereof  a  discount  of 
five  per  centum  shall  be  allowed  and  deducted  from  said  tax.  And  in  all  cases 
where  the  executors,  administrators,  or  trustees  do  not  pay  such  tax  within 
eighteen  months  from  the  death  of  the  decedent,  they  shall  be  required  to  give 
a  bond  for  the  payment  of  said  tax,  together  with  interest. 

(2)  The  penalty  of  ten  per  cent  -per  annum  imposed  by  subdivision  (1)  of 
this  section  for  the  nonpayment  of  said  tax,  shall  not  be  charged  in  cases 
where,  in.  the  judgment  of  the  court,  by  reason  of  claims  made  upon  the 
estate  necessary  litigation,  or  other  unavoidable  cause  of  delay,  the  estate 
of  any  decedent,  or  a  part  thereof,  can  not  be  settled  at  the  end  of  eighteen 
months  from  the  death  of  the  decedent;  but  in  such  cases  seven  per  cent  per 
annum  shall  be  charged  upon  the  said  tax  from  the  expiration  of  said 
eighteen  months  until  the  cause  of  such  delay  is  removed,  after  which  ten  per 
cent  interest  per  annum  shall  again  be  charged  until  the  tax  is  paid ;  but  liti- 
gation to  defeat  the  payment  of  the  tax  shall  not  be  considered  necessary 
litigation. 

§  8.  (.1)  When  any  grant,  gift,  legacy,  devise  or  succession  upon  which  a 
tax  is  imposed  by  section  two  of  this  act  shall  be  an  estate,  income,  or  interest 
for  a. term  of  years,  or  for  life,  or  determinable  upon  any  future  or  contingent 
event,  or  shall  be  a  remainder,  reversion,  or  other  expectancy,  real  or  personal, 
the  entire  property  or  fund  by  which  such  estate,  income,  or  interest  is  sup- 
ported, or  of  which  it  is  a  part,  shall  be  appraised  immediately  after  the 
death  of  the  decedent,  and  the  market  value  thereof  determined,  in  the  manner 
provided  in  section  sixteen  or  seventeen  of  this  act,  and  the  tax  prescribed  by 
this  act  shall  be  immediately  due  and  payable  to  the  treasurer  of  the  proper 
county,  and,  together  with  the  interest  thereon,  shall  be  and  remain  a  lien  on 
said  property  until  the  same  is  paid. 

(2)  In  estimating  the  value  of  any  estate  ©r  interest  in  property,  to  the 
beneficial  enjoyment  or  possession  whereof  there  are  persons  or  corporations 
presently  entitled  thereto,  no  allowance  shall  be  made  on  account  of  any  con- 
tingent incumbrance  thereon,  nor  on  account  of  any  contingency  upon  the 
happening  of  which  the  estate  or  property  or  some  part  thereof  or  interest 
therein  might  be  abridged,  defeated  or  diminished;  provided,  however,  that  in 
the  event  of  such  encumbrance  taking  effect  as  an  actual  burden  upon  the 
interest  of  the  beneficiary,  or  in  the  event  of  the  abridgment,  defeat  or  diminu- 
tion of  said  estate  or  property  or  interest  therein  as  aforesaid,  a  return  shall 


THE  STATE  STATUTES  665 

be  made  to  the  person  properly  entitled  thereto  of  a  proportionate  amount  of 
such  tax  on  account  of  the  incumbrance  when  taking  effect,  or  so  much  as  will 
reduce  the  same  to  the  amount  which  would  have  been  assessed  on  account  of 
the  actual  duration  or  extent  of  the  estate  or  interest  enjoyed.  Such  return  of 
tax  ahall  be  made  in  the  manner  provided  by  section  eleven  hereof  upon  order 
of  the  court  having  jurisdiction. 

(3)    When  property  is  transferred  in  trust  or  otherwise,  and  the  rights, 
interest  or  estates  of  the  transferees  are  dependent  upon  contingencies  or  con- 
ditions whereby  they  may  be  wholly  or  in  part  created,  defeated,  extended,  or 
abridged,  a  tax  shall  be  imposed  upon  said  transfer  at  the  highest  rate  which, 
on  the  happening  of  any  of  the  said  contingencies  or  conditions,  would  be 
possible  under  the  provisions  of  this  act,  and  such  tax  so  imposed  shall  be  due 
and  payable  forthwith  by  the  executors  or  trustees  out  of  the  property  trans- 
ferred;  provided,  however,  that  on  the  happening  of  any  contingency  whereby 
the  said  property,  or  any  part  thereof,  is  transferred  to  a  person  or  corpora- 
tion exempt  from  taxation  under  the  provisions  of  this  act,  or  to  any  person 
taxable  at  a  rate  less  than  the  rate  imposed  and  paid,  such  person  or  corpo- 
ration shall  be  entitled  to  a  return  of  so  much  of  the  tax  imposed  and  paid  as 
the  difference  between  the  amount  paid  and  the  amount  which  said  person  or 
corporation  should  pay  under  the  provisions  of  this  act;    such  return  of  over- 
payment shall  be  made  in  the  manner  provided  by  section  eleven  of  this  act, 
upon  order  of  the  court  having  jurisdiction;    provided,  that  the  person  or 
persons  or  body  politic  or  corpjorate  beneficially  interested  in  the  property 
chargeable  with  said  tax  or  the  trustees  thereof  may  elect  not  to  pay  the  same 
until  such  person  or  persons,  or  body  politic  or  corporate  beneficially  interested 
in  such  property  shall  come  into  the  actual  possession  or  enjoyment  thereof, 
and  in  that  case  such  person  or  persons  or  body  politic  or   corporate  or 
trustees  shall  execute  a  bond  to  the  people  of  the  State  of  California  in  a 
penalty  of  twice  the  amount  of  said  tax  with  such  sureties  as  the  said  superior 
court  may  approve,  conditioned  for  the  payment  of  said  tax  and  interest 
thereon  at  the  rate  of  seven  per  cent,  per  annum  commencing  at  the  expiration 
of  eighteen  months  from  the  death  of  the  decedent  at  such  time  or  period  as 
they  or  their  representatives  may  come  into  the  actual  possession  or  enjoyment 
of  such  property,  and  conditioned  further,  that  if  said  bond  be  not  renewed  and 
the  returns  made  as  herein  provided,  the  amount  of  said  tax  and  interest 
thereon  shall  immediately  become  due  and  payable.     Said  bond  shall  be  filed 
in  the  office  of  the  county  clerk  of  the  proper  county  and  a  certified  copy 
thereof  shall  be  immediately  transmitted  to  the  state  controller;    provided, 
further,  that  such  person  or  persons  or  body  politic  or  corporate,  or  trustees, 
shall  enter  into  such  security  within  a  period  of  ninety  days  after  the  entry 
of  the  order  or  decree  fixing  the  inheritance  tax  charged  against  such  transfer, 
or  within  such  period  thereafter  as  the  court  may  in  its  discretion  permit, 
and  shall  make  a  full  and  verified  return  of  such  property  to  said  court  and 
file  the  same  in  the  office  of  the  county  clerk  within  one  year  from  the  date 
of  such  order  or  decree  fixing  tax,  and  at  such  times  thereafter  as  the  court  on 
the  application  of  the  state  controller  may  require,  and  renew  such  security 
every  five  years  after  the  date  of  the  approval  thereof.     Upon  the  approval 
of  said  bond  as  herein  provided,  said  tax  shall  cease  to  be  a  lien  upon  the 
property  so  transferred.     If  such  security  shall  not  be  renewed  before  the 
expiration  of  each  five-year  period,  said  bond  shall  immediately  become  due 
and  payable  and  if  the  same  be  not  paid  forthwith,  the  attorney  general  shall 
file  an.  action  in  the  name  of  the  people  of  the  state  on  the  relation  of  the 
controller,  to  recover  the  same  and  the  penalties  thereunder  and  no  demand  for 
payment  shall  be  necessary  before  the  institution  of  such  suit.     Whenever  it 
shall  be  made  to  appear  to  the  satisfaction  of  the  court  that  any  surety  on 
such  bond  or  undertaking  has  for  any  reason  become  insufficient,  the  court 
may  on  motion  of  the  state  controller,  after  such  notice  to  such  person  or 
persons,  body  politic  or  corporate,  or  trustees  as  the  court  may  require,  order 
the  giving  of  a  new  undertaking  with  sufficient  sureties  in  lieu  of  such  insuf- 
ficient undertaking.     In  case  such  new  undertaking  so  required  shall  not  be 
given  within  the  time  required  by  euch  order,  or  in  case  the  sureties  thereon 
fail  to  justify  thereon  when  required,  all  rights  obtained  by  the  filing  of  such 


666  INHERITANCE  TAXATION 

original  undertaking,  or  subsequent  undertaking,  shall  cease  and  the  amount  of 
said  tax  and  interest  thereon  shall  immediately  become  due  and  payable. 

(4)  Estates  in  expectancy  which  are  contingent  or  defeasible  and  in  which 
proceedings  for  the  determination  of  the  tax  have  not  been  taken  or  where 
the  taxation  thereof  has  been  held  in  abeyance,  shall  be  appraised  at  their 
full,  undiminished  value  when  the  persons  entitled  thereto  shall  come  into 
the  beneficial  enjoyment  or  possession  thereof,  without  diminution  for  or  on 
account  of  any  valuation  theretofore  made  of  the  particular  estates  for  pur- 
poses of   taxation,  upon  which   said   estates   in   expectancy  may  have  been 
limited. 

(5)  Where  an  estate  or  interest  can  be  divested  by  the  act  or  omission  of 
the  legatee  or  devisee  it  shall  be  taxed  as  if  there  were  no  possibility  of  such 
divesting. 

(6)  The  value  of  every  future,  or  contingent  or  limited  estate,  income  or 
interest,  shall,  for  the  purposes  of  this  act  be  determined  by  the  rule,  methods 
and  standards  of  mortality  and  of  value  that  are  set  forth  in  the  actuaries' 
combined  experience  tables  of  mortality  for  ascertaining  the  value  of  policies 
of  life  insurance  and  annuities  and  for  the  determination  of  the  liabilities  of 
life  insurance  companies,  save  that  the  rate  of  interest  to  be  assessed  in 
computing  the  present  value  of  all  future  interest  and  contingencies  shall  be 
five  (5)  per  cent  per  annum.    The  insurance  commissioner  shall  without  a  fee 
on  the  application  of  any  superior  court  or  of  any  inheritance  tax  appraiser 
determine  the  value  of  any  future  or  contingent  estate,  income  or  interest 
therein  limited,  contingent,  dependent  or  determinable  upon  the  life  or  lives  of 
persons  in  being,  upon  the  facts  contained  in  any  such  appraiser's  application 
or  other  facts  to  him  submitted  by  said  appraiser  or  said  court  and  certify  the 
same  in  duplicate  to  such  court  or  appraiser,  and  his  certificate  thereof  shall 
be  conclusive  evidence  that  the  method  of  computation  therein  is   correct. 
When  an  annuity  or  a  life  estate  is  terminated  by  the  death  of  the  annuitant 
or  life  tenant,  and  the  tax  upon  such  interest  has  not  been  fixed  and  deter- 
mined, the  value  of  said  interest  for  the  purpose  of  taxation  under  this  act 
shall  be  the  amount  of  the  annuity  or  income  actually  paid  or  payable  to  the 
annuitant  or  life  tenant  during  the  period  for  which  such  annuitant  or  life 
tenant  was  entitled  to  the  annuity  or  was  in  possession  of  the  life  estate. 

§  9.  (1))  Any  administrator,  executor,  or  trustee  having  in  charge  or  trust 
any  legacy  or  property  for  distribution,  subject  to  the  said  tax,  shall  deduct 
the  tax  therefrom,  or  if  the  legacy  or  property  be  not  money  he  shall  collect 
the  tax  thereon,  upon  the  market  value  thereof,  from  the  legatee  or  persoo 
entitled  to  such  property,  and  he  shall  not  deliver  or  be  compelled  to  deliver, 
any  specific  legacy  or  property  subject  to  tax  to  any  person  until  he  shall 
have  collected  the  tax  thereon ;  and  whenever  any  such  legacy  shall  be  charged 
upon  or  payable  out  of  real  estate,  the  executor,  administrator,  or  trustee  shall 
collect  said  tax  from  the  distributee  thereof,  and  the  same  shall  remain  a 
charge  on  such  real  estate  until  paid;  if,  however,  such  legacy  be  given 
in  money  to  any  person  for  a  limited  period,  the  executor,  administrator,  or 
trustee  shall  retain  the  tax  upon  the  whole  amount ;  but  if  it  be  not  in  money 
he  shall  make  application  to  the  superior  court  to  make  an  apportionment,  if 
the  case  require  it,  of  the  sum  to  be  paid  into  his  hands  by  such  legatees,  and 
for  such  further  order  relative  thereto  as  the  case  may  require. 

(2)  All  executors,  administrators,  and  trustees  shall  have  full  power  to  sell 
so  much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said  tax, 
in  the  same  manner  as  they  may  be  enabled  by  law  to  do  for  the  payment  of 
debts  of  the  estate,  and  the  amount  of  said  tax  shall  be  paid  as  hereinafter 
directed. 

(3)  Every  sum  of  money  retained  by  an  executor,  administrator,  or  trustee, 
or  paid  into  his  hands,  for  any  tax  on  property,  shall  be  paid  by  him,  within 
thirty  days  thereafter,  to  the  treasurer  of  the  county  in  which  the  probate 
proceedings  are  pending. 

§  10.  Upon  the  payment  to  any  county  treasurer  of  any  tax  due  under  this 
act,  such  treasurer  shall  issue  a  receipt  therefor,  in  triplicate,  one  copy  of 
which  he  shall  deliver  to  the  person  paying  said  tax,  and  the  original  and  one 
copy  thereof  he  shall  immediately  send  to  the  controller  of  state,  whose  duty 


THE  STATE  STATUTES  667 

it  shall  be  to  charge  the  treasurer  so  receiving  the  tax  with  the  amount 
thereof,  and  said  controller  shall  retain  one  of  said  receipts  and  the  other  he 
shall  countersign  and  seal  with  the  seal  of  his  office,  and  immediately  transmit 
to  the  clerk  of  the  court  fixing  such  tax.  And  an- executor,  administrator,  or 
trustee  shall  not  be  entitled  to  credits  in  his  accounts,  nor  be  discharged 
from  liability  for  such  tax,  nor  shall  said  estate  be  distributed,  unless  a 
receipt  so  sealed  and  countersigned  by  the  controller,  or  a  copy  thereof,  certi- 
fied by  him,  shall  have  been  filed-  with  the  court.  Any  person  shall,  upon 
payment  to  the  county  treasurer  of  the  sum  of  fifty  cents,  be  entitled  to  a 
duplicate,  or  copy,  of  any  receipt  that  may  have  been  given  by  said  treasurer 
for  the  payment  of  any  tax  under  this  act. 

§  11.  (1)  If  any  debts  shall  be  proved  against  the  estate  of  a  decedent 
after  the  payment  of  any  legacy  or  distributive  share  thereof,  from  which  any 
such  tax  has  been  deducted  or  upon  which  it  has  been  paid  by  the  person 
entitled  to  such  legacy  or  distributive  share,  and  such  person  is  required  by 
order  of  the  superior  court  having  jurisdiction,  on  notice  to  the  state  con- 
troller, to  refund  the  amount  of  such  debts  or  any  part  thereof,  an  equitable 
proportion  of  the  tax  shall  be  repaid  to  him  by  the  executor,  administrator 
or  trustee,  if  the  tax  has  not  been  paid  to  the  county  treasurer;  or  if  such 
tax  has  been  paid  to  such  county  treasurer,  such  officer  shall  refund  out  of 
any  inheritance  tax  moneys  in  his  hands  or  custody  such  equitable  proportion 
of  the  tax,  and  credit  himself  with  the  same  in  the  account  required  to  be 
rendered  by  him  under  this  act. 

(2)  Where  it  shall  be  proved  to  the  satisfaction  of  the  superior  court  that 
deductions  for  debts  were  allowed  upon  the  appraisal,  since  proved  to  have 
been  erroneously  allowed,  it  shall  be  lawful  for  such  superior  court  to  enter 
an  order  assessing  the  tax  upon  the  amount  wrongfully  or  erroneously 
deducted. 

(3)!  If,  after  the  payment  of  any  tax  in  pursuance  of  an  order  fixing  such 
tax,  made  by  the  superior  court  having  jurisdiction,  such  order  be  modified  or 
reversed  by  the  superior  court  having  jurisdiction  within  two  years  from  and 
after  the  date  of  entry  of  the  order  fixing  the  tax,  or  be  modified  or  reversed 
at  any  time  on  an  appeal  taken  therefrom  within  the  time  allowed  by  law 
on  due  notice  to  the  state  controller,  the  county  treasurer  shall  refund  to  the 
executor,  administrator,  trustee,  person  or  persons  by  whom  such  tax  was 
paid,  the  amount  of  any  moneys  paid  or  deposited  on  account  of  such  tax  in 
excess  of  the  amount  of  tax  fixed  by  the  order  modified  or  reversed,  out  of 
any  inheritance  tax  moneys  in  his  hands  or  custody,  and  credit  himself  with 
the  same  in  the  account  required  to  be  rendered  by  him  to  the  controller  on 
his  semi-annual  settlement;  but  no  application  for  such  refund  shall  be  made 
after  one  year  from  such  reversal  or  modification,  unless  an  appeal  shall  be 
taken  therefrom,  in  which  case  no  such  application  shall  be  made  after  one 
year  from  the  final  determination  on  such  appeal  or  of  an  appeal  taken  there- 
from, and  the  representatives  of  the  estate,  legatees,  devisees  or  distributees 
entitled  to  any  refund  under  this  section  shall  not  be  entitled  to  any  interest 
upon  such  refund,  and  the  state  controller  shall  deduct  from  the  fees  allowed 
by  this  act  to  the  county  treasurer  the  amount  theretofore  allowed  him  upon 
such  overpayment. 

(4)  When  any  amount  of  said  tax  shall  have  been  erroneously  paid,  the 
superior  court  having  jurisdiction,  on  application  after  notice  to  the  state 
controller,  and  on  satisfactory  proof  to  it,  shall  by  order  require  the  county 
treasurer  to  refund  and  pay  to  the  executor,  administrator,  trustee,  person  or 
persons  who  had  paid  any  such  tax  in  error  the  amount  of  such  tax  so 
erroneously  paid;  provided,  that  all  applications  for  such  repayment  of  such 
tax  so  erroneously  paid  shall  be  made  within  one  year  of  the  date  of  the 
entry  of  the  order  fixing  tax  or  of  the  decree  of  final  distribution  of  the 
estate.  Such  refund  shall  be  made  by  said  treasurer  out  of  any  inheritance  tax 
moneys  in  his  hands  or  custody  and  ho  shall  credit  himself  with  the  same  in 
the  account  required  to  be  rendered  by  him  to  the  controller  on  semi- 
annual settlement ;  and  the  state  controller  shall  deduct  from  the  fees  allowed 
by  this  act  to  the  county  treasurer  the  amount  theretofore  allowed  him  upon 
such  erroneous  payment. 


668  INHERITANCE  TAXATION 

(5)  This  section,  as  amended,  shall  apply  to  appeals  and  proceedings  now 
pending  and  taxes  heretofore  paid  in  relation  to  which  the  period  of  one  year 
from  such  reversal  or  modification  has  not  expired  when  this  section,  as 
amended,  takes  effect. 

§  12.  ( 1 )  Whenever  the  state  controller  shall  have  reasonable  cause  to 
believe  that  a  tax  is  due  under  the  provisions  of  this  act,  upon  any  transfer 
of  any  property,  and  that  any  person,  firm,  institution,  company,  association 
or  corporation  has  possession,  custody  or  control  of  any  books,  accounts, 
papers  or  documents  relating  to  or  evidencing  such  transfer,  the  state  con- 
troller or  inheritance  tax  attorney,  or  any  assistant  inheritance  tax  attorney 
of  the  inheritance  tax  department,  is  hereby  authorized  and  empowered  to 
inspect  the  books,  records,  accounts,  papers  and  documents  of  any  such  person, 
firm,  institution,  company,  association  or  corporation  including  the  stock 
transfer  book  of  any  corporation,  for  the  purpose  of  acquiring  any  informa- 
tion deemed  necessary  or  desirable  by  said  state  controller  or  such  inheritance 
tax  attorney  or  assistant  inheritance  tax  attorneys,  for  the  proper  enforce- 
ment of  this  act,  and  for  the  collection  of  the  full  amount  of  tax  which  may  be 
due  the  state  hereunder.  Any  and  all  information  acquired  by  said  state 
controller  or  said  inheritance  tax  attorney  or  assistant  inheritance  tax  attor- 
neys shall  be  deemed  and  held  by  said  state  controller  and  said  inheritance  tax 
attorney  and  assistant  inheritance  tax  attorneys  and  each  of  them,  as  confi- 
dential, and  shall  not  be  divulged,  disclosed  or  made  known  by  them  or  any  of 
them  except  in  so  far  as  may  be  necessary  for  the  enforcement  of  the  pro- 
visions of  this  act.  Any  controller  or  ex-controller,  or  inheritance  tax  attorney 
or  ex-inheritance  tax  attorney,  or  assistant  inheritance  tax  attorney,  or 
ex-assistant  inheritance  tax  attorney,  who  shall  divulge,  disclose  or  make 
known  any  information  acquired  by  such  inspection  and  examination  afore- 
said, except  in  so  far  as  the  same  may  be  necessary  for  the  enforcement  of  the 
provisions  of  this  act,  shall  be  guilty  of  a  misdemeanor,  and  upon  conviction 
thereof  shall  be  fined  not  less  than  two  hundred  and  fifty  dollars  nor  more 
than  five  hundred?  dollars,  or  be  imprisoned  in  the  county  jail  for  not  more 
than  ninety  days,  or  both. 

(2)  Any  officer  or  agent  of  any  firm,  institution,  company,  association  or 
corporation  having  or  keeping  an  office  within  this  state,  who  has  in  his 
custody  or  under  his  control  any  book,  record,  account,  paper  or  document  of 
such  firm,  institution,  company,  association  or  corporation,  and  any  person 
having  in  his  custody  or  under  his  control  such  book  record,  account,  paper 
or  document  who  refuses  to  give  to  the  state  controller,  or  said  inheritance 
tax  attorney,  or  any  of  said  assistant  inheritance  tax  attorneys,  lawfully 
demanding,  as  provided  in  this  section,  during  office  hours  to  inspect  or  take 
a  copy  of  the  same  or  any  part  thereof,  for  the  purposes  hereinabove  provided, 
a  reasonable  opportunity  so  to  do,  shall  be  liable  to  a  penalty  of  not  leas  than 
one  thousand  dollars  nor  more  than  twenty  thousand  dollars,  and  in  addition 
thereto  shall  be  liable  for  the  amount  of  the  taxes,  interest  and  penalties  due 
under  this  act  on  such  transfer,  and  the  said  penalties  and  liabilities  for  the 
violation  of  this  section  may  be  enforced  in  an  action  brought  by  the  state 
controller  in  any  court  of  competent  jurisdiction. 

§  13.  (1)  No  corporation  organized  or  existing  under  the  laws  of  this  state, 
shall  transfer  on  its  books  or  issue  a  new  certificate  for  any  share  or  shares 
of  its  capital  stock  belonging  to  or  standing  in  the  name  of  a  decedent  or  in 
trust  for  a  decedent  or  belonging  to  or  standing  hi  the  joint  names  of  a 
decedent  and  one  or  more  persons,  without  the  written  consent  of  the  state 
controller  or  person  by  him  in  writing  authorized  to  issue  such  consent. 

(2)  No  safe  deposit  company,  trust  company,  corporation,  bank  or  other 
institution,  person  or  persons  having  in  possession  or  under  control  or  custody 
or  under  partial  control  or  partial  custody  securities,  deposits,  assets  or  prop- 
erty belonging  to  or  standing  in  the  name  of  a  decedent  who  was  a  resident  or 
non-resident,  or  belonging  to,  or  standing  in  the  joint  names  of  such  a 
decedent  and  one  or  more  persons,  including  the  shares  of  the  capital  stock  of, 
or  other  interest  in,  the  safe  deposit  company,  trust  company,  corporation, 
bank  or  other  institution  making  the  delivery  or  transfer  herein  provided, 
ehall  deliver  or  transfer  the  same  to  the  executors,  administrators  or  legal 


THE  STATE  STATUTES  669 

representatives,  agents,  deputies,  attorneys,  trustees,  legatees,  heirs,  successors 
in  interest  of  said  decedent  or  to  any  other  person  or  persons  or  to  the  sur- 
vivor or  survivors  when  held  in  the  joint  names  of  a  decedent  and  one  or 
more  persons  or  under  their  order  or  request,  without  retaining  a  sufficient 
portion  or  amount  thereof  to  pay  any  tax  and  interest  which  may  thereafter 
be  assessed  thereon  under  this  act  and  unless  notice  of  the  time  and  place 
of  such  delivery  or  transfer  be  served  upon  the  state  controller  and  county 
treasurer  at  least  ten  days  prior  to  said  delivery  or  transfer;  provided,  that 
the  state  controller,  or  person  by  him  in  writing  authorized  so  to  do,  may 
consent  in  writing  to  said  delivery  or  transfer,  and  such  consent  shall  relieve 
said  safe  deposit  company,  trust  company,  corporation,  bank  or  other  institu- 
tion, person  or  persons  from  the  obligation  hereunder  to  give  such  notice  or 
to  retain  any  portion  of  said  securities,  deposits  or  other  assets  in  their  pos- 
session or  control.  And  it  shall  be  lawful  for  the  state  controller  or  county 
treasurer,  personally  or  by  representatives,  to  examine  said  securities,  deposits 
or  assets  at  the  time  of  said  delivery  or  otherwise. 

(3)  Failure  to  comply  with  the  provisions  of  this  section  shall  render  such 
safe  deposit  company,  trust  company,  corporation,  bank  or  other  institution, 
person  or  persons,  liable  to  a  penalty  of  not  more  than  twenty  thousand  dol- 
lars, and  in  addition  thereto  said  safe  deposit  company,  trust  company, 
corporation,  bank  or  other  institution,  person  or  persons  shall  be  liable  for  the 
amount  of  the  taxes,  interest  and  penalties  due  under  this  act  on  said  securi- 
ties, deposits,  or  other  assets  above  mentioned,  and  said  penalties  and  liabili- 
ties "of  said  safe  deposit  company,  corporation,  bank  or  other  institution,  per- 
son or  persons  for  the  violation  of  this  section  may  be  enforced  in  an  action 
brought  by  the  state  controller  in  any  court  of  competent  jurisdiction. 

§  14.  The  state  controller  shall  appoint,  and  may  at  his  pleasure  remove, 
one  or  more  persons  in  each  county  of  the  state  to  act  as  inheritance  tax 
appraisers  therein.  Every  such  inheritance  tax  appraiser  (in  addition  to  any 
fees  paid  him  as  appraiser  under  section  one  thousand  four  hundred  forty-four 
of  the  Code  of  Civil  Procedure)  shall  be  paid  for  his  services  out  of  any 
inheritance  tax  moneys  in  the  hands  of  the  treasurer  of  the  county  in  which 
he  may  be  acting,  a  reasonable  compensation,  to  be  fixed  by  the  superior  court 
of  said  county,  or  a  judge  thereof,  and,  together  with  said  compensation,  said 
appraiser  shall  be  allowed  his  actual  and  necessary  traveling  and  other  inci- 
dental expenses,  and  the  fees  paid  such  witnesses  as  he  shall  subpoena  before 
him,  said  expenses  and  fees  to  be  allowed  by  said  superior  court  or  a  judge 
thereof ;  provided,  that  any  claim  for  any  such  services  or  expenditure,  must 
before  payment,  first  receive  the  approval  of  the  state  controller;  and  pro- 
vided, further,  that  in  any  probate  proceeding  in  which  the  executor  or  admin- 
istrator shall  have  failed  to  have  had  the  inheritance  tax  appraiser  act  as  one 
of  the  appraisers  under  section  one  thousand  four  hundred  forty-four  of  the 
Code  of  Civil  Procedure  and  to  have  paid  him  his  fees  therefor,  the  expense  of 
making  the  inheritance  tax  appraisement  in  this  act  provided  for  shall  be  paid 
out  of  said  estate,  and  the  executor  or  administrator  thereof  shall  be  liable 
for  said  fee.  Any  such  appraiser  who  shall  take  any  fee  or  reward,  other 
than  such  as  may  be  allowed  him  by  law,  from  any  executor,  administrator, 
trustee,  legatee,  next  of  kin,  or.  heir  of  any  decedent,  or  from  any  other  person 
liable  to  pay  said  tax,  or  any  portion  thereof,  shall  be  guilty  of  a  misdemeanor, 
and  upon  conviction  thereof  shall  be  fined  not  less  than  two  hundred  fifty 
dollars  nor  more  than  five  hundred  dollars,  or  be  imprisoned  in  the  county 
jail  ninety  days  or  both,  and  in  addition  thereto  the  court  shall  dismiss  him 
from  such  service. 

§  15.  The  superior  court  in  the  county  in  which  is  situate  the  real  prop- 
erty of  a  decedent,  who  was  not  a  resident  of  the  state,  or  if  there  be  no  real 
property,  then  in  the  county  in  which  any  of  the  personal  property  of  such 
nonresident  is  situate,  or  in  the  county  of  which  the  decedent  was  a  resident 
at  the  time  of  his  death,  shall  have  jurisdiction  to  hear  and  determine  all 
Questions  in  relation  to  the  tax  arising  under  the  provisions  of  this  act;  the 
court  first  acquiring  jurisdiction  hereunder  shall  retain  the  same,  to  the  exclu- 
sion of  every  other;  provided,  that  the  superior  court  having  acquired  juri*- 
diction  in  probate  of  the  estate  of  a  decedent  shall  hear  and  determine  in  said 


670  INHERITANCE  TAXATION 

probate  proceedings  all  questions  in  relation  to  any  tax  arising  under  the 
provisions  of  this  act:  (a)  Upon  property  passing  in  said  probate  proceed- 
ings, (b)  Upon  any  other  property  transferred,  within  the  meaning  of  sub- 
division three  of  section  two  or  any  other  provisions  of  this  act,  to  any  person, 
institution  or  corporation  taking  any  property  under  and  by  virtue  of  said 
probate  proceedings. 

§  16.  (1)  When  any  superior  court,  having  jurisdiction  in  probate  of  the 
estate  of  any  decedent,  or  a  judge  of  such  court,  shall,  in  accordance  with 
section  one  thousand  four  hundred  forty-four  of  the  Code  of  Civil  Pro- 
cedure, appoint  the  appraiser  or  appraisers  in  said  section  provided  for,  said 
superior  court  or  judge  thereof  shall  also  at  the  same  time  designate  and 
appoint  an  inheritance  tax  appraiser  (unless  such  designation  and  appoint- 
ment be  previously  made)  to  ascertain  and  report  to  said  superior  court  the 
amount  of  inheritance  tax  due  upon  any  property  passing  in  said  probate  pro- 
ceeding, or  a  lien  thereon,  or  upon  any  other  property  transferred  within  the 
meaning  of  subdivision  (3)  of  section  two  of  this  act,  or  under  any  other 
provision  of  this  act,  to  any  person,  institution  or  corporation  taking  property 
under  and  by  virtue  of  said  probate  proceedings,  together  with  such  other  or 
additional  information  as  shall  assist  said  court  in  the  determination  of  said 
tax.  Thereupon  said  inheritance  tax  appraiser  shall  have  all  the  powers  of  a 
referee  of  said  superior  court,  and  shall  have  jurisdiction  to  require  the 
attendance  before  him  of  the  executor  or  administrator  of  said  estate,  or  any 
person  interested  therein,  or  any  other  person  whom  he  may  have  reason  to 
believe  possesses  knowledge  of  the  estate  of  said  decedent,  or  knowledge  of  any 
property  transferred  by  said  decedent  within  the  meaning  of  this  act,  or 
knowledge  of  any  facts  that  will  aid  said  appraiser  or  the  court  in  the  deter- 
mination of  said  tax.  For  the  purpose  of  compelling  the  attendance  of  such 
person  or  persons  before  him,  and  for  the  purpose  of  appraising  any  property 
or  interest  subject  to,  or  liable  for  any  inheritance  tax  hereunder,  and  for 
the  purpose  of  determining  the  amount  of  tax  due  thereon,  the  said  inheritance 
tax  appraiser  is  hereby  authorized  to  issue  subpoenas  compelling  the  attend- 
ance of  witnesses  before  him.  Any  person  or  persons  who  shall  be  served  with 
a  subpoena  issued  by  said  inheritance  tax  appraiser,  to  appear  and  testify  or 
to  produce  books  and  papers,  and  who  shall  refuse  and  neglect  to  appear  and 
testify  or  to  produce  books  and  papers  relevant  to  such  appraisement,  as 
commanded  in  such  subpoena,  shall  be  guilty  of  a  contempt  of  court.  And  he 
may  examine  and  take  the  evidence  of  such  witnesses  or  of  such  executor  or 
administrator,  or  other  person  under  oath  concerning  such  property  and  the 
value  thereof,  and  concerning  the  property  or  the  estate  of  such  decedent 
subject  to  probate,  and  concerning  any  transfer  made  by  such  decedent  within 
the  meaning  of  this  act.  Upon  the  completion  of  his  inheritance  tax  appraise- 
ment in  any  probate  proceeding,  the  inheritance  tax  appraiser  shall  make  a 
report  in  writing  to  the  superior  court  of  the  clear  market  value  of  the 
several  interests  in  the  estate  of  the  decedent,  and  shall  report  the  amount  of 
inheritance  or  transfer  tax  chargeable  against,  or  a  lien  upon  such  interests, 
acquired  by  virtue  of  said  probate  proceedings  or  by  any  transfer  within  the 
meaning  of  this  act,  to  any  person,  institution  or  corporation  acquiring  any 
property  by  virtue  of  said  probate  proceedings  together  with  such  other  facts 
as  may  advise  the  court  in  regard  thereto,  or  which  the  court  may  require, 
and  may  return  to  said  superior  court  such  depositions  as  he  may  have  had 
reduced  to  writing,  exhibits,  or  other  testimony  or  information  taken  before 
him,  or  submitted  to  him. 

(2)  Upon  the  filing  of  said  report  said  appraiser  shall  mail  a  copy  thereof 
to  the  state  controller  and  the  clerk  of  said  superior  court  shall  on  said  day 
or  the  next  succeeding  judicial  day  give  notice  of  such  filing  to  all  persons 
interested  in  such  proceedings  by  causing  notices  to  be  posted  in  at  least  three 
public  places  in  the  county,  one  of  which  must  be  the  place  where  the  court 
is  held,  and  in  addition  thereto  shall  mail  to  the  state  controller  and  to  all 
persons  chargeable  with  any  tax  in  said  report  who  have  appeared  in  such 
proceeding,  a  copy  of  said  notice.  At  any  time  after  the  expiration  of  ten  days 
thereafter,  if  no  objection  to  said  report  be  filed,  the  said  superior  court  or  a 
judge  thereof,  may,  without  further  notice  give  and  make  its  order  confirming 


THE  STATE  STATUTES  671 

said  report  and  fixing  the  tax  in  accordance  therewith.  At  any  time  prior  to 
the  making  of  said  order,  any  person  interested  in  said  proceeding  (including 
the  state  controller)  may  file  objections  in  writing  to  said  report.  Thereupon 
said  superior  court  shall,  by  order,  fix  a  time,  not  less  than  ten  day  thereafter, 
for  the  hearing  thereof,  and  shall  direct  the  clerk  of  said  superior  court  to 
give  such  notice  thereof  as  it  shall  deem  necessary;  provided,  that  a  copy  of 
such  notice  and  of  such  objections  shall  be  forthwith  mailed  to  the  state  con- 
troller, county  treasurer  and  inheritance  tax  appraiser.  Upon  the  hearing  of 
said  objections,  said  court  may  make  such  order  as  to  it  may  seem  meet  and 
proper  in.  the  premises. 

( 3 )  If,  upon  examination  of  the  executor  or  administrator  of  said  estate  or 
other  persons  familiar  with  the  affairs  of  such  decedent,  or  from  other  infor- 
mation before  him,  it  shall  appear  to  the  inheritance  tar  appraiser  that  there 
is  no  inheritance  tax  due  out  of  said  estate  or  a  lien  upon  any  property  or 
interest  therein,  said  appraiser  may  so  certify  to  the  superior  court,  and  at 
any  time  thereafter,  if  no  objection  to  said  certificate  shall  have  been  filed, 
said  superior  court  or  a  judge  thereof  may,  without  further  notice,  make  an 
order  or  decree  that  there  are  no  inheritance  taxes  due  out  of  said  estate  or 
upon  any  interest  therein  or  may  make  such  different  order  as  may  to  it  seem 
meet  in  the  premises.  Such  order  shall  be  conclusive  only  as  to  such  property 
as  may  have  been  returned  in  the  inventory  or  inventory  and  appraisement  in 
said  probate  proceedings. 

§  17.  (1)  If  it  shall  appear  to  the  superior  court  upon  petition  of  the 
state  controller  that  any  transfer  has  been  made  within  the  meaning  of  this 
act,  and  the  taxability  thereof,  and  the  liability  for  such  tax  and  the  amount 
thereof  have  not  been  determined,  and  that  no  proceedings  are  pending  in 
eny  court  in  this  state  wherein  the  taxability  of  such  transfer  and  the 
liability  therefor  and  the  amount  thereof  may  be  determined,  said  court  shall 
issue  a  citation  ordering  and  directing  the  persons  who  may  appear  liable 
therefor  or  known  to  own  any  interest  in  or  part  of  the  property  transferred, 
to  appear  before  said  court  or  before  an  inheritance  tax  appraiser  to  be 
designated  by  said  order  at  a  time  and  place  in  said  order  named,  not  less 
than  ten  days  nor  more  than  one  year  from  the  date  of  such  order,  to  be 
examined,  tinder  oath  by  said  court  or  by  said  appraiser  as  the  case  may  be, 
concerning  said  transfer  and  all  facts  connected  therewith,  and  concerning  the 
property  transferred  and  the  character  and  value  thereof. 

If  said  person  or  persons  shall  be  directed  to  appear  before  said  appraiser 
said  appraiser  shall,  at  the  time  and  place  in  said  order  named,  or  at  such 
time  and  place  to  which  said  appraiser  may  adjourn  said  hearing,  proceed  to 
examine  said  person  or  persons  and  such  witnesses  as  said  appraiser  may  sub- 
poena before  him,  and  for  the  purpose  of  said  hearing,  and  for  the  purpose  of 
ascertaining  any  facts  concerning  the  taxability  of  said  transfer  or  any  taxes 
due  on  account  of  such  transfer,  said  appraiser  shall  have  the  powers  of  a 
referee  of  said  court,  and,  is  hereby  authorized  to  issue  subpoenas  compelling 
the  attendance  of  witnesses  before  him,  and  to  administer  oath,  and  to  take 
the  evidence  of  such  witnesses  under  oath  concerning  such  property  and  the 
value  thereof  and  concerning  such  transfer.  Said  appraiser  shall  report  to 
said  court  his  findings  and  conclusions  in  relation  to  said  transfer  and  said 
tax,  and  may  return  to  said  court,  any  depositions,  exhibits  or  other  testi- 
mony or  information  taken  before  him  or  exhibited  to  him.  The  procedure 
subsequent  to  the  filing  of  said  report  shall  conform  to  subdivision  (2)  of 
section,  sixteen  of  this  act. 

Except  as-  herein  otherwise  provided,  the  service  of  such  citation  and  the 
time,  manner  and  proof  thereof,  and  the  hearing  and  determination  thereon, 
and  the  hearing  and  determination  upon  the  facts  returned  in  such  report,  and 
the  enforcement  of  the  determination  or  decree,  shall  conform  to  the  provisions 
of  chapter  twelve,  title  eleven,  part  three  of  the  Code  of  Civil  Procedure,  and 
the  clerk  of  the  court  shall,  upon  the  request  of  the  state  controller,  furnish, 
without  fee,  one  or  more  transcripts  of  such  decree,  and  the  same  shall  be 
docketed  and  filed  by  the  county  clerk  of  any  county  in  the  state,  without 
fee,  in  the  same  manner  and  with  the  same  effect  as  provided  by  section  six 
hundred  seventy-four  of  said  Code  of  Civil  Procedure  for  filing  a  transcript  of 
an  original  docket. 


672  INHERITANCE  TAXATION 

The  superior  court  may  hear  the  said  cause  upon  the  relation  of  the  parties 
and  the  testimony  of  witnesses  and  evidence  produced  in  open  court,  and,  if 
the  court  shall  find  said  property  is  not  subject  to  any  tax,  as  herein  pro- 
vided, the  court  shall,  by  order,  so  determine;  but  if  it  shall  appear  that 
said  property,  or  any  part  thereof,  is  subject  to  any  such  tax,  the  same  shall 
be  appraised  and  taxed  as  in  other  cases. 

(2)  Verified  petitions   may?  be   filed,  by   any    interested    party   with   the 
superior  court  alleging  and  admitting  that  a  transfer  within  the  meaning  of 
this  act  has  been  made  and  the  taxability  thereof  and  the  liability  for  such 
tax  and  the  amount  thereof  have  not  been  determined,  and  that  no  proceed- 
ings are  pending  in  any  court  in  this  state  wherein  the  taxability  of  such 
transfer  and  the  liability  therefor  and  the  amount  thereof,  may  be  deter- 
mined, and  that  the  petitioner  desires  such  determination  and  desires  to  pay 
said  tax,  if  any  be  due.     Upon  the  filing  of  such  petition  the  superior  court 
or  a  judge  thereof  shall  by  order  designate  and  appoint  an  inheritance  tax 
appraiser  to  ascertain  and  report  to  said  court  the  amount  of  the  inherit-, 
ance  tax,  if  any,  due  by  said  petitioner  on  account  of  such  transfer,  and  shall 
fix  a  time  and  place,  not  less  than  ten  days  thereafter,  for  the  hearing  of 
said  matter  before  said  inheritance  tax  appraiser,  a  copy  of  which  petition 
and  order  shall  be  forthwith  mailed  to  the  state  controller,  and  shall  refer  said 
petition  and  said  matter  to  said  inheritance  tax  appraiser  who  shall  have 
all  of  the  powers  of  a  referee  of  said  court,  including  the  powers  prescribed 
in  subdivision  ( 1 )   of  section  sixteen  of  this  act.    The  procedure  subsequent 
to  said  reference  to  said  appraiser  shall  conform  to  the  provisions  of  sub- 
divisions ( 1 )   and   ( 2 )    of  section  sixteen  of  this  act. 

In  the  event  that  final  judgment  is  rendered  in  said  proceeding,  ascertain- 
ing and  determining  that  no  inheritance  tax  is  due  on  account  of  said 
transfer  or  that  the  amount  of  the  tax  to  which  said  transfer  is  liable, 
is  less  than  twenty  dollars  the  court  shall,  in  addition  to  the  amount 
of  the  tax,  if-  any,  include  in  such  judgment  and  assess  against  the  peti- 
tioner reasonable  compensation  for  said  inheritance  tax  appraiser,  not 
exceeding  the  sum  of  ten  dollars,  and  the  necessary  traveling  and  incidental 
expenses  of  said  appraiser. 

(3)  Actions  may  be  brought  against  the  state  by  any  interested  person 
for  the  purpose  of  quieting  the  title  to  any  property  against  the  lien  or  claim 
of  lien  of  any  tax  or  taxes  under  this  act,  or  for  the  purpose  of  having  it 
determined  that  any  property  is  not  subject  to  any  lien  for  taxes  nor  charge- 
able with  any  tax  under  this  act.    No  such  action  shall  be  maintained  where 
any  proceedings  are  pending  in  any  court  in  this  state  wherein  the  taxability 
of  such  transfer  and  the  liability  therefor  and  the  amount  thereof  may  be 
determined.     All  parties  interested   in   said  transfer   and   in  the  taxability 
thereof  shall  be  made  parties  thereto  and  any  interested  person  who  refuses 
to  join  as  plaintiff  therein  may  be  made  a  defendant.    Summons  for  the  state 
in  said  action  shall  be  served  upon  the  state  controller. 

At  any  time  after  issue  is  joined  in  such  action  the  court,  on  its  own 
motion,  or  upon  the  motion  of  any  interested  party,  may  by  order  appoint 
and  designate  an  inheritance  tax  appraiser  to  hear  said  matter  and  report 
to  the  court  thereon  and  shall  in  such  order  fix  a  time  and  place  for  the 
hearing  of  said  matter  before  said  inheritance  tax  appraiser,  and  direct 
notice  of  such  time  and  place  to  be  given  in  such  manner  as  the  court  shall 
deem  proper,  and  shall  refer  said  matter  to  said  inheritance  tax  appraiser 
who  shall  have  all  of  the  powers  of  a  referee  of  said  court,  including  the 
powers  prescribed  in  subdivision  (1)  of  section  sixteen  of  this  act.  The 
procedure  subsequent  to  said  reference  to  said  appraiser  shall  conform  to 
the  provisions  of  subdivisions  (1)  and  (2)  of  section  sixteen  of  this  act. 

Should  the  court  determine  that  the  property  described  in  the  complaint 
is  subject  to  the  lien  of  said  tax  and  that  said  property  has  been  transferred 
within  the  meaning  of  this  act,  the  court  shall  award  affirmative  relief  to 
the  state  in  said  action,  and  judgment  shall  be  rendered  therein  in  favor 
of  the  state,  ascertaining  and  determining  the  amount  of  said  tax,  and  the 
persons  or  persons  liable  therefor,  and  the  property  chargeable  therewith  or 
subject  to  lien  therefor,  and  shall  assess  against  such  person  or  persons  rea- 


THE  STATE  STATUTES  673 

sonable  compensation  for  said  inheritance  tax  appraiser  and  his  necessary 
traveling  and  incidental  expenses. 

(4)  Actions  under  this  section  shall  be  commenced  in  the  superior  court 
of  the  county  in  which  is  situated  any  part  of  any  real  property  against 
which  any  lien  is  sought  to  be  enforced,  or  to  which  title  is  sought  to  be 
quieted  against  any  lien,  or  claim  of  lien ;  but  if  in  said  action  no  lien  against 
real  property  is  sought  to  be  enforced,  the  action  shall  be  brought  in  the 
superior   court  of  the  county  which  has  or  which  had  jurisdiction  of  the 
administration  of  the  estate  of  the  decedent  mentioned  herein. 

(5)  Xo  fee  shall  be  charged,  said  state  controller  by  any  public  officer  in 
this  state  for  the  filing  or  recording  of  any  petition,  lis  pendens,  decree  or 
order,  or  for  the  taking  of  oaths   or  acknowledgments  in  any   proceeding 
taken  under  this  act ;  nor  shall  any  undertaking  be  required  from  or  costs 
charged  against  the  state  controller  or  the  State  of  California  in  any  such 
proceeding. 

§  18.  The  orders,  decrees  and  judgments  fixing  tax  or  determining  that 
no  tax  is  due,  mentioned  in  this  act,  shall  have  the  force  and  effect  of  judg- 
ments in  civil  actions.  Except  as  otherwise  herein  provided,  the  provisions 
of  the  Code  of  Civil  Procedure  relative  to  judgments,  new  trials,  appeals, 
attachments  and  execution  of  judgments,  so  far  as  applicable,  shall  govern, 
all  proceedings  taken  under  this  act.  Nothing  in  this  section  shall  preclude 
the  state  from  relief  herein  provided  for,  which  may  be  inconsistent  with, 
the  provisions  of  the  Code  of  Civil  Procedure. 

§  19.  The  treasurer  of  each  county  shall  collect  all  taxes  and  moneys  that 
may  be  due  and  payable  under  this  act  and  pay  the  same  to  the  state  treas- 
urer (excepting  such  moneys  as  he  may  pay  out  from  time  to  time  pursuant 
to  the  provisions  of  this  act)  and  the  state  treasurer  shall  give  him  a  receipt 
therefor;  of  which  collection  and  payment  he  shall  make  a  report,  under  oath, 
to  the  controller,  between  the  first  and  fifteenth  days  of  May  and  December 
•of  each  year,  stating  for  what  estate  paid,  and  in  such  form  and  containing 
such  particulars  as  the  controller  may  prescribe;  and  for  all  such  taxes 
collected  by  him  and  not  paid  to  the  state  treasurer  by  the  first  day  of  June 
and  January  of  each  year  he  shall  pay  interest  at  the  rate  of  ten  per  centum 
per  annum. 

§  20.  The  treasurer  of  each  county  shall  be  allowed  to  retain,  on  all  taxes 
paid  and  accounted  for  by  him  each  year  under  this  act,  in  addition  to  his 
salary  or  fees  now  allowed  by  law,  three  per  centum  of  the  first  fifty  thousand 
dollars  so  paid  and  accounted  for  by  him,  one  and  one-half  per  centum  on 
the  next  fifty  thousand  dollars  so  paid  and  accounted  for  by  him,  and  one- 
half  of  one  per  centum  on  all  additional  sums  so  paid  and  accounted  for  by 
him;  provided,  that  no  county  treasurer  shall  be  entitled  to  retain  to  his 
own  use  more  than  the  sum  of  two  hundred  dollars  out  of  the  inheritance 
taxes  paid  on  account  of  any  transfer  or  transfers  made  by,  or  resulting 
from  the  death  of,  any  one  decedent,  nor  more  than  five  thousand  dollars 
out  of  the  total  inheritance  taxes  accounted  for  in  any  one  year. 

§  21.  The  state  controller,  whenever  he  shall  be  cited  as  a  party  in  any 
proceeding  or  action  to  determine  any  tax  under  this  act  provided,  or  when- 
ever he  shall  deem  it  necessary  for  the  better  enforcement  of  this  act  to  make 
any  special  employment  to  secure  evidence  of  evasion  of  said  tax,  or  to  com- 
mence or  appear  in  any  proceeding  or  action  to  determine  any  tax  here- 
under,  may,  by  and  with  the  consent  and  approval  of  the  attorney -general, 
make  such  special  employment  or  designate  and  employ  counsel  or  attorney 
in  or  out  of  this  state  to  represent  him  on  behalf  of  the  state,  and,  by  and 
with  such  consent  of  the  attorney-general,  he  is  hereby  authorized  to  incur 
the  necessary  expense  for  such  employment  and  any  reasonable  and  neeessary 
expense  incident  thereto.  And  the  county  treasurer  is  hereby  authorized  and 
directed  to  pay  out  of  any  funds  which  may  be  in  his  hands  on  account  of 
this  tax,  on  presentation  of  a  sworn  itemized  account  and  on  certificate  of 
the  state  controller  and  attorney-general,  all  expenses  incurred  as  in  this 
section  above  provided,  but  no  expense  for  such  special  employment  or  legal 
services  up  to  and  including  the  entry  of  the  order  of  the  court  fixing 
the  tax  and  the  same  becoming  final,  shall  exceed  ten  per  centum  of  the 
22 


674  INHERITANCE  TAXATION 

tax  and  penalties  collected;  .'provided,  that  all  reasonable  and  necessary 
expenses  incurred,  in  any  legal  action  or  proceeding  in  any  court  of  this 
state  or  on  any  appeal  therefrom,  other  than  attorney's  fees*,  including 
expense  of  serving  processes  and  printing  and  preparing  of  necessary  legal 
papers,  may  be  allowed  and  paid  in  the  manner  above  provided,  even  though 
no  tax  be  recovered  in  such  action  or  proceeding,  and  the  limitations  herein 
made  shall  not  apply  thereto. 

§  22.  All  taxes  levied  and  collected  under  this  act,  up  to  the  amount  of 
two  hundred  fifty  thousand  dollars  annually,  shall  be  paid  into  the  treasury 
of  the  state,  for  the  uses  of  the  state  school  fund,  and  all  taxes  levied  and 
collected  in  excess  of  two  hundred  fifty  thousand  dollars  annually  shall  be 
paid  into  the  state  treasury  to  the  credit  of  the  general  fund  thereof. 

§  23.  Every  officer  who  fails  or  refuses  to  perform,  within  a  reasonable 
time,  any  and  every  duty  required  by  the  provisions  of  this  act,  or  who  fails 
or  refuses  to  make  and  deliver  within  a  reasonable  time  any  statement  or 
record  required  by  this  act,  shall  forfeit  to  the  State  of  California  the  sum  of 
one  thousand  dollars,  to  be  recovered  in  an  action  brought  by  the  attorney 
general  in  the  name  of  the  people  of  the  state  on  the  relation  of  the  controller. 

§  24.  If  any  section,  subsection,  sentence,  clause  or  phrase  of  this  act  is 
for  any  reason,  held  to  be  unconstitutional,  such  decision  shall  not  affect  the 
validity  of  the  remaining  portions  of  this  act.  The  legislature  hereby  declares 
that  it  would  have  passed  this  act,  and  each  section,  subsection,  sentence, 
clause  and  phrase  thereof,  irrespective  of  the  fact  that  any  one  or  more 
other  sections,  subsections,  sentences,  clauses  or  phrases  be  declared  uncon- 
stitutional. 

§  25.  An  act  entitled  "An  act  to  establish  a  tax  on  gifts,  legacies,  inherit- 
ances, bequests,  devises,  successions  and  transfers  to  provide  for  its  collection 
and  to  direct  the  disposition  of  its  proceeds ;  to  provide  for  the  enforcement  of 
liens  created  by  this  act  and  by  any  act  hereby  repealed  and  for  suits  to  quiet 
title  against  claims  of  liens  arising  hereunder  or  under  an  act  hereby  repealed 
to  be  known  as  the  '  inheritance  tax  act ';  to  repeal  an  act  entitled  'An  act  to 
establish  a  tax  on  gifts,  legacies,  inheritances,  bequests,  devises,  successions 
and  transfers,  to  provide  for  its  collection  and  to  direct  the  disposition  of  its 
proceeds;  to  provide  for  the  enforcement  of  liens  created  by  this  act  and  for 
suits  to  suiet  title  against  claims  of  liens  arising  hereunder;  to  repeal  an 
act  entitled  "An  act  to  establish  a  tax  on  gifts,  legacies,  inheritances,  bequests, 
devises,  successions  and  transfers;  to  provide  for  its  collection  and  to  direct 
the  disposition  of  its  proceeds ;  to  provide  for  the  enforcement  of  liens  created 
by  this  act  and  for  suits  to  quiet  title  against  claims  of  liens  arising  here- 
under"; to  repeal  an  act  entitled  "An  act  to  establish  a  tax  on  collateral 
inheritances,  bequests  and  devises,  to  provide  for  the  collection  and  to  direct 
the  disposition  of  its  proceeds,"  approved  March  23,  1893,  and  all  amend- 
ments thereto  and  to  repeal  all  acts  and  parts  of  acts  in  conflict  with  this 
act,  approved  March  20,  1905,  and  all  amendments  thereto,  and  all  acts  and 
parts  of  acts  in  conflict  with  this  act/  approved  April  7  1911";  approved 
June  16  1913,  and  all  amendments  thereto,  and  all  acts  and  parts  of  acts 
in  conflict  with  this  act  are  hereby  expressly  repealed;  provided,  however, 
that  such  repeal  shall  in  nowise  affect  any  suit,  prosecution  or  proceeding 
pending  at  the  time  this  act  shall  take  effect,  or  any  right  which  the  State  of 
California  may  have  at  the  time  of  the  taking  effect  of  this  act,  to  claim 
a  tax  upon  any  property  under  the  provisions  of  the  act  or  acts  hereby 
repealed,  for  which  no  proceeding  has  been  commenced,  and  where  no  pro- 
ceeding has  been  commenced  to  collect  any  tax  arising  under  any  act  hereby 
repealed  the  procedure  to  collect  such  tax  shall  conform  to  the  provisions 
hereof;  nor  shall  such  repeal  affect  any  appeal,  right  of  appeal  in  any  suit 
pending,  or  orders  fixing  tax,  existing  in  this  state  at  the  time  of  the  taking 
effect  of  this  act. 

Prior  Statutes:  L.  1893,  ch.  168;  L.1895,  ch.  28;  L.  1897,  ch.  83;  L.  1899, 
ch.  85  ;  L.  1903,  ch.  152  and  ch.  228  ;  L.  19O5,  chapters  85,  314,  325  ;  L.  1909,  ch. 
337 ;  L.  1911,  chapters  394  and  395;  L.  1913,  ch.  595  ;  L.  1915,  chapters  189  and  198. 


THE  STATE  STATUTES 


675 


COLORADO 

Taxes  all  property  of  nonresidents  within  the  state, 
TABLE  OF  GRADED  RATES 


CLASS  OB  RELATIONSHIP 

Exemp- 
tion 

Application  of  rates  to  value  of  inheritance 

Excess  of 
exemption 
to  $100,000 

$100.000                 All  in 
to                    excess  of 
$200,000              $200,000 

Father,  mother,  husband,  wife,  child, 
brother,  sister,  wife  or  widow  of  son, 
daughter's  husband,  adopted  or  mu- 
tually acknowledged  child  or  law- 
fully born  lineal  descendant. 

$10,000 

2% 

3%                          4% 

Up  to 
$10,000 

$10.000 
to 
$20,000 

$20.000 
to 
$50,000 

$50,000 
to 
$100,000 

All 
over 
$100,000 

Uncle,  aunt,  niece  or  nephew  or  lineal 
descendant  of  same. 

$500 

3% 

3% 

4% 

5% 

6% 

All  others  except  charities  exempted  by 
section  4. 

$500 

4% 

5% 

6% 

8% 

10% 

CHAPTER  136,  L.  1913,  BECAME  A  LAW  MAY  14,  1913. 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any 
property,  real,  personal  or  mixed,  or  of  any  interest  therein  or  income  there- 
from, in  trust  or  otherwise,  to  any  person  or  persons,  institution  or  corpora- 
tion except  as  hereinafter  exempted,  in  the  following  cases: 

(a)  When  the  transfer  is  by  will  or  by  intestate  laws  of  this  state,  from 
any  person  dying  seized  or  possessed  of  any  such  property  while  a  resident 
of  the  state. 

(6)  When  the  transfer  is  by  will  or  intestate  laws  of  property  within'  the 
state  and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his 
death. 

(c)  When  the  transfer  is  made  by  a  resident,  or  by  a  non-resident  when 
such  non-resident's  property  is  within  this  state,  by  deed,  grant,  bargain, 
sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or 
donor  or  intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such 
death;  provided  that  any  such  gift,  or  any  such  deed,  grant,  bargain  or  sale 
without  full  and  reasonable  consideration  and  value  made  within  one  year 
from  the  date  of  the  death  of  the  grantor  shall  be  deemed  and  held  to  have 
been  made  in  contemplation  of  the  death  of  the  grantor. 

(d)  When    any    person,    institution    or    corporation    becomes    beneficially 
entitled  in  possession  or  expectancy  to  any  property  or  the  income  therefrom, 
by  any  such  transfer,  whether  made  before  or  after  the  passage  of  this  act. 

(e)  Whenever  any  person,  institution  or  corporation  shall  exercise  a  power 
of  appointment  derived  from  any  disposition1  of  property  made  either  before 
or  after  the  passage  of  this  act,  such  appointment,  when  made,  shall   be 
deemed  a  taxable  transfer  under  the  provisions  of  this  act,  in  the  same  manner 
as  though  the  property  to  which  such  appointment  relates  belonged  absolutely 
to  the  donee  of  such  power  and  had  been  bequeathed  or  devised  by  such  donee 
by  will;  and  whenever  any  person,  institution,  or  corporation  possessing  such 
a  power  of  appointment  so  derived  shall  omit  or  fail  to  exercise  the  same 
within  the  time  provided  therefor,  in  whole  or  in  part,  a  transfer  taxable 
under  the  provisions  of  this  act  shall  be  deemed  to  take  place  to  the  extent 
of  such  omission  or  failure,  in  the  same  manner  as  though  the  persons  or  cor- 
porations thereby  becoming  entitled  to  the  possession  or  enjoyment  of  the 
property  to  which  such  power  related  had  succeeded  thereto  by  a  will  of  the 
donee  of  the  power  failing  to  exercise  power,  taking  effect  at  the  time  of  such 
omission  or  failure. 

NOTE. —  The  rest  of  this  section  fixes  the  rates  of  tax  and  exemptions  as 
shown  in  the  foregoing  table. 

§  2.  Provides  for  the  computation  of  the  value  of  life  estate  and  remainders 
upon  mortality  tables  on  basis  of  5  per  cent  and  for  the  immediate  payment 


676  INHERITANCE  TAXATION 

of  the  tax  on  remainders  unless  the  beneficiary  elects  to  file  a  bond  for  its 
payment  when  the  remainder  falls  in.  In  that  case  a  verified  inventory 
must  be  filed  with  the  county  judge  along  with  the  bond  within  a  year  after 
death  and  the  bond  must  be  renewed  every  five  years. 

§  3.  Provides  for  the  immediate  taxation  of  contingent  remainders  at 
highest  possible  rate  against  trustees  and  that  when  remainders  upon  which 
the  tax  has  been  suspended  shall  fall  in  they  shall  be  taxed  at  the  "  full 
undiminished  value "  following  the  N«w  York  statute.  It  provides  further 
that: 

"  Where  an  estate  for  life  or  for  years  can  be  divested  by  the  act  or  omis- 
sion of  the  legatee  or  devisee,  it  shall  be  taxed  as  if  there  were  no  possibility 
of  such  divesting." 

§  4.  The  following  transfers  of  property  shall  be  exempt  from  the  inherit- 
ance tax,  to  wit:  All  transfers  of  property  to  the  State  of  Colorado,  or  to 
any  county,  city,  town  or  any  other  municipality,  or  for  the  use  of  public 
libraries  for  religious  or  charitable  purposes  exclusively,  or  for  schools  and 
colleges  not  for  profit;  pi'ovided,  however,  that  the  same  be  situated  within 
this  state,  or  the  property  be  limited  for  use  within  this  state. 

§  5.  All  taxes  imposed  by  this  act,  shall  be  due  and  payable  at  the  death 
of  the  decedent,  except  as  hereinafter  provided.  If  such  tax  is  paid  within  six 
months  from  the  accruing  thereof,  a  discount  of  five  per  cent  shall  be  allowed 
and  deducted  therefrom.  If  such  tax  is  not  paid  within  one  year  from  the 
accruing  thereof,  interest  shall  be  charged  and  collected  thereon  at  the  rate 
of  ten  per  cent  per  annum  from  the  time  the  tax  accrued;  and  in  all  cases 
where  the  executors,  administrators  or  trustees  do  not  pay  such  tax  within 
one  year  from  the  death  of  the  decedent,  they  shall  upon  petition  of  the 
attorney-general  to  the  county  court,  be  required  to  give  a  bond  in  the  form 
and  to  the  effect  prescribed  in  section  2  of  this  act,  for  the  payment  of  said 
tax,  together  with  interest. 

§  6.  Requires  executors  or  administrators  to  deduct  the  tax  from  money 
legacies  or  shares,  to  collect  the  tax  from  beneficiary  of  any  specific  legacy  of 
property  before  delivery,  makes  the  tax  a  lien  on  real  estate  and  provides  for 
its  sale.  In  case  of  legacy  of  property  for  a  limited  period  he  shall  make 
an  application  to  the  court  if  necessary  to  apportion  the  tax  among  the 
beneficiaries. 

§  7.  Makes  executors  and  administrators  personally  liable  for  the  tax  and 
gives  power  of  sale  in  the  same  manner  as  to  pay  debts. 

§  8.  Requires  payment  of  tax  to  state  treasurer  who  gives  a  voucher 
which  must  be  produced  before  an  executor  or  administrator  is  entitled  to  a 
final  accounting. 

§  9.  Provides  that  no  tax  shall  be  paid  except  upon  an  assessment  order  from 
the  proper  county  court  and  for  fees  of  the  court  clerk  for  entering  the  order. 

§  10.  Requires  executors  and  administrators  to  file  with  the  attorney- 
general,  within  three  months  of  appointment,  a  sworn  statement  of  all  prop- 
erty of  the  deceased,  a  false  statement  being  perjury. 

§  11.  Provides  for  proportionate  refund  of  tax  on  legacies  where  debts  have 
been  proved  after  distribution  if  the  tax  has  not  been  paid  into  the  state 
treasury. 

§  12.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  transfer 
any  stock  or  obligations  of  any  domestic  or  foreign  corporation  doing  business 
within  this  state,  standing  in  the  name  of,  or  in  trust  for,  a  decedent,  resident 
or  non-resident,  not  exempt  from  taxation  under  section  one  hereof  the  tax 
shall  be  paid  to  the  state  treasurer  on  the  transfer  thereof.  No  corporation  or 
other  institution,  person  or  persons,  holding,  or  controlling  the  transfer  of 
securities  or  assets  of  a  decedent,  resident  or  non-resident,  nor  any  corporation 
in  which  such  decedent  held  stock  at  the  time  of  his  decease,  shall  deliver  or 
transfer  the  same  to  the  executors,  administrators,  trustees,  heirs  or  legatees 
of  said  decedent,  or  upon  their  order  or  request  unless  notice  in  writing  of  the 
time  and  place  of  such  intended  transfer  or  delivery  be  served  upon  the 
appraiser  appointed  under  this  act  at  least  ten  days  prior  to  such  transfer  or 
delivery;  nor  shall  any  corporation,  institution,  person  or  persons,  transfer  or 
deliver  any  securities  or  assets  of  the  estate  of  a  non-resident  decedent  without 


THE  STATE  STATUTES  677 

first  obtaining  the  written  consent  thereto  of  the  attorney-general  who  shall  as 
a  condition  of  such  consent,  require  that  a  sufficient  amount  or  portion  of  such 
security  or  assets  be  retained  to  pay  any  tax,  and  the  interest  thereon,  which 
may  thereafter  be  assessed  upon  the  transfer  of  such  property  under  the  pro- 
visions of  this  act  or  any  amendment  thereof.  And  it  shall  be  lawful  for  the 
said  appraiser  or  attorney-general  to  examine  said  securities  or  assets  at  the 
time  of  such  delivery  or  transfer.  Failure  to  serve  such  notice  or  to  allow 
such  examination  or  to  retain  a  sufficient  portion  or  amount  to  pay  such  tax 
and  interest  as  herein  provided,  shall  render  such  corporation  or  other  institu- 
tion, person  or  persons,  liable  to  the  payment  of  the  tax  and  interest  due  upon 
the  transfer  of  said  securities  or  assets,  in  pursuance  of  the  provisions  of 
this  act,  and  in  addition-  thereto,  or  in  the  absence  of  any  tax,  to  a  penalty  of 
one  thousand  dollars.  The  payment  of  such  tax  and  interest  and  penalty,  or 
either,  may  be  enforced  against  the  corporation,  institution  or  person  in  the 
same  way  as  the  liability  of  legatees,  or  legal  representatives,  or  may  be  col- 
lected by  a  civil  action  by  the  attorney-general  brought  in  any  court  of  compe- 
tent jurisdiction.  The  terms  "  corporation  "  and  "  institution  "  are  defined  to 
include  corporations  generally,  foreign  or  domestic,  which  are  qualified  to  do 
business  in  this  state,  and  also  all  banks,  trust  companies,  safe  deposit  com- 
panies or  other  corporate  or  non-corporate  institutions  occupying  fiduciary 
relations.  The  term  "  securities  or  assets  "  shall  include  stocks,  bonds,  notes, 
securities,  choses  in  action,  and  other  personal  property  or  the  evidence 
thereof;  and  as  applied  to  banks  or  similar  organizations  or  persons,  shall 
include  deposits  or  other  funds  or  papers  held  in  storage,  deposit  or  trust ;  and 
as  to  safe  deposit  companies,  the  contents  or  control  of  safe  deposit  boxes, 
and  aa  to  corporations  of  institutions  generally  shall  include  shares  in,  or 
registered  bonds  of,  or  other  interests,  in  the  corporation  or  institution  trans- 
ferring. Assets  or  securities,  including  safe  deposit  boxes,  shall  be  considered 
the  property  of  the  decedent  if  held  by  him  jointly  with  one  or  more  other 
persons,  or  in  any  other  qualified  or  limited  sense,  so  long  as  the  ownership 
possesses  a  pecuniary  or  proprietary  value. 

A  fee  of  ten*  dollars  shall  be  charged  and  collected  for  each  such  examina- 
tion, whether  such  transfer  be  found  to  be  taxable  or  not,  provided  that  only 
one  such  fee  shall  be  charged  against  any  estate.  Said  fee  shall  be  paid  into 
the  inheritance  tax  fund. 

§  13.  Provides  for  the  appointment  of  an  inheritance  tax  appraiser  and 
two  deputies  to  appraise  estates  upon  due  notice ;  for  an  appeal  to  the  county 
court  and  rehearing  and  for  a  further  appeal  to  the  district  court  upon 
filing  a  bond  to  pay  costs  if  the  appeal  be  taken  by  the  estate.  If  no  letters 
have  beer*  issued  within  sixty  days  from  death  the  attorney-general  may 
apply  for  them. 

§  14.  If  satisfied  that  an  estate  is  not  liable  to  tax  the  appraiser  may 
make  a  certificate  to  that  effect  which  is  binding  on  the  state  except  as  to 
after  discovered  property. 

§  15.  If  the  appraiser  fails  to  act  within  a  year  the  executor  or  adminis- 
trator who  has  duly  filed  his  sworn  statement  of  assets  may  move  on  due 
notice  to  the  attorney-general  and  the  appraiser  to  have  the  county  court 
appraise  the  estate  or  declare  it  exempt. 

§  16.  Provides  a  penalty  for  the  acceptance  of  a  fee  by  appraiser  or  his 
deputy. 

§  17.  Gives  jurisdiction  in  tax  proceedings  to  the  county  court  having 
probate  jurisdiction. 

§§18  and  19.  Provide  for  proceedings  by  the  attorney -general  to  collect 
delinquent  taxes. 

§  20.  Provides  for  quarterly  reports  by  county  judge  and  county  clerk  of 
estates  liable  to  tax. 

§  21.  Requires  the  secretary  of  state  to  furnish  the  county  courts  with 
books  for  the  keeping  of  transfer  tax  records. 

§  22.  Eequires  the  state  treasurer  to  furnish  copy  of  receipts  of  transfer 
taxes  on  payment  of  a  fee  of  fifty  cents. 

§  23.  Authorizes  the  attorney-general  to  file  a  caveat  in  any  proceeding 
pending  for  the  settlement  of  an  estate  where  he  thinks  a  transfer  tax  may 


678 


INHERITANCE  TAXATION 


be  due  in  which  case  no  decree  can  be  entered  unless  the  tax  receipt  is 
produced. 

§  24.  Provides  for  the  appointment  of  a  special  guardian  for  an  infant  in 
transfer  tax  proceedings. 

§  25.  Provides  that  the  attorney-general  and  state  treasurer  may  com- 
promise uncertain  and  unliquidated  tax  claims. 

§  26.  The  attorney-general  with  the  approval  of  the  governor,  state  treas- 
urer and  auditors  may  expend  not  to  exceed  $2,000  a  year  for  information  from 
persons  outside  the  state  regarding  transfers  taxable  under  Colorado  statute. 

§  27.  All  acts  and  .parts  of  acts  in  conflict  herewith  are  hereby  repealed ; 
provided,  however,  that  this  act  shall  not  operate  to  release  or  waive  or 
otherwise  alter  any  tax  or  taxes  which  may  be  approved  under  the  provisions 
of  any  prior  act. 

§  28.  The  general  assembly  hereby  declares  this  law  is  necessary  for  the 
immediate  preservation  of  the  public  safety. 

§  29.  In  the  opinion  of  the  general  assembly  an  emergency  exists,  therefore 
this  act  shall  be  in  full  force  and  effect  from  and  after  its  passage. 

Prior  statutes:  L.  1901,  ch.  94;  L.  1902,  ch.  3;  L.  1907,  ch.  214;  L.  1909, 
ch.  193. 

CONNECTICUT 

Taxes  real  estate  and  tangible  property  within  the  state  of  nonresidents 
with  distributive  shares  and  exemptions  proportioned  to  the  entire  estate. 

TABLE  OF  GRADED  RATES  AS  TO  RESIDENT 


Exemp- 

In excess 

tion, 

of 

CLASS  OB  RELATIONSHIP 

only  one 

exemp- 

$25,000 

$50,000 

$250,000 

In  excess 

allowed 

tion 

to 

to 

to 

of 

to  each 

up  to 

$50,000 

$250,000 

$1,000,000 

$1,000,000 

class 

$25,000 

CLASS  A 

Parent,  grandparent,  husband, 

$10,000 

1% 

1% 

2% 

3% 

4% 

wife,      lineal      descendant, 

adopted  child,  adoptive  par- 
ent, and  lineal  descendant 

of  adopted  child. 

CLASS  B 

Husband  or  wife  or  a  child, 

$3,000 

3% 

5% 

6% 

7% 

8% 

any   dtep-child,   brother   or 

sister  of  the  half  or  ull  blood 

and  the  descendants  of  such 

brother  or  sister. 

CLASS  C 

All  others  

$500 

5% 

5% 

6% 

7% 

8% 

Except  charitable  exemptions 

prescribed  by  section  3. 

NOTE. —  As  to  non-residents,  vide  section  7. 

CHAPTER  332,  L.  1915,  BECAME  A  LAW  MAY  19,  1915. 

(As  amended  by  chap.  356,  L.  1917.) 

SECTION  1 .  The  words  "  choses  in  action,"  as  used  in  this  act,  shall  include 
deposits  in  banks,  bonds,  notes,  credits  and  evidence  of  debt  but  shall  not 
include  shares  of  stock  of  any  corporation. 

§  2.  An  inventory  of  all  the  property  of  every  deceased  person  and 
insolvent  debtor  except  real  estate  situate  outside  the  state  of  Connecticut 
duly  appraised,  shall  be  made  and  sworn  to  by  the  executor,  administrator  or 
trustees  and  by  him  filed  in  the  probate  court  having  jurisdiction  of  the 
estate  of  such  deceased  person  or  insolvent  debtor  within  two  months  after 
the  acceptance  of  the  bond  or  other  qualification  of  such  fiduciary  provided 


THE  STATE  STATUTES  679 

the  inventory  and  appraisal  of  the  estate  of  any  non-resident  decedent  shall 
include  only  such  interest  as  such  decedent  had  at  the  time  of  his  death  in 
real  estate  and  tangible  personal  property  situated  in  this  state.  Such  court 
may,  for  cause  shown,  extend  the  time  of  filing  such  inventory  to  not  exceed- 
ing four  months  from  the  qualification  of  the  fiduciary.  Such  inventoried 
property  shall  be  appraised  at  its  fair  market  value  by  two  or  more  disinter- 
ested persons  under  oath,  appointed  by  such  court.  Whenever  the  estate  of 
any  deceased  person  consists  only  of  cash  on  hand  or  on  deposit  in  banks,  or 
both,  no  appraisal  thereof  need  be  made  and  the  fiduciary  shall  enter  in  the 
inventory  the  amount  of  such  cash  and  such  deposits  as  the  value  thereof.  If 
any  fiduciary  shall  fail  to  file  in  such  court  an  inventory  and  appraisal  as 
hereinbefore  required  within  the  time  limited  as  aforesaid,  such  court  may 
cite  such  fiduciary  to  appear  at  a  time  and  place  therein  stated  and  show 
cause  why  he  should  not  be  removed,  and  unless  sufficient  cause  be  shown  and 
an  inventory  and  appraisal  be  forthwith  filed,  such  court  shall  remove  such 
fiduciary  and  appoint  a  successor  to  complete  the  administration  of  such 
estate.  If  the  estate  of  any  deceased  person  be  appraised  for  more  than  five 
hundred  dollars  the  court  of  probate  shall,  within  ten  days  after  the  filing 
in  such  court  of  such  inventory  or  appraisal,  cause  a  certified  copy  of  the 
same,  with  the  address  of  the  fiduciary  endorsed  thereon,  to  be  delivered  to 
the  tax  commissioner.  Within  sixty  days  after  the  receipt  of  such  copy  by 
the  tax  commissioner,  he  or  any  party  interested  may  file  in  such  court  a 
statement  in  writing  setting  forth  in  detail  such  objections  as  he  may  have 
to  the  acceptance  of  such  inventory  or  appraisal  and  at  the  same  time  shall 
send  a  copy  thereof  to  the  executor  or  administrator,  and  if  such  objection  be 
filed  by  the  executor,  administrator  or  an  interested  party,  a  copy  shall  be  at 
the  same  time  sent  to  the  tax  commissioner  by  the  person  filing  such  objection. 
Upon  the  filing  of  such  objection,  such  court  shall  order  a  hearing  on  the 
acceptance  of  such  inventory  and  appraisal  to  be  had  within  sixty  days  and 
not  less  than  fifteen  days  thereafter,  and  cause  notice  of  the  time  and  place 
of  such  hearing  to  be  forthwith  given  to  the  tax  commissioner  and  the 
executor  or  administrator  of  the  estate.  Such  court  upon  such  hearing  shall 
hear  such  objections  and  determine  the  fair  market  value  of  any  inventoried 
property,  the  appraised  value  of  which  has  been  objected  to,  and  may  order 
such  executor,  administrator  or  trustee  to  amend  such  inventory  or  appraisal 
in  any  way  that  it  shall  find  proper,  and  may  accept  the  same  as  amended. 
If  no  objection  to  such  inventory  or  appraisal  be  filed  as  aforesaid,  such 
inventory  and  appraisal  may  thereupon  be  accepted  by  such  court.  Such  court 
may  tax  the  costs  incident  to  the  proceedings  on  the  filing  of  such  objections, 
whether  the  same  be  heard  or  withdrawn,  in  favor  of  the  prevailing  party. 
The  court  of  probate  shall,  within  ten  days  after  the  filing  of  the  inventory  of 
any  estate  of  the  appraised  value  of  more  than  ten  hundred  dollars,  file  with 
the  tax  commissioner  a  certified  copy  of  the  application  for  administration  or 
probate  of  the  will  of  such  decedent,  with  a  certified  copy  of  the  will.  If,  in 
the  opinion  of  the  judge  of  said  court,  any  estate  is  not  subject  to  succession  or 
inheritance  tax,  he  shall  send  to  the  tax  commissioner  with  the  copy  of  the 
inventory,  a  certificate  to  that  effect,  setting  forth  his  reasons  therefor,  and 
unless  the  tax  commissioner  shall,  within  sixty  days  after  the  filing  of  such 
certificate,  as  hereinbefore  provided,  file  an  objection  to  such  certificate,  no  tax 
shall  be  due  from  the  estate  inventoried  as  aforesaid,  unless  the  appraised 
value  of  any  item  of  the  inventory  be  increased  or  additional  property  be 
thereafter  discovered.  The  court  of  probate  may,  at  any  time,  correct  an 
error  or  mistake  in  such  certificate.  The  value  of  the  estate  as  set  forth  in 
the  accepted  inventory  of  an  estate  shall  be  the  basis  for  computing  the  suc- 
cession or  inheritance  tax.  [As  amended  by  ch.  356,  L.  1917.] 

§  3.  All  property  owned  by  any  resident  of  this  state  at  the  time  of  his 
decease,  and  all  real  estate  and  tangible  personal  estate,  not  including  stocks, 
bonds  and  choses  in  action  within  this  state  owned  by  a  non-resident  at  the 
time  of  his  decease,  which  shall  pass  by  will  or  by  the  provisions  of  the  general 
statutes  relating  to  the  distribution  of  intestate  estates,  and  all  such  prop- 
erty of  any  decedent  which  shall  pass  by  deed,  grant  or  gift,  made  in  con- 
templation of  the  death  of  the  grantor  or  donor,  or  intended  to  take  effect  in 


INHERITANCE  TAXATION 

possession  or  enjoyment  at  the  death  of  such  grantor  or  donor,  shall  be  liable 
to  a  tax  as  hereinafter  provided.  All  property  passing  to  or  in  trust  for  the 
benefit  of  any  corporation  or  institution  located  in  this  state  which  receives 
state  aid,  or  for  the  use  of  a  municipal  corporation  for  public  purposes  within 
this  state,  and  all  gifts  of  paintings,  picture  books,  engravings,  bronzes,  curios, 
bric-a-brac  arms  and  armor,  and  collections  of  articles  of  public  interest, 
passing  to  any  corporation  or  institution  located  in  this  state  for  preserva- 
tion and  free  exhibition,  shall  be  exempt  from  such  tax.  The  provisions  of 
this  section  shall  not  apply  to  real  estate  situated  without  the  state  of 
Connecticut.  [As  amended  by  chap.  356,  L.  1917.] 

§  4.  Provides  that  the  court  of  probate  shall  have  jurisdiction  in  transfer 
tax.  matters. 

§  5.  The  net  estate  for  taxation  purposes  shall  be  ascertained  by  adding  to 
the  appraised  value  of  the  inventoried  estate  -all  gains  made  in  reducing  choses 
in  action  to  possession,  except  income  accruing  after  death,  and  deducting 
therefrom  the  amount  of  claims  paid,  all  funeral  expenses  and  expenses  of 
administration,  allowance  made  for  the  support  of  widow  and  family  of  the 
decedent  during  the  settlement  of  the  estate,  the  amount  at  death  of  all  unpaid 
mortgages  not  deducted  in  the  appraisal  of  property  mortgaged,  and  losses 
incurred  during  the  settlement  of  the  estate  in  the  reduction  of  choses  in 
action  to  possession,  provided  no  such  deduction  shall  be  made  for  allowance 
for  support  of  widow  and  family  beyond  the  date  upon  which  the  tax  hereby 
imposed  becomes  payable. 

§  6.  Prescribes  the  graded  rates  and  exemptions  given  in  the  foregoing 
table. 

§  7.  When  any  real  estate  or  tangible  personal  property  in  this  state  of 
any  non-resident  shall  pass  by  such  gift,  devise,  bequest,  or  under  the  pro- 
visions of  the  general  statutes  relating  to  distribution  of  intestate  estates,  the 
court  of  probate  having  jurisdiction  thereof  shall  ascertain  the  proportion  of 
the  estate  of  such  nonresident  decedent,  wherever  situated,  passing  to  each  of 
such  three  classes,  and  shall  compute  such  tax  as  if  the  real  estate  or  tangible 
personal  property  on  which  such  tax  is  based  passed  to  the  classes  referred  to 
in  the  same  proportion,  but  only  such  percentage  of  the  exemptions  provided 
for  in  section  six  shall  apply  as  the  estate  of  such  non-resident  in  this  state 
is  of  the  entire  estate. 

§  8.  Provides  that  where  there  is  a  life  estate  annuity  or  limited  term 
with  remainder  over  that  the  tax  shall  be  assessed  as  of  the  class  to  which 
the  life  tenant  belongs' and  paid  on  that  basis.  When  the  remainder  falls  in 
if  the  remainderman  is  in  a  class  taxed  at  a  higher  rate  he  must  pay  the 
excess,  if  at  a  lower  rate  the  state  refunds  the  excess  without  interest.  The 
remainderman  is  not  charged  interest  when  he  pays  the  excess  within  two 
months.  The  probate  judge  having  jurisdiction  must  certify  to  the  state  treas- 
urer within  ten  days  when  the  termination  of  any  life  estate  comes  to  hi» 
knowledge. 

§  9.  Each  administrator,  executor  or  trustee  shall,  and  the  tax  commis- 
sioner or  any  persorf  interested  may  apply  to  such  court  to  ascertain  the 
amount  of  the  tax  upon  any  gift,  devise,  bequest  or  inheritance  and  such 
court  shall  prepare  a  proposed  decree  stating  the  amount  of  such  estate  as 
appraised,  the  gains,  the  deductions,  the  name  and  relationship  to  the 
decedent  of  each  beneficiary,  donee,  grantee,  heir  or  distributee  the  value  of 
the  taxable  state  passing  to  each  class  of  beneficiaries,  the  amount  of  each 
exemption  and  the  reason  therefor,  and  the  amount  of  tax  payable  by  each 
beneficiary,  and  the  rate  and  amount  of  the  tax  on  the  estate  passing  to  each 
class,  and  shall  assign  a  time  and  place  for  hearing  such  application  not  less 
than  two  nor  more  than  four  weeks  after  such  assignment  and  shall  cause  a 
copy  of  such  proposed  decree  and  the  order  of  hearing  thereon  to  be.  sent  to 
the  tax  commissioner  and  a  like  copy  thereof  to  the  administrator, 
executor  or  trustee  of  such  estate  at  least  two  weeks  before  the  time 
of  such  hearing.  Such  court  may  cause  notice  of  the  time  and  place  of 
such  hearing  to  be  given  to  other  persons  interested  in  such  manner  as  it 
shall  direct.  The  tax  commissioner  of  any  person  interested  may  appear 
before  such  court  at  such  hearing  and  be  heard  concerning  such  decree.  Such 


THE  STATE  STATUTES  681 

court  shall  determine  the  amount  of  such  tax  and  shall  enter  a  decree  for 
such  amount  in  the  form  of  such  proposed  decree.  If  there  shall  be  no  appear- 
ance on  behalf  of  the  tax  commissioner,  and  it  shall  appear  to  the  court  that 
such  proposed  decree  ought  to  be  modified,  such  hearing  shall  be  adjourned 
for  not  less  than  ten  days  and  notice  of  the  time  and  place  of  such  adjourned 
hearing  and  of  the  changes  to  be  made  in  such  proposed  decree  shall  be  given 
to  the  tax  commissioner,  who  may  appear  and  be  heard  thereon.  At  such 
adjourned  hearing  the  court  may  enter  a  final  decree  determining  the  amount 
of  such  tax,  which  shall  be  conclusive  upon  the  state  and  persona  interested 
unless  appeal  shall  be  taken  as  provided  for  appeals  from  other  decrees  and 
orders  of  such  court.  Such  court  shall  issue  a  certificate  to  the  state  treasurer 
of  the  amount  of  such  tax.  In  all  cases  where  such  court  modifies  the  pro- 
posed decree  the  judge  of  such  court  shall  cause  a  copy  of  the  final  decree  to 
be  forwarded  to  the  tax  commissioner.  [As  amended  ch.  3o6,  L.  1917.'] 

§  10.  Such  tax  shall  be  paid  to  the  state  treasxirer  within  fourteen  months 
after  the  death  of  the  donor,  grantor,  testator  or  intestate,  by  the  administra- 
tor, executor  or  trustee,  provided  the  court  of  probate  may,  after  hearing,  on 
the  application  of  the  administrator,  executor  or  trustee,  made  and  filed  with 
such  court  at  or  before  the  expiration  of  said  fourteen  months,  extend  the 
time  for  the  payment  of  such  tax  or  any  part  thereof;  such  application  shall 
set  forth  the  extension  desired  and  the  reason  therefor,  and  a  copy  of  the 
same  shall  be  mailed  to  the  tax  commissioner  at  least  six  days  before  the 
date  of  such  hearing;  such  court,  after  such  hearing,  shall  forthwith  send 
to  the  tax  commissioner  a  copy  of  any  order  extending  the  time  for  the  pay- 
ment of  such  tax  or  any  part  thereof.  Except  as  otherwise  provided  by  this 
act  or  by  the  provisions  of  a  will,  such  tax  shall  be  paid  from  the  property 
passing  to  the  donee,  beneficiary  or  distributee,  unless  such  recipient  shall 
pay  to  the  executor,  administrator  or  trustee  the  amount  thereof.  Only  one 
exemption  as  herein  provided  shall  be  allowed  to  each  class,  and  each  bene- 
ficiary or  distributee  of  the  same  class  shall  pay  such  percentage  of  the  tax 
on  property  passing  to  such  class  as  his  share  is  of  such  property.  The  tax 
to  be  paid  by  a  life  tenant  or  limited  term  or  annuitant  shall  be  such  per- 
centage of  the  whole  tax  on  property  passing  to  persons  of  the  same  class  aa 
the  portion  of  the  principal  of  the  estate  which  such  tenant  for  life,  or  limited 
term  or  annuitant  has  the  use  of  is  of  the  net  taxable  estate  passing  to  such 
class.  Any  executor,  administrator  or  trustee  may  sell,  in  such  manner  as  the 
court  of  probate  shall  order,  such  portion  of  any  property  passing  to  any  bene- 
ficiary or  distributee  as  may  be  necessary  to  pay  such  tax  and  the  expense  of 
sale,  unless  such  beneficiary  or  trustee  shall  pay  the  amount  of  such  tax  to 
the  administrator,  executor  or  trustee.  [As  amended  by  chap.  356,  L.  1917.] 

I  11.  Fixes  the  rate  of  interest  on  unpaid  taxes  at  nine  per  cent  from  date 
when  due.  Receipt  of  state  treasurer  must  be  produced  before  any  final 
accounting  allowed.  Where  the  computation  of  the  tax  is  extended  or  post- 
poned the  tax  commissioner  with  the  approval  of  the  attorney-general  may 
compromise  the  amount  of  the  tax  with  the  estate,  and  payment  of  the  sum 
agreed  satisfies  the  tax. 

§  12.  All  gifts  of  real  or  personal  estate  by  deed,  grant,  or  other  conveyance 
made  in  contemplation  of  death,  or  to  take  effect  in  possession  or  enjoyment 
upon  the  death  of  the  grantor  or  donor,  shall  be  testamentary  gifts  within  the 
meaning  of  this  act,  for  taxation  purposes,  and  all  property  conveyed  to  so 
take  effect  shall  be  subject  to  the  tax  imposed  by  the  provisions  of  this  act. 
Executors  and  administrators  shall  forthwith  inventory  such  property,  and 
the  computation  of  such  tax  shall  be  made  as  herein  provided.  No  executor, 
administrator,  trustee,  or  bailee,  having  possession  of  property  so  conveyed  or 
given,  or  of  any  deed,  grant,  conveyance  or  other  evidence  of  such  transfer, 
gift,  or  alienation  of  property  so  conveyed  or  given,  shall  deliver  the  same 
until  such  property  has  been  inventoried  and  appraised,  and  such  inventory 
and  appraisal  accepted  by  the  court.  If  no  person  interested  shall  apply  for 
letters  of  administration  within  thirty  days  after  the  death  of  any  intestate, 
the  tax  commissioner  may  apply  to  the  court  for  the  appointment  of  an 
administrator,  and  after  notice  and  hearing  such  court  may  appoint  an 
administrator. 


682 


INHERITANCE  TAXATION 


§  13.  Whenever  any  person  shall  exercise  a  power  of  appointment  created 
by  a  will  hereafter  admitted  to  probate,  or  shall  by  will  exercise  a  power  of 
appointment  derived  from  any  disposition  of  property  made  either  before  or 
after  the  passage  of  this  act,  such  appointment,  when  made,  shall  be  deemed 
to  be  a  disposition  of  property  by  the  person  exercising  the  power  taxable 
tinder  the  provisions  of  this  act  in  the  same  manner  as  though  the  property 
to  which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such 
power,  and  had  been  bequeathed  and  devised  by  the  donee  by  will ;  and  when- 
ever any  person  possessing  such  power  of  appointment  shall  omit  or  fail  to 
exercise  the  same  within  the  time  provided  therefor,  in  whole  or  in  part,  a 
disposition  of  property  taxable  under  the  'provisions  of  this  act  shall  be 
deemed  to  take  place  to  the  extent  of  such  omission  or  failure  in  the  same 
manner  as  though  the  persons  and  corporations  thereby  becoming  entitled  to 
the  possession  or  enjoyment  of  property  to  which  such  power  related  had 
succeeded  thereto  by  a  will  of  the  donee  of  the  power  failing  to  exercise  the 
same,  J/aking  effect  at  the  time  of  such  omission  or  failure. 

§  14.  Provides  for  the  filing  of  exemplified  copies  of  a  will  found  in  another 
state  conveying  property  situated  in  this  state. 

§  15.  Chapter  152  of  the  public  acts  of  1905  and  chapter  73  of  the  public 
acts  of  1913  are  hereby  repealed. 

§  16.  This  act  shall  take  effect  from  its  passage  and  shall  apply  to  estates 
of  all  persons  whose  death  occurs  thereafter  and  to  estates  vesting  by  the 
exercise  of  any  power  of  appointment  or  upon  the  death  of  any  grantor  or 
donor  occurring  subsequent  to  the  passage  of  this  act. 

Prior  Statutes:  L,.  1889,  ch.  180;  !•.  1893,  ch.  257;  Lr.  1897,  ch.  201;  L.  1901, 
ch.  123;  L.  1903,  ch.  63;  L.  1905,  ch.  256;  L.  1907,  ch.  179;  L,.  1909,  ch.  218; 
I*.  1911,  ch.  204;  L,.  1913,  ch.  231. 

DELAWARE. 

New  statute,  approved  March  24,  1917,  taxes  all  property  of  non- 
residents within  the  state  except  stock  in  Delaware  corporations. 

From  March  26,  1909, -to  March  24,  1917,  taxed  all  property  of  non- 
residents within  the  state  on  transfers  to  collaterals  and  strangers  only. 

TABLE  OF  RATES  AND  EXEMPTIONS  SUBSEQUENT  TO  MARCH  24,  1917 


RATES 

OF  TAX 

CLASS  OB  RELATIONSHIP 

Exemp- 
tion 

Above 
exemp- 
tion to 
$30,000 

$30,000 
to 
$100,000 

$100,000 
to 
$200,000 

In  excess 
of 
$200,000 

Parent,  grandparent,  husband,  wife, 
child  by  _birth  or  legal  adoption, 
daughter-in-law,  son-in-law,  lineal 
descendant. 

$3,000 

1% 

2% 

3% 

4% 

Above 
exemp- 
tion to 
$25,000 

$25,000 
to 
$100,000 

Brother  or  sister,  either  of  the  whole 
or  half  blood  of  descendants,  of 
descendant's  parent  or  grandparent, 
or  any  lineal  descendant  of  the  same. 

$1,000 

2% 

3% 

4% 

8% 

On  all 
up  to 
$25,000 

$25,000 
to 
$100,000 

5% 

6% 

7% 

8% 

tional,  historical  or  religious  so- 
cieties, or  institutions,  cities  or 
towns  for  public  improvement, 
school  districts  or  library  commis- 
sions. 

THE  STATE  STATUTES 


683 


The  present  act  approved  March  24,  1917. 

The  amendment  of  1917  after  changing  the  title  of  the  prior  statute  from 
"Collateral  Inheritance  Tax"  to  "Inheritance  Tax,"  provides: 

146.  §  109.  Property  subject  to;  rates;  exemptions.  All  property  within 
the  jurisdiction  of  this  state,  real  and  personal,  and  every  estate  and  interest 
therein,  whether  belonging  to  residents  or  non-residents  of  this  state,  (except 
shares  of  the  capital  stock  of  corporations  created  under  the  laws  of  this  state 
when  owned  by  persons  without  this  state)  which  passes  by  will,  or  by  the 
intestate  laws  of  this  state,  or  by  deed,  grant,  gift,  or  settlement  (except  in 
cases  of  a  bona  fide  purchase  for  full  consideration  in  money  or  money's 
worth)  made  in  contemplation  of,  or  intended  to  take  effect  in  possession  or 
enjoyment  after,  the  death  of  the  grantor,  donor,  or  settlor,  to  any  person,  or 
persons,  bodies  politic,  or  corporate,  in  trust  or  otherwise,  shall  be  subject  to 
taxation  as  follows: 

The  act  then  fixes  the  rates  and  exemptions  as  shown  in  the  foregoing  table. 

The  statute  then  provides  as  follows: 

"Any  transfer  of  a  material  part  of  the  property  of  a  decedent  in  the  nature 
of  a  final  disposition  or  distribution  thereof,  made  by  the  decedent  within 
two  years  prior  to  his  death  without  full  consideration  in  money  or  money's 
worth,  shall,  imless  shown  to  the  contrary,  be  deemed  to  have  been  made 
in  contemplation  of  death  within  the  meaning  of  this  chapter. 

§  2.  That  said  chapter  6  be  and  the  same  is  hereby  further  amended  by  re- 
pealing "152,  Sec.  115"  thereof,  and  inserting  in  lieu  thereof  the  following 
new  "  152,  Sec.  115": 

152.  §  115.  Register  of  wills;  returns  by  of  tax  collected,  to  state  treas- 
urer; accounting  by;  commissions  of;  liability  upon  bond  of;  removal  from 
office,  when :  It  shall  be  the  duty  of  the  several  registers  of  wills  in  the  state, 
to  make  return,  under  oath  to  the  state  treasurer,  on  the  first  days  of  Janu- 
ary, April,  July  and  October,  in  each  year,  or  within  thirty  days  thereafter, 
of  all  sums  of  money  received  by  them  as  taxes  under  the  provisions  of  said 
sections  109  to  115  inclusive,  of  this  chapter,  and  to  pay  over  to  said  state 
treasurer  the  amounts  so  by  them  received  respectively,  at  the  time  of  making 
such  returns,  and  if  any  register  of  wills  shall  fail  to  pay  over,  as  required  by 
this  section,  the  state  treasurer  shall  give  notice  to  the  attorney  general  of 
the  state,  whose  duty  it  shall  be  to  institute  suit  on  the  official  bond  of  such 
register  of  wills,  for  the  use  of  the  state,  to  recover  the  amount  due  from  such 
register  of  wills,  and  in  such  suit  the  amount  appearing  to  be  due,  with  inter- 
est thereon,  and  costs,  shall  be  recovered,  which  recovery  shall  be  evidence  of 
misbehavior  in  office,  and  upon  conviction  thereof  such  register  of  wills  shall 
be  removed  from  office. 

THE  PRIOR  STATUTE 
TABLE  OF  RATES  AND  EXEMPTIONS  FROM  MARCH  26,  1909,  TO  MARCH  24,  1917 


CLASS  OR  RELATIONSHIP 

Exemption 

Rate  of  tax 

Father,  mother,  grandfather,  grandmother,  wife,  husband, 
child  by  birth  or  legal  adoption  or  lineal  descendants. 

All 

No  tax. 

Brother,  sister  or  their  descendants  

500 

1%  on  all  in  excess  of 

exemption. 

Brother  or  sister,  either  of  the  whole  or  half  blood  of  the 
decedent's  parents  or  their  descendants. 

500 

2%  on  all  in  excess  of 
exemption. 

Brother  or  sister  either  of  the  whole  or  half  blood  of  the 
decedent's  grandparents  or  their  descendants. 

500 

3%  on  all  in  excess  of 
exemption. 

All  others  except  charitable  corporations  specified  in  sec- 
tion 1. 

500 

5%  on  all  in  excess  of 
exemption. 

684  INHERITANCE  TAXATION 

LAWS  OF  1909,  CHAPTER  225,  AS  AMENDED  BY  L.  1913,  BECAME  A 
LAW  MARCH  26,  1909. 

Section  1.  All  property  within  the  jurisdiction  of  this  state,  real  and  per- 
sonal, and  every  estate  and  interest  therein,  whether  belonging  to  inhabitants 
of  this  state  or  not,  which  shall,  after  the  approval  of  this  act,  pass  by  will,  or 
by  the  intestate  laws  of  this  state,  or  by  deed,  grant  or  gift  ( except  in  cases  of 
a  bona  fide  purchase  for  full  consideration  in  money  or  money's  worth,  made  or 
intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of  the 
grantor  or  donor,  to  any  person  or  persons,  bodies  politic  or  corporate,  in  trust 
or  otherwise, 

NOTE. —  The  section  then  fires  the  rates  and  exemptions  as  shown  in  the  above 
table. 

The  section  concludes:  provided  further  that  nothing  in  this  act  shall  be 
construed  to  impose  any  tax  upon  any  property,  estate  or  interest  therein 
passing  to  or  for  the  use,  or  in  trust  for,  charitable,  educational  or  religious 
societies  or  institutions,  or  cities  or  towns  for  public  improvement,  or  to 
school  districts  or  library  commisions. 

§  2.  Requires  the  executor  or  administrator  to  pay  the  tax  before  he  pays 
any  pecuniary  legacy  or  distributive  share  within  thirteen  months  and  in  case 
of  failure  shall  not  be  allowed  any  commissions  and  makes  him  liable  on  his 
official  bond. 

§  3.  The  estate  or  interest  of  every  person,  body  politic  or  corporate,  in  all 
real  and  personal  property,  taxable  under  the  provisions  of  section  1  of  this 
act,  whether  in  remainder,  reversion  or  otherwise,  or  in  trust  or  otherwise,  or 
conditioned  upon  the  happening  of  a  contingency  or  dependent  upon  the  exer- 
cise of  a  discretion,  or  subject  to  a  power  of  appointment,  or  otherwise,  and  all 
annuities  taxable  as  aforesaid,  shall  be  valued  by  the  register  of  wills  for  the 
purpose  of  determining  the  amount  of  tax  to  be  collected  from  such  person, 
body  politic,  or  corporate,  under  the  provisions  of  this  act.  Where  the  prop- 
erty shall  pass  in  trust  or  otherwise  to  one  or  more  persons,  bodies  politic  or 
corporate,  for  a  term  of  years  or  greater  estate  or  interest,  and  with  remainder 
or  reversion  to  one  or  more  other  persons,  bodies  politic,  or  corporate,  the 
estate  or  interest  of  each  beneficiary  shall  be  valued  separately.  The  register 
of  wills  referred  to  in  this  section  shall  be  the  register  of  wills  of  the  county 
where  letters  testamentary  or  of  administration  have  been  grantd  on  the  estate 
of  the  donor,  grantor,  devisor  or  intestate  from  whom  the  property  aforesaid 
shall  have  passed  as  set  forth  in  section  1  of  this  act,  but  in  no  such  letters 
have  been  granted  then  the  said  register  shall  be  the  register  of  wills  of  the 
county  in  which  such  property  is,  or  is  situated.  Such  valuation  shall  be 
made  within  thirteen  months  of  the  death  of  the  donor,  grantor,  devisor  or 
intestate  aforesaid.  The  register  shall  give  one  week's  notice  to  the  parties 
in  interest  by  posting  the  same  in  his  office  or  in  some  other  manner  as  he 
shall  deem  proper,  of  the  time  when  he  will  hear  any  of  said  parties  relative 
to  such  valuation.  The  said  register  shall  have  power  to  summon  witnesses 
and  take  testimony  relative  to  the  valuation  aforesaid. 

The  section  further  provides  for  an  appeal  from  the  appraisal  to  the 
orphan's  court  the  decision  of  which  is  final.  It  makes  the  tax  a  lien  on  real 
estate  and  provides  for  the  collection  of  the  tax  by  an  executor  or  administra- 
tor from  a  specific  legatee  or  heir  to  distributive  share  of  specific  property. 
In  failure  of  the  beneficiary  to  pay  within  thirty  days  application  to  the 
orphan's  court  is  required  for  an  order  of  sale.  Where  the  legacy  is  made  a 
charge  on  land  the  holder  of  the  land  must  pay  the  tax  to  the  executor. 
Trustees  must  pay  the  tax  out  of  the  trust  property  to  the  executor  or  if  none 
named  to  the  register  of  wills  of  the  proper  county.  The  executor  or  adminis- 
trator must  file,  within  two  months  of  appointment,  with  the  register  of 
wills  a  sworn  statement  of  all  real  estate  of  the  decedent.  The  register  of 
wills  must  keep  a  docket  of  such  statements  and  note  therein  the  assessment 
and  payment  of  the  tax.  The  state  treasurer  must  examine  this  docket  and 
notify  the  attorney  general  of  delinquents  who  must  proceed  to  collect  the 
tax.  If  no  executor  or  administrator  appointed  a  party  liable  may  pay  tax 
to  register  of  wills. 

§  4.  Makes  the  bond  of  an  executor  or  administrator  liable  for  taxes. 


THE  STATE  STATUTES  685 

5  5.  Every  executor  or  administrator  collecting  the  tax  aforesaid  by  sale  of 
any  estate  or  interest  as  aforesaid,  shall  pay  the  tax  BO  collected  to  the  regis- 
ter of  wills  of  the  proper  county. 

§  6.  Every  register  of  wills  receiving  any  tax  under  the  provisions  of  this 
act,  shall  give  the  person  paying  the  same,  duplicate  receipts  therefor,  one  of 
which  shall  be  forwarded  by  the  person  so  paying  as  aforesaid,  to  the  state 
treasurer  to  be  by  him  preserved,  and  either  of  said  duplicate  receipts  shall 
be  evidence  in  suits  upon  the  bond  of  said  register  to  recover  the  taxes  so  by 
him  received. 

§  7.  Requires  the  register  of  wills  to  make  quarterly  tax  returns  to  the 
state  treasurer  and  makes  their  bondsmen  liable  in  default. 

Prior  Statutes:  L.  1869,  ch.  390;  L.  1871,  ch.  21;  I*  1871,  ch.  24;  L.  1877, 
ch.  337;  L,.  1883,  ch.  8;  L,.  1883,  ch.  11.  The  last  act  was  in  force  until  March 
26,  1909. 

DISTRICT  OF  COLUMBIA. 

Has  no  inheritance  tax. 

FLORIDA. 

Has  no  inheritance  tax. 

GEORGIA. 

Taxes  property  of  non-residents  within  the  state. 
TABLE  OF  RATES 


CLASS  OR  RELATIONSHIP 

Amount 
of 
exemption 

Rate  of  tax 

Father,  mother,  husband,  wife,  child,  brother,  sister,  wife  or  widow 
of  a  BOU,  adopted  child  or  lineal  descendant  if  decedent. 

$5,000 

1%  on  all  in 
excess    of 
exemption 

None 

5% 

LAWS  1913,  NO.  259,  BECAME  A  LAW  AUGUST  19,  1913. 

Section  1.  Be  it  enacted  by  the  general  assembly  of  the  state  of  Georgia,  and 
it  is  hereby  enacted  by  authority  of  the  same,  that  from  and  after  the  passage 
of  this  act,  all  property  within  the  jurisdiction  of  this  state,  real  and  personal, 
and  every  estate  and  interest  therein,  whether  belonging  to  the  inhabitants  of 
this  state  or  not,  which  shall  pass  on  the  death  of  a  decedent  by  will  or  by 
the  laws  regulating  descents  and  distributions,  or  by  deed,  grant,  or  gift, 
except  in  cases  of  a  bona  fide  purchase  for  a  full  consideration  made,  or 
intended  to  take  effect  in  possession  or  enjoyment,  after  the  death  of  the 
grantor  or  donor,  to  any  person  or  persons,  bodies  politic  or  corporate  in  trust 
or  otherwise  shall  be  subject  to  taxes  and  shall  pay  the  following  tax  to  this 
state : 

§  2.  Be  it  further  enacted,  that  if  any  section  of  this  act  or  any  part  of  any 
section  of  this  act  be  hereafter  declared  invalid,  the  remainder  of  said  act 
shall  stand. 

§  3.  Be  it  further  enacted  by  the  authority  aforesaid,  that  the  taxes  imposed 
by  this  act  shall  be  and  remain  a  lien  upon  the  property  subject  to  said  tax 
from  the  death  of  the  decedent,  and  that  all  taxes  imposed  by  this  act  unless 
otherwise  herein  provided  for,  shall  be  due  and  payable  at  the  death  of  the 
decedent. 

NOTE. — The  rest  of  the  section  imposes  the  rates  and  exemptions  of  the  foregoing  table. 

f  4.  Provides  for  the  valuation  and  taxation  of  life  estates  and  remainders 
upon  mortality  tables  using  the  basis  of  6%. 

§  5.  Requires  the  executor  or  administrator  to  pay  the  tax  out  of  the  legacy 
or  distributive  share  if  in  money,  to  withhold  the  property  until  the  bene- 
ficiary pays  it  and  to  sell  it  in  default  after  due  notice  in  the  same  manner 
as  for  debts  and  makes  them  personally  liable. 


686  INHERITANCE  TAXATION 

§  6.  Provides  that  where  any  legacy  is  a  charge  on  real  estate  the  devisee 
must  deduct  the  tax  before  paying^  it. 

§  7.  Requires  the  executor  or  administrator  to  file  an  inventory  with  the 
court  of  ordinary  within  three  months  of  appointment  under  penalty  of  $1,000 
for  neglect  or  refusal. 

§  8.  Provides  that  if  no  will  is  offered  or  administration  proceedings  com- 
menced within  three  months  of  death  the  comptroller-general  of  the  state  or 
tax  collector  of  the  county  may  apply  for  letters. 

§  9.  Provides  that  if  the  heirs  file  satisfactory  inventory  and  administration 
is  not  necessary  it  may  be  dispensed  with  but  proceedings  must  be  had  upon 
the  inventory  as  in  all  other  cases. 

§  10.  Be  it  further  enacted  by  the  authority  aforesaid,  that  when  property 
subject  to  this  tax  is  transferred  or  limited  in  trust  or  otherwise,  and  the 
rights,  interest  or  estates  of  the  transferees  or  beneficiaries  are  dependent  upon 
contingencies  or  conditions  whereby  each  may  be  wholly  or  in  part  created, 
defeated,  extended  or  abridged,  the  tax  so  imposed  on  such  property  shall  be 
due  and  payable  forthwith  by  the  executor  or  trustee  out  of  the  property  trans- 
ferred ;  that  where  an  estate  for  life  or  for  years  can  be  divested  by  the  act  or 
omission  of  the  legatee  or  devisee,  it  shall  be  taxed  as  if  there  were  no  possi- 
bility of  such  divesting.  , 

§  11.  Provides  for  the  appointment  of  appraisers  and  their  fees  and 
appraisal  on  due  notice  to  all  parties  in  interest. 

§  12.  Be  it  further  enacted  by  the  authority  aforesaid,  that  immediately 
upon  the  filing  of  the  report  of  the  appraisement  the  ordinary  shall  calculate 
and  determine  the  amount  of  tax  due  on  such  property  under  this  act,  and 
shall  in  writing  certify  such  amount  to  the  tax  collector,  to  the  executor, 
administrator  or  trustee  and  to  the  person  to  whom  or  for  whose  use,  the 
property  passes ;  and  that  for  such  calculation  and  for  certifying  said  amount 
to  the  tax  collector,  the  ordinary  shall  receive  a  fee  of  $3.00,  which  shall  be 
taxable  as  a  part  of  the  costs  of  administering  said  estate;  that  said  tax 
shall  be  a  lien  upon  such  property  from  the  death  of  the  decedent  until  paid 
and  shall  bear  interest  from  such  death  until  paid,  unless  payment  shall  be 
made  within  twelve  months  after  such  death,  in  which  case  no  interest  shall 
be  charged. 

§  13.  Be  it  further  enacted  by  the  authority  aforesaid,  that  all  taxes 
received  under  this  act  by  any  executor,  administrator  or  trustee,  shall  be  paid 
by  him  within  thirty  days  thereafter  to  the  tax  collector  of  the  county  whose 
court  of  ordinary  has  jurisdiction  of  the  estate  of  the  decedent;  that  upon 
such  payment  the  tax  collector  shall  make  duplicate  receipts  thereof ;  that  he 
ehall  deliver  one  to  the  party  making  payment,  the  other  he  shall  send  to  the 
comptroller-general  of  the  state,  who  shall  charge  the  tax  collector  with  the 
amount  thereof,  and  shall  countersign  such  receipt  and  transmit  same  to  the 
party  making  payment. 

§  14.  Be  it  further  enacted  by  the  authority  aforesaid,  that  the  tax  col- 
lector of  each  county  shall,  on  or  before  the  15th  day  of  each  month,  pay  to 
the  comptroller-general  all  taxes  received  by  him  under  this  act  before  the  first 
day  of  that  month,  deducting  therefrom  his  fees  which  shall  be  the  same  as 
his  fees  on  other  tax  monies  received  by  him. 

§  15.  Be  it  further  enacted  by  the  authority  aforesaid,  that  no  final  account 
of  an  executor,  administrator  or  trustee  shall  be  allowed  by  the  court  of 
ordinary  unless  such  account  shows  and  the  ordinary  so  finds,  that  all  taxes 
imposed  under  this  act  on  any  property  or  interest  passing  through  his  hands 
as  such  have  been  paid ;  that  the  receipt  of  the  tax  collector  for  such  taxes 
ehall  be  proper  voucher  for  such  payment. 

§  16.  Be  it  further  enacted  by  the  authority  aforesaid,  that  when  the  taxes 
imposed  by  this  act  have  not  been  paid  within  twelve  months  from  the  date 
of  the  filing  of  the  amount  of  said  tax  by  the  ordinary  in  the  office  of  the  tax 
collector  to  whom  said  tax  is  payable,  the  said  tax  collector  shall  issue  execu- 
tions against  the  persons,  and  property  liable  for  said  tax  and  proceed  in  every 
way  for  the  enforcement  and  payment  of  said  tax  in  like  manner  that  he  may 
now  proceed  by  execution,  and  for  the  enforcement  and  payment  of  direct  taxes 
on  property  against  delinquent  tax  payers. 


THE  STATE  STATUTES 


687 


§  17.  Be  it  further  enacted  by  the  authority  aforesaid,  that  all  laws  and 
parts  of  laws  in  conflict  herewith  be,  and  the  same  are,  hereby  repealed. 

Prior   Statutes. — Note. — The    foregoing    in    the   first    transfer   tax    statute 
enacted  by  the  state  of  Georgia. 

HAWAII. 

laxt.  all  property  of  non-residents  within  the  territory. 
TABLES  OF  RATES  AND  EXEMPTIONS 


CLASS  OR  RELATIONSHIP 

Amount 
exempt 

Rate 

Father,  mother,  husband,  wife,  child,  grandchild,  adopted  child. 

$5,000 

2%  on  all  above 
exemptions. 

All 

No  tax. 

All  others  

$500 

exemption. 

LAWS  1909,  CHAPTER  102,  AS  AMENDED  BY  CHAPTERS  66  AND  147, 
LAWS  1909,  AND  CHAPTER  130,  LAWS  1911. 

Section  1.  All  property  which  shall  pass  by  will  or  by  the  intestate  laws  of 
this  territory,  from  any  person  who  may  dfe  seized  or  possessed  of  the  same 
while  a  resident  of  this  territory,  or  which  being  within  this  territory  shall 
pass  whether  by  the  laws  of  this  territory  or  otherwise,  from  any  person  who 
may  die  while  not  a  resident  of  this  territory,  or  which,  or  an  interest  in  or 
income  from  which  shall  be  transferred  by  deed,  grant,  sale,  or  gift  made  in 
contemplation  of  the  death  of  the  grantor,  vendor,  or  bargainer  or  intended  to 
take  effect  in  possession  or  enjoyment  after  such  death  to  any  person  or  per- 
sons, or  to  any  body  politic  or  corporate,  in  trust  or  otherwise,  or  by  reason 
whereof  any  person  or  body  politic  or  corporate  shall  become  beneficially 
entitled,  in  possession  or  expectancy  to  any  property,  or  to  the  income 
thereof,  shall  be  and  is  subject  to  a  tax  hereinafter  provided  'or,  to  be  paid 
to  the  treasurer  of  the  territory  of  Hawaii  as  hereinafter  directed,  for  the  use 
of  the  territory;  and  such  tax  shall  be  and  remain  a  lien  upon  the  property 
passed  or  transferred  until  paid  and  all  administrator,  executors  and  trustees 
of  every  estate  so  transferred  and  the  person  to  which  the  property  passes  or 
is  transferred  or  passed  shall  be  liable  for  any  and  all  such  taxes  until  the 
same  shall  have  been  paid  as  hereinafter  directed.  The  tax  so  imposed  shall 
be  upon  the  market  value  of  such  property  at  the  rates  hereinafter  prescribed 
and  only  upon  the  excess  over  the  exceptions  hereinafter  granted. 

Whenever  any  person  or  corporation  shall  exercise  a  power  of  appointment 
derived  from  any  disposition  of  property  made  either  before  or  after  the 
passage  of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  act  in  the  same  manner  as  though  the 
property  to  which  such  appointment  relates  belonged  absolutely  to  the  donee 
of  such  power  and  had  been  bequeathed  or  devised  by  such  donee  by  will ;  and 
whenever  any  person  or  corporation  possessing  such  power  of  appointment  so 
derived  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided  there- 
for, in  whole  or  in  part,  a  transfer  taxable  under  the  provisions  of  this  act 
shall  be  deemed  to  take  place  to  the  extent  of  such  omissions  or  failure  in 
the  same  manner  as  though  the  persons  or  corporations  thereby  becoming 
entitled  to  the  possession  or  enjoyment  of  the  property  to  which  such  power 
related  had  succeeded  thereto  by  a  will  of  the  donee  of  the  power  failing  to 
exercise  such  power,  taking  effect  at  the  time  of  the  omission  or  failure. 

The  rest  of  the  section  and  section  2  prescribe  the  rates  and  exemptions  of 
the  foregoing  table. 


688 


INHERITANCE  TAXATION 


§  3.  Provides  that  remaindermen  who  elect  not  to  pay  the  tax  until  they 
come  into  possession  may  file  a  bond  and  inventory  within  one  year  in  twice 
the  amount  of  the  tax  and  renew  the  bond  every  five  years. 

§  4.  Taxes  the  excess  over  reasonable  services  of  bequests  to  executors  in. 
lieu  of  commissions. 

§  5.  Makes  taxes  due  at  death,  no  interest  due  until  after  18  months  when 
10%  charged  from  time  of  accrual  allows  a  discount  of  5%  if  paid  within  one 
year.  After  18  months  executor  or  administrator  must  give  a  bond  if  the  tax 
is  not  paid. 

§  6.  Provides  that  the  penalty  may  be  reduced  to  7%  from  expiration  of 
18  months  in  case  of  unavoidable  delay. 

§  7.  Requires  the  executor  or  administrator  to  deduct  the  tax  or  collect  it 
from  the  beneficiary  to  whom  he  may  not  deliver  the  property  until  the 
tax  is  paid. 

§  8.  Gives  power  of  sale  to  pay  the  tax  as  in  case  of  debts. 

§  9.  Provides  for  receipts  which  must  be  produced  before  any  final  account- 
ing can  be  had. 

§  10.  Provides  for  proportionate  refund  when  debts  are  proved  against  the 
estate  after  distribution. 

§  11.  Requires  the  payment  of  the  tax  by  a  foreign  executor  or  administra- 
tor before  transferring  property  and  makes  the  usual  regulations  as  to  securi- 
ties deposited  with  banks  and  trust  companies  which  must  notify  the  treasurer 
and  permit  an  examination. 

§  12.  Provides  for  appraisal  of  life  estates  and  remainders  to  be  valued  on. 
American  Experience  Tables  on  the  5%  basis. 

The  remaining  sections  make  the  usual  provisions  as  to  procedure  and  the 
collection  of  delinquent  taxes. 

IDAHO. 

Taxes  all  property  of  non-residents  within  the  state. 
TABLE  OF  RATES  AND  EXEMPTIONS 


CLASSIFICATION  OB  INDICATION 

GF  RELATIONSHIP 

Property 
exemption 

Application  of  rates  to  value  of  inheritance  or 
bequests 

On  excess 
after 
deduction 
of  exemp- 
tion from 
$25,000 

$25,000 
to 
$50,000 

$50,000 
to 
$100,000 

$100,000 
to 
$500,000 

In  excess 
of 
$500,000 

Husband,  wife,  lineal  issue,  lineal 
ancestor,  adopted  or  mutually 
acknowledged  child. 

Widow  _  or 
minor  child, 
$10,000; 
Others,  $4,- 
000. 

1% 

H% 

2% 

2*% 

3% 

Brother,  sister,  or  descendant  of 
either,  wife  or  widow  of  a  son, 
husband  of  a  daughter. 

$2,000 

li% 

21% 

3% 

3i% 

4i% 

Uncle,  aunt,  or  descendant  of 
either. 

$1,500 

3% 

4i% 

6% 

7J% 

9% 

Grand  uncle,  grand  aunt,  or 
descendant  of  either. 

$1,000 

4% 

6% 

8% 

10% 

12% 

Other  degree  of  collateral  con- 
sanguinity, stranger  in  blood, 
body  politic  or  corporate,  ex- 
cept charitable  corporations, 
exempted  by  section  1877. 

$500 

5% 

7*% 

10% 

12i% 

15% 

689 

LAWS  OF  1907,  CHAPTER  78,  BECAME  A  LAW  MARCH  16,  1907. 
(Codified  Idaho  Revised  Codes  [1908]  Title  10,  Ch.  5.) 

I  1873.  All  property  which  shall  pass,  by  will  or  by  the  intestate  laws  of 
this  state,  from  any  person  who  may  die  seized  or  possessed  of  the  same  while 
a  resident  of  this  -state,  or  if  such  decedent  was  not  a  resident  of  this  state 
at  the  time  of  death,  which  property  or  any  part  thereof,  shall  be  within  this 
state,  or  any  interest  therein,  or  income  therefrom,  which  shall  be  transferred 
by  deed,  grant,  sale  or  gift,  made  in  contemplation  of  the  death  of  the  grantor, 
vendor  or  bargainer,  or  intended  to  take  effect  in  possession  or  enjoyment  after 
such  death,  to  any  person  or  persons,  or  to  any  body  politic  or  corporate,  in 
trust  or  otherwise,  or  by  reason  whereof  any  person  or  body  politic  or  corpo- 
rate shall  become  beneficially  entitled,  in  possession  or  expectancy,  to  any 
property,  or  to  the  income  thereof,  shall  be  and  is  subject  to  a  tax  hereinafter 
provided  for,  to  be  paid  to  the  treasurer  of  the  proper  county,  as  hereinafter 
directed  for  the  benefit  of  the  general  fund  of  this  state  to  be  used  for  all  the 
purposes  for  which  said  fund  is  available.  And  the  county  treasurer  shall, 
upon  receipt  of  said  tax,  pay  the  same  to  the  state  treasurer  and  take  duplicate 
receipts  thereof,  one  of  which  the  county  treasurer  shall  retain,  and  transmit 
the  other  to  the  state  auditor  and  receive  from  him  credit  for  the  amount 
thereof  on  his  account;  and  such  tax  shall  be  and  remain  a  lien  upon  the  prop- 
erty passed  or  transferred  until  paid,  and  the  person  to  whom  the  property 
passes  or  is  transferred,  and  all  administrators,  executors  and  trustees  of 
every  estate  so  transferred  or  passed,  shall  be  liable  for  any  and  all  such 
taxes  until  the  same  shall  have  been  paid  as  hereinafter  directed.  The  tax  so 
imposed  shall  be  upon  the  market  value  of  such  property  at  the  rates  herein- 
after prescribed,  and  only  upon  the  excess  over  the  exemptions  hereinafter 
granted. 

§  1874.  Whenever  any  person  or  corporation  shall  exercise  a  power  of 
appointment  derived  from  any  disposition  of  property  made  either  before  or 
after  the  passage  of  this  chapter,  such  appointment  when-  made  shall  be 
deemed  a  transfer  taxable  under  the  provisions  of  this  chapter  in  the  same 
manner  as  though  the  property  to  which  such  appointment  relates  belonged 
absolutely  to  the  donee  of  such  power,  and  had  been  bequeathed  or  devised  by 
such  donee  by  will ;  and  whenever  any  person  or  corporation  possessing  such  a 
power  of  appointment  so  derived  shall  omit  or  fail  to  exercise  the  same 
within  the  time  provided  therefor,  in  whole  or  in  part,  a  transfer  taxable 
under  the  provisions  of  this  chapter  shall  be  deemed  to  take  place  to  the 
extent  of  such  omission  or  failure,  in  the  same  manner  as  though  the  person 
or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoyment  of 
the  property  to  which  such  power  related  had  succeeded  thereto  by  a  will  of  the 
donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at  the  time  of 
such  omission  or  failure. 

Sections  1875  and  1876  fix  the  rate  of  tax  as  given  in  the  foregoing  table. 

§  1877.  The  following  exemptions  from  the  tax  are  hereby  allowed: 

1.  All  property  transferred  to  societies,  corporations  and  institutions  now  or 
hereafter  exempted  by  law  from  taxation  or  to  any  public  corporations,  or  to 
any  society,  corporation,  institution  or  association  of  persons  engaged  in  or 
devoted  to  any  charitable,  benevolent,  educational,  public  or  other  like  work 
(pecuniary  profit  not  being  its  object  or  purpose),  or  to  any  person,  society, 
corporation,  institution  or  association  of  persons  in  trust  for  or  to  be  devoted 
to  any  charitable,  benevolent,  educational  or  public  purpose,  by  reason  whereof 
any  such  person  or  corporation  shall  become  beneficially  entitled,  in  pos- 
session or  expectancy,  to  any  such  property  or  to  the  income  thereof  shall  be 
exempt. 

The  rest  of  the  section  gives  the  exemptions  as  shown  in  the  table. 

NOTE  ;  The  rest  of  the  statute  is  substantially  a  copy  of  that  of  California  prior 
to  1917  and  will  therefore  be  briefly  summarized. 

§  1878.  Provides  for  the  immediate  appraisal  of  life  estates  and  remainders. 
If  the  remainderman  elect  not  to  pay  the  tax  until  the  remainder  falls  in 
he  may  file  a  bond  in  twice  the  amount  of  the  tax. 

§  1879.  A  bequest  to  executor  in  lieu  of  commissions  is  taxed  on  the  excess 
over  reasonable  compensation. 


690 


INHERITANCE  TAXATION 


§  1880.  Taxes  due  at  death.  If  paid  within  six  months  5  per  cent,  dis- 
count allowed.  No  interest  charged  until  after  one  year.  After  that  10  per 
cent.,  but  if  unavoidable  delay  court  may  extend  time  of  payment  and  reduce 
interest  to  6  per  cent. 

§  1881.  Provides  for  the  collection  of  the  tax  by  the  executor  or  admin- 
istrator from  the  beneficiary. 

§  1882.  Gives  .power  to  sell  chattels  or  real  estate  to  pay  tax. 

§  1883.  Provides  for  payment  of  tax  -by  executor  or  administrator  to  county 
treasurer  and  must  produce  receipt  before  entitled  to  final  accounting. 

§  1884.  Provides  for  refund  of  proportion  of  tax  where  debts  are  proved 
against  estate  after  distribution. 

§  1885.  Requires  payment  of  tax  by  foreign  executors  and  administrators 
before  transferring  property  within  the  state  and  requires  trust  and  safe 
deposit  companies,  banks,  etc.,  to  hold  assets  open  to  inspection  and  to  retain 
enough  to  pay  the  tax  before  delivery  to  executor  or  administrator  under  a 
penalty  of  twice  the  tax. 

§  1886.  Provides  for  the  appointment  of  an  appraiser,  the  appraisal,  and 
the  valuation  of  life  estates  and  remainders  actuaries  combined  tables  on  a 
basis  of  5  per  cent. 

§  1887.  Forbids  the  appraiser  to  accept  a  bribe  under  penalty  of  fine  and 
imprisonment. 

§  1888.  Gives  jurisdiction  to  the  probate  court  in  which  the  property  is 
situated  in  case  of  non-residents. 

§  1889.  The  words  "  estate  "  and  "  property  "  as  used  in  this  chapter  shall 
be  taken  to  mean  the  real  and  personal  property  or  interest  therein  of  the 
testator,  intestate,  grantor,  bargainer,  vendor  or  donor  passing  or  transferred 
to  individual  legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees,  vendees  or 
successors,  and  shall  include  all  personal  property  within  or  without  the  state. 
The  word  "  transfer  "  as  used  in  this  chapter  shall  be  taken  to  include  the 
passing  of  property  or  any  interest  therein,  in  possession  or  enjoyment,  present 
or  future,  by  inheritance,  descent,  devise,  succession,  bequest,  grant,  deed, 
bargain,  sale,  gift  or  appointment  in  the  manner  herein  described.  The  word 
"  decedent "  as  used  in  this  chapter  shall  include  the  testator,  intestate, 
grantor,  bargainer,  vendor  or  donor. 

NOTE:    The  rest  of  the  statute  concerns  the  collection  of  delinquent  taxes. 

Prior  Statutes. —  None. 

ILLINOIS. 

Taxes  all  property  of  non-residents  within  the  state. 
TABLE  OF  GRADED  RATES 


CLASS  OR  RELATIONSHIP 

Exemp- 
tion 

Rates  of  tax 

Father,  mother,  husband,  wife,  child, 
brother,  sister,  wife  or  widow  of 
eon,  daughter's  husband,  adopted 
or  mutually  acknowledged  child, 
or  lawful  lineal  descendant  of  de- 
cedent. 

$20,000 

Excess  of  exemption  up  to 
$100,000,  1% 

All   in    excess   of 
$100,000,  2%. 

Aunt,  uncle,  niece,  nephew  or  lineal 
descendants  of  same. 

$2,000 

Excess  of  exemption  up  to 
$20,000,  2%. 

All   in    excess    of 
$20,000    above 
exemption,  4%. 

Up  to 
$10,000 

$10,000 
to 
$20,000 

$20,000 
to 
$50,000 

$50,000 
to 
$100,000 

All  in 

excess 
of 
$100,000 

All  others,  excepting  charitable  be- 
quests exempted  by  section  28. 

Less  than 
$500  not 
taxed. 

3% 

4% 

5% 

6% 

10% 

THE  STATE  STATUTES  691 

LAWS  OF  1909  AS  AMENDED  BY  L.  1913. 

(In  force  July  1,  1913,  and  L.  1917,  in  force  May  7,  1917.) 

The  1913  and  1917  amendments  did  not  affect  the  graded  rates,  exemptions 
or  property  of  non-residents. 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any 
property,  real,  personal  or  mixed,  or  of  any  interest  therein  or  income  there- 
from, in  trust  or  otherwise,  to  persons,  institutions  or  corporations,  not  here- 
inafter exempted  in  the  following  cases: 

1.  When  the.  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from 
any  person  dying,  seized  or  possessed  of  the  property  while  a  resident  of  the 
state. 

2.  When  the  transfer  is  by  will  or  intestate  laws  of  property  within  the 
state  and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his 
death. 

3.  When  the  transfer  is  of   property  made  by  a  resident,  or  by  a  non- 
resident when   such  non-resident's  property   is   within  this   state,  by   deed, 
grant,  bargain,  sale  or  gift,  made  in  contemplation  of  the  death  of  the  grantor, 
vendor  or  donor,  or  intended  to  take  effect  in  possession  or  enjoyment  at  or 
after  such  death.    When  any  such  person,  institution  or  corporation  becomes 
beneficially  entitled  in  possession  or  expectancy  to  any  property  or  the  income 
therefrom,  by  any  such  transfer,  whether  made  before  or  after  the  passage  of 
this  act. 

4.  Whenever  any  person,  institution  or  corporation  shall  exercise  a  power 
of  appointment  derived  from  any  disposition  of  property  made  either  before  or 
after  the  passage  of  this  act,  such  appointment,  when  made,  shall  be  deemed 
a  taxable  transfer  under  the  provisions  of  this  act,  in  the  same  manner  as 
though  the  property  to  which  such  appointment  relates  belonged  absolutely 
to  the  donee  of  such  power  and  had  been  bequeathed  or  devised  by  such  donee 
by  will;  and  whenever  any  person  or  corporation  possessing  such  a  power  of 
appointment  so  derived  shall  omit  or  fail  to  exercise  the  same  within  the 
time  provided  therefor,  in  whole  or  in  part,  a  transfer  taxable  under  the  pro- 
visions of  this  act  shall  be  deemed  to  take  place  to  the  extent  of  such  omission 
or  failure,  in  the  same  manner  as  though  the  persons  or  corporations  thereby 
becoming  entitled  to  the  possession  or  enjoyment  of  the  property  to  which 
such  power  related  had  succeeded  thereto  by  a  will  of  the  donee  of  the  power 
failing  to  exercise  such  power,  taking  effect  at  the  time  of  such  omission  or 
failure. 

The  rest  of  the  section  fixes  the  rates  and  exemptions  as  shown  in  the 
foregoing  tables. 

§  2.  Provides  for  the  valuation  of  life  estates  and  remainders  by  mortality 
tables  on  a  basis  of  5  per  cent.  If  the  beneficiary  elects  not  to  pay  the  tax 
until  the  remainder  falls  in  he  may  file  a  bond  to  pay  tax  and  interest  for 
three  times  the  tax  with  an  inventory  within  one  year  of  death,  bond  to  be 
renewed  every  five  years. 

§  3.  Makes  taxes  due  at  death,  allows  a  discount  of  5  per  cent  if  paid 
within  six  months,  fixes  interest  at  6  per  cent  and  if  tax  not  paid  within  one 
year  executor  or  administrator  must  file  a  bond. 

§  4.  Requires  executors  or  administrators  to  deduct  tax  from  money  legacy 
or  distributive  share  or  to  collect  it  from  beneficiary  if  not  money  before 
delivering  the  property. 

§  5.  Makes  executors  and  administrators  personally  liable  and  gives  them 
power  of  sale  to  collect  the  tax. 

§  6.  Provides  for  payment  within  thirty  days  to  proper  county  treasurer 
whose  receipt  must  be  produced  before  executor  or  administrator  can  have 
final  accounting. 

§  7.  Whenever  any  of  the  real  estate  of  which  any  decedent  may  die  seized 
shall  pass  to  any  body  politic  or  corporate,  or  to  any  person  or  persons,  or  in 
trust  for  them,  it  shall  be  the  duty  of  the  executor,  administrator  or  trustee 
of  such  decedent  to  give  information  thereof  in  writing  to  the  treasurer  of  the 
county  where  said  real  estate  is  situated,  within  six  months  after  they  under- 
take the  execution  of  their  expected  duties,  or  if  the  fact  be  not  known  to 


692  INHERITANCE  TAXATION 

them  within  that  period,  then  within  one  month  after  the  same  shall  have 
come  to  their  knowledge. 

§  8.  Whenever  debts  shall  be  proved  against  the  estate  of  the  decedent  after 
distribution  of  legacies  from  which  the  inheritance  tax  has  been  deducted  in 
compliance  with  this  act,  and  the  legatee  is  required  to  refund  any  portion  of 
the  legacy,  a  proportion  of  the  said  tax  shall  be  repaid  to  him  by  the  executor 
or  administrator  if  the  said  tax  has  not  been  paid  into  the  state  or  county 
treasury,  or  by  the  county  treasurer  if  it  has  been  so  paid. 

§  9.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  trans- 
fer any  stock  or  obligations  in  this  state  standing  in  the  name  of  a  decedent  or 
in  trust  for  a  decedent,  liable  to  any  such  tax  the  tax  shall  be  paid  to  the 
treasurer  of  the  proper  county  on  the  transfer  thereof.  No  safe  deposit  com- 
pany, trust  company,  corporation,  bank  or  other  institution,  person  or  per- 
sons having  in  possession  or  under  control  securities,  deposits,  or  other  assets 
belonging  to  or  standing  in  the  name  of  a  decedent  who  was  a  resident  or 
non-resident  or  belonging  to  or  standing  in  the  joint  names  of  such  a 
decedent  and  one  or  more  persons,  including  the  shares  of  the  capital  stock  of, 
or  other  interests  in,  the  safe  deposit  company,  trust  company,  corporation, 
bank  or  other  institution  making  the  delivery  or  transfer  herein  provided, 
shall  deliver  or  transfer  the  same  to  the  executors,  administrators  or  legal 
representatives  of  said  decedent,  or  to  the  survivor  or  survivors  when  held  in 
the  joint  names  of  a  decedent  and  one  or  more  persons,  or  upon  their  order  or 
request,  unless  notice  of  the  time  and  place  of  such  intended  delivery  or  trans- 
fer be  served  upon  the  state  treasurer  and  attorney-general  at  least  ten  days 
prior  to  said  delivery  or  transfer;  nor  shall  any  such  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution,  person  or  persons 
deliver  or  transfer  any  securities,  deposits  or  other  assets  belonging  to  or 
standing  in  the  name  of  a  decedent,  or  belonging  to,  or  standing  in  the  joint 
names  of  a  decedent  and  one  or  more  persons,  including  the  shares  of  the 
capital  stock  of,  or  other  interests  in,  the  safe  deposit  company,  trust  com- 
pany, corporation,  bank  or  other  institution  making  the  delivery  or  transfer, 
without  retaining  a  sufficient  portion  or  amount  thereof  to  pay  any  tax  or 
interest  which  may  thereafter  be  assessed  on  account  of  the  delivery  or  transfer 
of  such  securities,  deposits  or  other  assets,  including  the  shares  of  the  capital 
stock  of,  or  other  interests  in,  the  safe  deposit  company,  trust  company,  cor- 
poration, bank  or  other  institution  making  the  delivery  or  transfer,  under 
the  provisions  of  this  article,  unless  the  state  treasurer  and  attorney-general 
consent  thereto  in  writing.  And  it  shall  be  lawful  for  the  state  treasurer, 
together  with  the  attorney-general,  personally  or  by  representatives,  to  exam- 
ine said  securities,  deposits  or  assets  at  the  time  of  such  delivery  or  transfer. 
Failure  to  serve  such  notice  or  failure  to  allow  such  examination,  or  failure  to 
retain  a  sufficient  portion  or  amount  to  pay  such  tax  and  interest  as  herein 
provided  shall  render  said  safe  deposit  company,  trust  company,  corporation, 
bank  or  other  institution,  person  or  persons  liable  to  the  payment  of  the 
amount  of  the  tax  and  interest  due  or  thereafter  to  become  due  upon  said 
securities,  deposits  or  other  assets,  including  the  shares  of  the  capital  stock 
of,  or  other  interests  in,  the  safe  deposit  company,  trust  company,  corpora- 
tion, bank  or  other  institution  making  the  delivery  or  transfer,  and  in 
addition  thereto,  a  penalty  of  one  thousand  dollars;  and  the  payment  of  such 
tax  and  interest  thereon,  or  of  the  penalty  above  prescribed,  or  both,  may  be 
enforced  in  an  action  brought  by  the  state  treasurer  in  any  court  of  compe- 
tent jurisdiction. 

§  10.  When  any  amount  of  said  tax  shall  have  been  paid  erroneously  to  the 
state  treasury,  it  shall  be  lawful  for  him  on  satisfactory  proof  rendered  to  him 
by  said  county  treasurer  of  said  erroneous  payments  to  refund  and  pay  to  the 
executor,  administrator  or  trustee,  person  or  persons  who  have  paid  any  such 
tax  in  error  the  amount  of  such  tax  so  paid :  Provided,  that  all  applications 
for  the  repayment  of  said  tax  shall  be  made  within  two  years  from  the  date 
of  said  payment. 

§  11.  It  shall  be  the  duty  of  the  county  judge  to  ascertain  whether  any 
transfer  of  any  property  be  subject  to  an  inheritance  tax  under  the  provis- 
ions of  this  act,  and,  if  it  be  subject  to  such  inheritance  tax,  to  assess  and  fix 


THE  STATE  STATUTES  693 

the  then  cash  value  of  all  estates,  annuities  and  life  estates  or  terms  of  years 
growing  out  of  said  estates  and  the  tax  to  which  the  same  is  liable.  The 
county  judge,  upon  the  application  of  any  interested  party,  including  the 
attorney-general,  or  upon  his  own  motion>  as  often  as,  or  whenever  occasion 
may  require,  may  hear  evidence  and  determine  the  fair  cash  value  of  such 
estate  and  the  amount  of  inheritance  tax  to  which  the  same  ia  liable  or  the 
county  judge  may,  in  such  case,  in  his  discretion,  where  the  facts  are  com- 
plicated and  evidence  is  voluminous,  appoint  some  competent  person  as 
appraiser  to  appraise  the  fair  cash  value  at  the  time  of  the  transfer  thereof 
of  the  property  of  persons  whose  estates  shall  be  subject  to  the  payment  of  any 
inheritance  tax  imposed  by  this  act.  Whether  the  fair  cash  value  of  such 
estate  shall  be  ascertained  and  determined  by  the  appraiser  appointed  by  the 
county  judge  or  by  the  county  judge,  notice  shall,  in  each  case,  be  given  by 
mail  to  all  persons  known  to  have  a  [or]  claim  an  interest  in  such  property, 
including  the  attorney-general,  and  to  such  persons  as  the  county  judge  by 
order  directs,  of  the  time  and  place  he  will  appraise  such  property. 

The  rest  of  the  section  provides  for  the  appointment  of  appraisers  in  every 
case  in  the  larger  counties,  for  hearings  on  due  notice  before  the  appraisers 
and  for  an  appeal  from  this  report  to  the  county  judge  closely  following  the 
New  York  practice. 

§  12.  Prescribes  the  duties  and  fees  of  the  county  court  clerk  in  transfer 
tax  proceedings. 

§  13.  Imposes  a  penalty  if  appraisers  accept  fee  or  reward. 

§  14.  Gives  the  county  court  jurisdiction  in  transfer  tax  proceedings. 

§§  15-22.  Provide  for  the  collection  of  delinquent  taxes,  records  and 
reports  of  the  county  judge,  fees  of  the  state  treasurer  who  shall  furnish 
copies  of  transfer  tax  receipts  to  all  persons  on  payment  of  fee  of  fifty  cents. 

By  a  statute  approved  May  7,  1917,  section  20,  was  amended  to  read  as 
follows: 

§  20.  The  treasurer  of  each  county  shall  collect  all  such  taxes  and  on  the 
first  day  of  each  and  every  month  transmit  all  such  taxes  so  collected  prior 
thereto,  and  not  yet  transmitted,  to  the  state  treasurer,  who  shall  give  him  a 
receipt  therefor,  of  which  collection  and  payment  he  shall  make  report  under 
oath  to  the  auditor  of  public  accounts,  on  the  first  day  of  each  and  every 
month,  stating  for  what  estate  paid,  and  in  such  form  and  containing  such 
particulars,  as  the  auditor  may  prescribe.  //  any  county  treasurer  shall  fail 
to  pay  to  the  state  treasurer  all  taxes  that  may  be  due  and  payable  under 
this  act,  as  prescribed  herein,  such  county  treasurer  shall  pay  to  the  state, 
as  a,  penalty  for  such  failure  a  sum  of  money  equal  to  the  interest  on  such 
taxes  at  the  rate  of  one-tenth  of  one  per  cent  per  day  from  the  time  such 
taxes  are  collected  by  said  county  treasurer  until  such  taxes  are  paid.  The 
sureties  upon  the  official  bond  of  such  county  treasurer  shall  be  security  for 
the  payment  of  such  penalty.  The  penalty  in  this  section  provided  may  be 
recovered  in  an  action  of  debt  against  such  county  treasurer  and  his  sureties 
aforesaid,  in  the  name  of  the  people  of  the  state  of  Illinois,  in  any  court  of 
competent  jurisdiction  urithin  the  county  tcherein  such  county  treasurer  is 
resident;  and  such  penalty,  when  recovered,  shall  be  paid  into  the  state  treas- 
ury. Such  action  shall  be  brought  by  the  state  treasurer  within  ten  days 
after  the  failure  of  such  county  treasurer  to  pay  to  the  state  treasurer  any 
taxes  collected  by  him,  at  the  time  required  by  this  act.  Failure  to  bring  such 
suit  within  such  time  shall  not  prevent  the  bringing  of  such  suit  thereafter. 
And  it  is  hereby  made  the  duty  of  the  state  treasurer  to  make  necessary  and 
proper  investigations  to  determine  what  inheritance  tax  should  be  paid. 

§  23.  When  any  person  interested  in  any  property  in  this  state,  which  shall 
have  been  transferred  within  the  meaning  of  this  act  shall  deem  the  same  not 
subject  to  any  tax  under  this  act,  he  may  file  his  petition  in  the  county  court  of 
the  proper  county  to  determine  whether  said  property  is  subject  to  the  tax 
herein  provided,  in  which  petition  the  county  treasurer  and  all  persons  known 
to  have  or  claim  any  interest  in  said  property  shall  be  made  parties.  The 
county  court  may  hear  the  said  cause  upon  the  relation  of  the  parties  and  the 
testimony  of  witnesses,  and  evidence  produced  in  open  court,  and.  if  the  court 
shall  find  said  property  is  not  subject  to  any  tax,  as  herein  provided,  the 


694  INHERITANCE  TAXATION 

court  shall,  by  order,  so  determine;  but  if  it  shall  appear  that  said  property, 
or  any  part  thereof,  is  subject  to  any  such  tax,  the  same  shall  be  appraised 
and  taxed  as  in  other  cases.  An  adjudication  by  the  county  court,  as  herein 
provided,  shall  be  conclusive  as  to  the  lien  of  the  tax  herein  provided  upon 
said  property,  subject  to  appeal  to  the  supreme  court  of  the  state  by  the 
county  treasurer,  or  attorney-general  of  the  state,  in  behalf  of  the  people,  or 
by  any  party  having  an  interest  in  said  property.  The  fees  and  costs  in  all 
cases  arising  under  this  section  shall  be  the  same  as  are  now  or  may  here- 
after be  allowed  by  law  in  oases  at  law  in  the  county  court. 

§  24.  The  lien  of  the  collateral  inheritance  tax  shall  continue  until  the 
said  tax  is  settled  and  satisfied:  Provided,  that  said  lien  shall  be  limited  to 
the  property  chargeable  therewith:  And,  provided,  further,  that  all  inherit- 
ance taxes  shall  be  sued  for  within  five  years  after  they  are  due  and  legally 
demandable,  otherwise  they  shall  be  presumed  to  be  paid  and  cease  to  be  a  lien 
as  against  any  purchaser  of  real  estate. 

§  25.  When  property  is  transferred  or  limited  in  trust  or  otherwise,  and  the 
rights,  interest  or  estates  of  the  transferees  or  beneficiaries  are  dependent  upon 
contingencies  or  conditions  whereby  they  may  be  wholly  or  in  part  created, 
defeated,  extended  or  abridged,  a  tax  shall  be  imposed  upon  said  transfer  at 
the  highest  rate  which,  on  the  happening  of  any  of  the  said  contingencies  or 
conditions,  would  be  possible  under  the  provisions  of  this  article,  and  such  tax 
so  imposed  shall  be  due  and  payable  forthwith  by  the  executors  or  trustees  out 
of  the  property  transferred :  Provided,  however,  that  on  the  happening  of  any 
contingency  whereby  the  said  property,  or  any  part  thereof  is  transferred  to 
a  person,  corporation  or  institution  exempt  from  taxation  under  the  provis- 
ions of  the  inheritance  tax  laws  of  this  state,  or  to  any  person,  corporation 
or  institution  taxable  at  a  rate  less  than  the  rate  imposed  and  paid,  such  per* 
son,  corporation  or  institution  shall  be  entitled  to  a  return  of  so  much  of  the 
tax  imposed  and  paid  as  is  the  difference  between  the  amount  paid  and  the 
amount  which  said  person,  corporation  or  institution  should  pay  under  the 
inheritance  tax  laws,  with  interest  thereon  at  the  rate  of  three  per  centum  per 
annum  from  the  time  of  payment.  Such  return  of  over-payment  shall  be  made 
in  the  manner  provided  for  refunds  under  section  eight. 

Estates  or  interests  in  expectancy  which  are  contingent  or  defeasible  and  in 
which  proceedings  for  the  determination  of  the  tax  have  not  been  taken  or 
where  the  taxation  thereof  has  been  held  in  abeyance,  shall  be  appraised  at 
their  full,  undiminished  value  when  the  persons  entitled  thereto  shall  come 
into  the  beneficial  enjoyment  or  possession  thereof,  without  diminution  for  or 
on  account  of  any  valuation  theretofore  made  of  the  particular  estates  for  the 
purposes  of  taxation,  upon  which  said  estates  or  interests  in  expectancy  may 
have  been  limited. 

Where  an  estate  for  life  or  for  years  can  be  divested  by  the  act  or  omission 
of  the  legatee  or  devisee  it  shall  be  taxed  as  if  there  were  no  possibility  of  such 
divesting. 

§  26.  Provides  that  the  state  treasurer  with  consent  of  the  attorney-general 
may  compromise  contingent  and  uncertain  tax  claims. 

§  27.  If  it  appears  at  any  stage  of  an  inheritance  tax  proceeding  that  any 
person  known  to  be  interested  therein  is  an  infant  or  person  under  disability, 
the  county  judge  may  appoint  a  special  guardian  of  such  infant  or  person 
under  disability. 

§  28.  When  the  beneficial  interests  of  any  property  or  income  therefrom 
shall  pass  to  or  for  the  use  of  any  hospital,  religious,  educational,  bible,  mis- 
sionary, tract,  scientific,  benevolent  or  charitable  purpose,  or  to  any  trustee, 
bishop  or  minister  of  any  church  or  religious  denomination,  held  and  used 
exclusively  for  the  religious,  educational  or  charitable  uses  and  purposes  of 
such  church  or  religious  denomination,  institution  or  corporation,  by  grant, 
gift,  bequest  or  otherwise,  the  same  shall  not  be  subject  to  any  such  duty  or 
tax,  but  this  provision  shall  not  apply  to  any  corporation  which  has  the  right 
to  make  dividends  or  distribute  profits  or  assets  among  its  members. 

§  29.  When  property,  or  any  interest  therein  or  income  therefrom,  shall 
pass  to  or  for  the  use  of  any  person  institution  or  corporation  by  the  death  of 
another  by  deed,  instrument  or  memoranda,  .such  passing  shall  be  deemed  a 


THE  STATE  STATUTES 


695 


transfer  within  the  meaning  of  this  act,  and  taxable  at  the  same  rates,  and  be 
appraised  in  the  same  manner  and  subjected  to  the  same  duties  and  liabilities 
as  any  other  form  of  transfer  provided  in  this  act. 

§  30.  Provides  for  furnishing  certified  copies  of  papers  by  county  court  and 
county  treasurers. 

§  31.  Repeals  former  statutes  with  a  saving  clause  as  to  taxes  accruing 
thereunder. 

Prior  statutes:    1887,  p.  183;    1891,  p.  137;  1895,  p.  301;    1901,  p.  268. 

INDIANA. 

Taxes  real  estate  and  tangible  property  within  the  state  of  non-residents. 
Substantially  copies  the  New  York  statute  of  1911  except  as  to  rates  and 
exemptions. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OR  RELATIONSHIP 

Amount 
of  exemp- 
tion 

Rates  of  tax 

Above 
exemp- 
tion 
up  to 
$25,000 

$25,000 
to 
$50,000 

$50,000 
to 
$100,000 

$100,000 
to 
$500,000 

In 
excess  of 
$500,000 

Husband,  wife,  lineal  issue,  lineal  an- 
cestor of  decedent,  adopted  or 
mutually  acknowledged  child,  or 
issue  of  same. 

Widow, 
$10,000, 
all 
others, 
$2,000. 

1% 

H% 

2% 

2|% 

3% 

Brother  or  sister  or  their  descndants 
wife  or  widow  of  son,  husband  of 
daughter. 

$500 

11% 

2i% 

3% 

31% 

4i% 

Aunt,  uncle  or  their  descendants.  .  .  . 

$250 

3% 

4|% 

6% 

71% 

9% 

Brother  or  sister  of  grandparents  or 
their  descendants. 

$150 

4% 

6% 

8% 

10% 

12% 

All  others,  except  charitable  bequests, 
exempted  by  section  4. 

$100 

5% 

71% 

10% 

121% 

15% 

LAWS  1913,  CHAPTER  47,  BECAME  A  LAW  FEBRUARY  28,  1913. 
(As  amended  by  Laws  of  1917,  which  did  not  change  rates  or  exemptions.) 
Section  1.  Be  it  enacted  by  the  general  assembly  of  the  State  of  Indiana, 
that  a  tax  shall  be  imposed  upon  any  transfer  of  property,  real,  personal  or 
mixed,  or  any  interest  therein  or  income  therefrom  in  trust  or  otherwise  to  any 
person,  association  or  corporation,  except  county,  town  or  municipal  corpora- 
tions for  strictly  county,  town,  municipal  purposes,  or  to  the  bishop,  rector, 
pastor,  trustee,  board  of  trustees,  or  governing  body  of  any  educational  or 
religious  institution  who  shall  use  the  property  so  transferred  solely  for 
religious,  charitable,  or  educational  purposes,  within  the  state,  and  corpora- 
tions of  this  state  organized  under  its  laws  solely  for  religious,  charitable  or 
educational  purposes,  which  shall  use  the  property  so  transferred  exclusively 
for  the  purposes  of  their  organization  within  the  state,  in  the  following  cases: 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  of  any 
intangible  property,  or  of  tangible  property  within  the  state,  from  any  person 
dying  seized  or  possessed  thereof  while  a  resident  of  the  state. 

2.  When  the  transfer  is  by  will  or  intestate  law,  of  tangible  property  within 
the  state,  and  the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his 
death. 

3.  Whenever  the  property  of  a  resident  decedent,  or  the  property  of  a  non- 
resident decedent  within  this  state  transferred   by   will   is  not   specifically 


696  INHERITANCE  TAXATION 

bequeathed  or  devised  such  property  shall,  for  the  purposes  of  this  article,  be 
deemed  to  be  transferred  proportionally  to  and  divided  pro  rata  among  all  the 
general  legatees  and  devisees  named  in  said  decedent's  will,  including  all  trans- 
fers under  a  residuary  clause  of  such  will. 

4.  When  the  transfer  is  intangible  property  or  of  tangible  property  within 
the  state,  made  by  a  resident,  or  of  tangible  property  within  the  state  made 
by  a  non-resident,  by  deed,  grant,  bargain,  sale  or  gift  made  in  contemplation 
of  the  death  of  the  grantor,  vendor  or  donor  or  intended  to  take  effect  in 
possession  or  enjoyment  at  or  after  such  death. 

NOTE. — By  the  amendment  of  1917  the  following  was  added  to  subd.  4 :  "  Pro- 
vided that  any  conveyance,  gift  or  transfer  made  within  two  years  of  the  death 
of  any  decedent,  without  consideration,  save  except  love  and  affection,  shall  be 
conclusively  presumed  to  have  been  made  in  contemplation  of  death." 

5.  When  any  such  person  or  corporation  becomes  beneficially  entitled,  in 
possession  or  expectancy,  to  any  property  or  the  income  thereof,  by  any  such 
transfer,  whether  made  before  or  after  the  passage  of  this  act. 

6.  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appoint- 
ment derived  from  any  disposition  of  property  made,  either  before  or  after  the 
passage  of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  act  in  the  same  manner  as  though  the 
property  to  which  such  appointment  relates  belonged  absolutely  to  the  donee 
of  such  power  and  had  been  bequeathed  or  devised  by  such  donee  by  will. 

7.  The  tax,  so  imposed  shall  be  upon  the  market  value  of  such  property  at 
the  rates  hereinafter  prescribed  and  only  upon  the  excess  of  the  exemptions 
hereinafter  granted. 

§  4.  The  following  exemptions  from  the  tax  are  hereby  allowed : 
1.  All  property  transferred  to  municipal  corporations  within  the  state  for 
strictly  county,  town  or  municipal  purposes,  or  to  the  bishop,  rector,  pastor, 
trustee,  board  of  trustees,  or  governing  body  of  any  educational  or  religious, 
institution  who  shall  use  the  property,  so  transferred  solely  for  religious, 
charitable  or  educational  purposes,  within  the  state,  or  to  corporations  of 
this  state  organized  under  its  laws  solely  for  religious,  charitable  or  educa- 
tional purposes,  which  shall  use  the  property  so  transferred,  exclusively  for 
the  purpose  of  their  organization,  within  the  state,  shall  be  exempt. 

NOTE. —  The  amendment  of  1917  adds  the  following:  "said  exemptions  to  be 
taken  out  of  the  first  twenty-five  thousand  dollars  of  each  beneficial  interest  in 
the  estate." 

The  rest  of  section  4  prescribes  the  exemptions  set  forth  in  the  table. 

§  5.  Makes  the  tax  a  lien,  the  executor  or  administrator  personally  liable 
and  he  must  produce  receipt  to  obtain  final  accounting. 

§  6.  If  such  tax  is  paid  within  one  year  from  the  accruing  thereof,  a  dis- 
count of  five  per  centum  shall  be  allowed  and  deducted  therefrom.  If  such  tax 
is  not  paid  within  eighteen  months  from  the  accruing  thereof,  interest  shall 
be  charged  and  collected  thereon  at  the  rate  of  ten  per  centum  per  annum  from 
the  time  the  tax  accrued,  unless  by  reason  of  claims  made  upon  the  estate, 
necessary  litigation  or  other  unavoidable  cause  or  delay,  such  tax  shall  not  be 
determined  and  paid  as  herein  provided,  in  which  case  interest  at  the  rate  of 
six  per  centum  per  annum  shall  be  charged  upon  such  tax  from  accrual  thereof 
until  the  cause  of  such  delay  is  removed,  after  which  ten  per  centum  shall  be 
charged. 

In  all  cases  when  a  bond  shall  be  given  under  the  provisions  of  section  9  of 
this  act,  interest  shall  be  charged  at  the  rate  of  six  per  centum  from  the 
accrual  of  the  tax,  until  the  date  of  payment  thereof. 

§  7.  Every  executor,  administrator  or  trustee  shall  have  full  power  to  sell  so 
much  of  the  property  of  the  decedent  as  will  enable  him  to  pay  such  tax  in  the 
same  manner  as  he  might  be  entitled  by  law  to  do  for  the  payment  of  the  debts 
of  the  testator  or  intestate. 

Any  such  administrator,  executor  or  trustee  having  in  charge  or  in  trust 
any  legacy  or  property  for  distribution  subject  to  such  tax  shall  deduct  the 
tax  therefrom,  and  within  thirty  days  therefrom  shall  pay  over  the  same  to 
the  county  treasurer  as  herein  provided. 


THE  STATE  STATUTES  697 

If  such  legacy  or  property  be  not  in  money  he  shall  collected  the  tax  thereon 
upon  the  appraised  value  thereof  from  the  person  entitled  thereto. 

He  shall  not  deliver  or  be  compelled  to  deliver  any  specific  legacy  or  property 
subject  to  tax  under  this  act,  to  any  person  until  he  shall  have  collected  the 
tax  thereon.  If  any  such  legacy  shall  be  charged  upon  or  payable  out  of  real 
property,  the  heir  or  devisee  shall  deduct  such  tax  therefrom  and  pay  it  to  the 
administrator,  executor  or  trustee  and  the  tax  shall  remain  a  lien  or  charge 
on  such  real  property  until  paid,  and  the  payment  thereof  shall  be  enforced 
by  the  executor,  administrator  or  trustee  in  the  same  manner  that  payment  of 
the  legacy  might  be  enforced,  or  by  the  prosecuting  attorney  under  section  16 
of  this  act. 

If  any  such  legacy  be  given  in  money  to  any  such  person  for  a  limited 
period,  the  administrator,  executor  or  trustee  shall  retain  the  tax  on  the  whole 
amount,  but  if  it  be  not  in  money  he  shall  make  application  to  the  court  having 
jurisdiction  of  an  accounting  by  him  to  make  an  apportionment  if  the  case 
require  it.  of  the  sum  to  be  paid  into  his  hands  by  such  legatees,  and  for  such 
further  order  relative  thereto  as  the  case  may  require. 

§  8.  If  any  debt  shall  be  proved  against  the  estate  of  the  decedent  after  the 
payment  of  the  legacy,  or  distributive  share  thereof,  from  which  any  such  tax 
has  been  deducted,  or  upon  which  it  has  been  paid  by  the  person  entitled  to 
such  legacy  or  distributive  share,  and  such  person  is  required  by  the  order  of 
the  circuit  court  having  jurisdiction  thereof  on  notice  to  the  auditor  of  state 
to  refund  the  amount  of  such  debts  or  any  part  thereof,  an  equitable  propor- 
tion of  the  tax  shall  be  repaid  to  him  by  the  executor,  administrator  or  trustee 
if  the  tax  has  not  been  paid  to  the  county  treasurer  or  repaid  by  such  treasurer 
or  state  treasurer,  if  such  tax  has  been  paid  to  him.  When  any  amount  of 
said  tax  shall  have  been  paid  erroneously  into  the  state  treasury  it  shall  be 
lawful  for  the  auditor  of  state,  upon  satisfactory  proofs  presented  to  him,  of 
the  facts,  to  require  the  amount  of  such  erroneous  or  illegal  payment  to  be 
refunded  to  the  executor,  administrator,  trustee,  person  or  persons  who  have 
paid  any  such  tax  in  error  from  the  treasury ;  or  the  said  auditor  of  state  may 
order,  direct  and  allow  the  treasurer  of  any  county  to  refund  the  amount  of 
any  illegal  or  erroneous  payment  of  such  tax  out  of  the  funds  in  his  hands  or 
custody  to  the  credit  of  such  taxes,  and  credit  him  with  the  same  in  his  quar- 
terly account  rendered  to  the  auditor  of  state  under  this  act ;  provided,  how- 
ever, that  all  applications  for  such  refunding  of  erroneous  taxes  shall  be  made 
within  one  year  from  the  payment  thereof,  or  within  one  year  after  the  rever- 
sal or  modification  of  the  order  fixing  such  tax. 

§  9.  Any  beneficiary  of  any  property  chargeable  with  a  tax  under  this  act 
and  any  executors,  administrators  and  trustees  thereof  may  elect  within 
eighteen  months  from  the  date  of  the  transfer  thereof  as  herein  provided  not 
to  pay  such  tax  until  the  person  or  persons  beneficially  interested  therein 
shall  come  into  the  actual  possession  or  enjoyment  thereof.  The  person  or  per- 
sons so  elected  shall  give  a  bond  to  the  state  in  a  penalty  of  three  times  the 
amount  of  any  such  tax,  with  such  sureties  as  the  circuit  court  of  the  proper 
county  may  approve,  conditioned  for  the  payments  of  such  tax  and  interest 
thereon,  at  such  time  or  period  as  the  person  or  persons  beneficially  inter- 
ested therein  may  come  into  the  actual  possession  or  enjoyment  of  such  prop- 
erty, which  bond  shall  be  filed  in  the  circuit  court.  Such  bond  must  be 
executed  and  filed  and  a  full  return  of  such  property  upon  oath  made  to 
the  circuit  court  within  one  year  from  the  date  of  such  transfer  thereof  as 
herein  provided,  and  such  bond  must  be  renewed  every  five  years. 

§  10.  Whenever  a  decedent  appoints  one  or  more  executors  or  trustees  and 
in  lieu  of  their  allowance  makes  a  devise  or  bequest  of  money  or  property  to 
them  which  would  otherwise  be  liable  to  said  tax,  or  appoints  them  his 
residuary  legatees,  and  said  devises  or  bequests,  or  residuary  legacies,  exceed 
what  would  be  a  reasonable  compensation  for  their  services,  such  excess  shall 
be  liable  to  such  tax,  and  the  court  having  jurisdiction  of  their  accounts  shall 
fix  the  amount  of  their  compensation. 

§  11.  If  a  foreign  executor,  administrator  or  trust«e  shall  assign  or  transfer 
any  stock  or  obligation  in  this  state  standing  in  the  name  of  a  decedent  liable 
to  any  such  tax,  the  tax  shall  be  paid  to  the  treasurer  of  the  proper  county  on 


698  INHERITANCE  TAXATION 

the  transfer  thereof.  No  safe  deposit  company,  bank  or  other  institution, 
person  or  persons  holding  securities  or  assets  of  a  decedent  shall  deliver  or 
transfer  the  same  to  the  executors,  administrators  or  legal  representatives  of 
said  decedent,  or  upon  their  order  or  request  unless  notice  of  the  time  and 
place  of  such  intended  transfer  be  served  upon  the  auditor  of  state  and  county 
treasurer  at  least  ten  days  prior  to  said  transfer;  nor  shall  any  such  safe 
deposit  company,  bank  or  other  institution,  person  or  persons  deliver  or  trans- 
fer any  securities  or  assets  of  the  estate  of  a  non-resident  decedent  without 
retaining  a  sufficient  portion  or  amount  thereof  to  pay  any  tax  which  may 
thereafter  be  assessed  on  account  of  the  transfer  of  such  securities  or  assets 
under  the  provisions  of  this  act  unless  the  auditor  of  state  consents  thereto 
in  writing;  and  it  shall  be  lawful  for  the  said  county  treasurer  or  auditor  of 
state  personally,  or  by  representative,  to  examine  all  securities  or  assets  at 
the  time  of  such  delivery  or  transfer. 

Failure  to  serve  such  notice  or  to  allow  such  examination  or  to  retain  a 
sufficient  portion  or  amount  to  pay  such  tax  as  herein  provided,  shall  render 
said  safe  deposit  company,  trust  company,  bank  or  other  institution,  person  or 
persons,  liable  to  the  payment  of  the  tax  due  upon  said  securities  or  assets  in 
pursuance  of  the  provisions  of  this  act. 

§  12.  Gives  the  circuit  court  having  jurisdiction  to  grant  letters  the  juris- 
diction in  transfer  tax  matters. 

§  13.  Subdivision  1  was  amended  by  the  Laws  of  1917  to  read  as  follows: 

"  The  circuit  court  upon  the  application  of  any  interested  party,  including 
the  auditor  of  state,  state  board  of  tax  commissioners,  county  treasurer,  or 
upon  its  own  motion,  shall  order  the  county  assessor  of  the  county  where  said 
court  is  sitting,  or  the  inheritance  tax  appraiser,  as  the  case  may  be,  to  fix 
the  fair  market  value  at  the  time  of  the  transfer  thereof  of  the  property  of 
persons  whose  estates  shall  be  subject  to  the  payment  of  any  tax  imposed  by 
this  act;  and  the  executors,  administrators  or  trustees  of  said  estates  shall, 
within  thirty  days  of  the  making  of  said  order  by  the  court,  file  with  said 
appraiser,  a  complete  schedule  of  all  the  property,  both  real  and  personal,  of 
which  the  decedent  died  seized,  or  possessed,  and  all  property,  both  real  and 
personal,  which  said  decedent  transferred  or  conveyed  within  two  years  of  his 
death,  without  valuable  consideration,  together  with  an  itemized  statement 
of  the  indebtedness  of  said  decedent:  provided,  that  if  said  county  assessor 
be  related  to  the  decedent  or  any  beneficiary  by  consanguinity  or  affinity, 
within  the  third  degree,  said  county  assessor  shall  thereby  be  disqualified  to 
appraise  said  property  and  said  court  shall  appoint  a  competent  and  qualified 
person  to  appraise  said  property." 

Sections  14  to  25  provide  the  usual  proceedings  for  the  valuation  of  estates 
and  the  collection  of  the  tax,  closely  following  the  New  York  practice.  All 
the  provisions  regarding  life  estates  and  remainders  and  the  present  taxation 
of  remainders  at  the  highest  possible  rate  are  adopted  from  the  New  York 
statute,  including  the  provision  for  the  compromise  of  uncertain  tax  claims. 
Life  estates  and  remainders  are  computed  on  mortality  tables  on  the  five  per 
cent  basis. 

§  26.  ( 1 )  The  words  "  estate  "  and  "  property,"  as  used  in  this  act,  shall  be 
taken  to  mean  the  property  or  interest  therein  passing  or  transferred  to  indi- 
vidual or  corporate  legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees,  or 
vendees,  and  not  as  the  property  or  interest  therein  of  the  decedent,  grantor, 
donor  or  vendor,  and  shall  include  all  property  or  interest  therein,  whether 
situated  within  or  without  this  state. 

2.  The  words  "  tangible  property,"  as  used  in  this  act,  shall  be  taken  to 
mean  corporeal  property  such  as  real  estate  and  goods,  wares  and  merchandise, 
and  shall  not  be  taken  to  mean  money,  deposits  in  bank,  shares  of  stock, 
bonds,  notes,  credits,  or  evidences  of  an  interest  in  property  or  evidences  of 
debt. 

3.  The  words  "  intangible  property,"  as  used  in  this  act,  shall  be  taken  to 
mean   incorporeal   property,   including  money,  deposits   in  banks,   shares   of 
stock,  bonds,  notes,  credits,  evidences  of  an  interest  in  property  and  evidences 
of  debt, 

4.  The  word  "  transfer,"  as  used  in  this  act,  shall  be  taken  to  include  the 


THE  STATE  STATUTES 


699 


passing  of  property  or  any  interest  therein  in  possession  or  enjoyment,  present 
or  future,  by  inheritance,  descent,  devise,  bequest,  grant,  deed,  bargain,  sale  or 
gift,  in  the  manner  herein  described. 

5.  The  words  "  the  intestate  laws  of  this  state,"  as  used  in  this  act,  shall  be 
taken  to  refer  to  all  transfers  of  property,  or  any  beneficial  interest  therein, 
effected  by  the  statute  of  descent  and  distribution  and  the  transfer  of  any 
property,  or  any  beneficial  interest  therein,  effected  by  operation  of  law  upon 
the  death  of  a  person  omitting  to  make  a  valid  disposition  thereof. 

§  27.  All  taxes  levied  and  collected  under  this  act,  less  any  expenses  of  col- 
lection, shall  be  paid  into  the  treasury  of  the  state  for  the  use  of  the  state,  and 
shall  be  applicable  to  the  expenses  of  the  state  government,  and  to  such  other 
purposes  as  the  legislature  may  by  law  direct. 

§  28.  Wherever  a  power  is  conferred  by  this  act  upon  the  circuit  court  the 
same  power  shall  be  deemed  to  be  conferred  upon  the  probate  and  superior 
courts  in  those  counties  which  have  a  probate  or  superior  court  as  a  court  of 
record  with  jurisdiction  in  probate  matters. 

Prior  statutes:    None. 

IOWA. 

Taxes  only  collaterals  and  strangers  whether  resident  or  non-resident. 


CLASS  OB  RELATIONSHIP 

Exemptions 

Rates 

Husband,  wife,  father,  mother,  lineal  descendant,  adopted  child  or  lineal 
descendant  of  such  child. 

All 

None 

Religious  and  educational  societies,  public  libraries  and  art  galleries, 
public  hospitals,  charitable  and  cemetery  associations. 

All 

None 

Aline  non-resident  in  United  States,  brother  or  sister  

If  less  than 

10% 

$1,000. 

All  other  aliens  not  residents  of  the  United  States  

If  less  than 

20% 

$1,000. 

All  others   

If  less  than 

5% 

$1,000. 

Nora —  Under  a  treaty  containing  the  "  most  favored  nation  "  clause  the  tax 
discriminating  against  collateral  alien  heirs  is  void.  Brown  v.  Daly,  172  Iowa  379. 

LAWS  OF  1911,  CHAPTER  68. 

§  1.  The  estates  of  all  deceased  persons,  whether  they  be  inhabitants  of  this 
state  or  not,  and  whether  such  estates  consist  of  real,  personal  or  mixed 
property,  tangible  or  intangible,  and  any  interest  in,  or  income  from  any  such 
estate  or  property,  which  property  is,  at  the  death  of  the  decedent  owner, 
within  this  state  or  is  subject  to,  or  thereafter,  for  the  purpose  of  distribution, 
is  brought  within  this  state  and  becomes  subject  to  the  jurisdiction  of  the 
courts  of  this  state,  or  the  property  of  any  decedent,  domiciled  within  this 
state  at  the  time  of  the  death  of  such  decedent,  even  though  the  property  of 
such  decedent  so  domiciled  was  situated  outside  of  the  state,  except  real 
estate  located  outside  of  the  state  passing  in  fee  from  the  decedent  owner, 
which  shall  pass  by  will  or  by  the  statutes  of  inheritance  of  this  or  any  other 
state  or  country,  or  by  deed,  grant,  sale,  gift  or  transfer  made  in  contempla- 
tion of  the  death  of  the  donor,  or  made  or  intended  to  take  effect  in  possession 
or  enjoyment  after  the  death  of  the  grantor  or  donor,  to  any  person,  or  for 
any  use  in  trust  or  otherwise,  other  than  to  or  for  the  use  of  persons,  or  uses 
exempt  by  this  act  shall  be  subject  to  a  tax. 

The  rest  of  the  section  and  the  first  five  subdivisions  of  section  2  are  covered 
by  the  foregoing  table. 


700  INHERITANCE  TAXATION 

§  2.  Subd.  6.  Bequests  for  the  care  and  maintenance  of  the  cemetery  or 
burial  lot  of  decedent  and  his  family,  and  bequests  not  to  exceed  five  hundred 
dollars  ($500.00)  in  any  estate,  to  or  for  the  performance  of  a  religious  service 
or  services  by  some  person  regularly  ordained,  authorized  or  licensed  by  any 
religious  society  to  perform  such  service  to  be  performed  for  or  in  behalf  of 
the  testator,  or  some  person  named  in  his  last  will,  provided  such  person  so 
named  is,  or  would  be  exempt  from  the  tax  imposed  by  this  a/ct. 

Subd.  7.  When  the  property  passes  to  a  municipal  or  political  corporation 
within  this  state  for  a  purely  public  purpose. 

§  3.  The  term  "  debts "  as  used  in  this  act  shall  include,  in  addition  to 
debts  owing  by  the  decedent  at  the  time  of  his  death,  the  local  or  state  taxes 
due  from  the  estate  in  January  of  the  year  of  his  death,  a  reasonable  sum  for 
funeral  expenses,  court  costs,  the  cost  of  appraisement  made  for  the  purpose 
of  assessing  the  collateral  inheritance  tax,  the  statutory  fees  of  executors, 
administrators  or  trustees  estimated  upon  the  appraised  value  of  the  property, 
the  amount  paid  by  the  executor  or  administrator  for  a  bond,  the  attorney  fee 
in  a  reasonable  amount  to  be  approved  by  the  court,  for  the  ordinary  probate 
proceedings  in  said  estate,  and  no  other  sum;  but  said  debts  shall  not  be 
deducted  unless  the  same  are  approved  and  allowed  by  the  court  within 
eighteen  (18)  months  from  the  death  of  the  decedent,  as  established  claims 
against  the  estate,  unless  otherwise  ordered  by  the  judge  or  court  of  the 
proper  county. 

§  4.  If  no  will  is  offered  or  administration,  had  within  four  months  the 
state  treasurer  may  apply. 

§  5.  Provides  for  the  appointment  of  appraisers. 

Sections  6,  7  and  8  provide  for  procedings  before  appraisers,  notice  to  par- 
ties in  interest,  objections  and  appeal  to  the  court  for  reappraisal. 

§  9.  Requires  an  appraisal  at  market  value  within  ninety  days. 

§  10.  Provides  that  where  value  is  certain  appraisal  may  be  dispensed  with 
on  consent  of  the  treasurer. 

Sections  11  and  12  provide  for  the  immediate  taxation  of  life  estates  and 
remainders. 

Sections  13  and  14  provide  for  the  filing  of  a  bond  by  remainderman  and  its 
renewal  every  two  years  if  it  is  desired  to  postpone  payment  of  tax  until  the 
remainder  falls  in ;  but  this  need  not  be  done  if  part  of  the  remainder  is  in 
real  estate  and  the  tax  is  secured  by  its  lien  thereon. 

§  15.  Provides  that  the  bond  shall  be  twice  the  amount  of  the  tax  and  in 
no  case  less  than  $500. 

§  16.  Imposes  a  fine  of  $200  for  removing  property  from  the  state  liable  to 
tax  without  paying  it  or  filing  a  bond. 

§  17.  Provides  for  determining  value  of  life  estates  and  remainders  by  mor- 
tality tables  on  basis  of  4  per  cent. 

Sections  18  and  19  require  the  executor  or  administrator  to  collect  the  tax 
from  the  beneficiaries,  gives  them  power  of  sale  of  property  to  pay  it,  and 
gives  the  state  treasurer  right  of  action  for  tax  against  executors  or  adminis- 
trators or  beneficiaries.  The  court  may  extend  time  of  payment  on  filing  a 
bond.  If  the  legacy  is  in  money  the  amount  of  the  tax  may  be  deducted. 

§  20.  Provides  that  no  final  settlement  of  accounts  shall  be  allowed  unless  it 
shows  that  the  tax  has  been  paid. 

§  21.  Gives  the  district  court  having  probate  jurisdiction  the  jurisdiction 
over  tax  procedings. 

§  22.  Taxes  excess  over  reasonable  compensation  of  bequest  to  executors  in 
lieu  of  commissions. 

§  23.  Where  legacy- charged  on  real  estate  heir  must  deduct  tax  before  pay- 
ing same  and  tax  declared  a  lien. 

§  24.  Taxes  must  be  paid  within  18  months  of  death,  thereafter  interest  at 
8  per  cent. 

§  25.  The  treasurer  may  require  information  as  to  estate  from  executors  or 
administrators  before  issuing  receipt  for  tax. 

§  26.  Requires  records  of  tax  liens  to  be  kept  by  the  court. 

§  27.  Upon  the  appointment  and  qualification  of  such  executor,  adminis- 
trator and  testamentary  trustee,  the  clerk  issuing  the  letters  shall  at  the 


THE  STATE  STATUTES  701 

same  time  deliver  to  him  a  blank  form  upon  which  he  shall  be  required  to 
make  detailed  report  of  the  following  facts: 

( 1 )  Name  and  last  residence  of  decedent. 

(2)  Date  of  death. 

(3)  Whether  or  not  he  left  a  will. 

(4)  Name  and  post-office  of  executor,  administrator  or  trustee. 

(5)  Name  and  post-office  of  surviving  wife  or  husband  if  any. 

(6)  If  testate,  name  and  post-office  of  each  beneficiary  under  will. 

(7)  Relationship  of  each  beneficiary  to  the  testator. 

(8)  If  intestate,  name  and  post-office  of  each  heir  at  law. 

(9)  Relationship  of  each  heir  at  law  to  decedent. 

( 10)  Inventory  of  all  real  estate  of  the  decedent,  giving  amount  and  descrip- 
tion of  each  tract. 

(11)  Whether  the  property  passes  in  possession  and  enjoyment  in  fee  for 
life  or  for  a  term  of  years. 

Within  thirty  days  after  his  qualification,  each  executor,  administrator  and 
testamentary  trustee  shall  make  and  return  to  the  clerk,  under  oath,  a  full  and 
detailed  report  as  indicated  in  the  preceding  paragraph,  any  will  to  the  con- 
terary  notwithstanding,  and  upon-  his  failure  to  do  so,  the  clerk  shall  forth- 
with report  his  delinquency  to  the  district  court  if  in  session,  or  to  at  judge  of 
said  court  if  in  vacation,  for  such  order  as  may  be  necessary  to  enforce  an 
observance  of  this  section.  If  it  appears  from  the  inventory  or  report  so  filed 
that  the  real  estate  or  any  part  of  it  is  subject  to  an  inheritance  tax  it  shall 
be  the  duty  of  the  executor  or  administrator  or  of  any  person  interested  in 
the  property  if  there  be  no  administration,  to  cause  a  lien  of  the  same  to  be 
entered  upon  the  lien  book  in  the  office  of  the  clerk  of  the  court  in  each 
county  where  each  particular  tract  of  said  real  estate  is  situated,  and  when 
eaid  real  estate  or  any  interest  therein,  is  subject  to  such  tax,  no  conveyance 
either  before  or  after  the  entering  of  said  lien,  shall  discharge  the  real  estate 
so  conveyed  from  said  lien,  no  final  settlement  of  the  account  of  any  executor, 
administrator  or  trustee  shall  be  accepted  or  allowed  unless  a  strict  compli- 
ance with  the  provisions  of  this  section  has  been  had  by  such  person.  Upon 
the  filing  of  such  report,  the  clerk  of  the  court,  shall  immediately  forward  a 
true  copy  thereof  to  the  treasurer  of  state. 

§  28.  Permits  the  court  to  extend  time  for  filing  inventory. 

§  29.  Requires  persons  entitled  to*  property  subject  to  tax  within  ninety 
days  to  make  report  to  the  court  similar  to  that  required  by  section  27. 

§§  30-31.  Provide  for  records  to  be  kept  by  the  clerk  of  the  county  court. 

§  32.  Prescribes  reports  to  be  made  by  the  clerks. 

§§  33-35.  Prescribe  the  duties  of  county  attorneys  in  collecting  the  tax, 
regulate  their  fees  and  require  them  to  make  reports  to  the  court. 

§  36.  Regulates  costs. 

§  37.  No  safe  deposit  company,  trust  company,  bank  or  other  institution, 
person  or  persons  holding  securities  or  assets  of  the  decedent  shall  deliver 
or  transfer  the  same  to  the  executor,  administrator  or  legal  representative  of 
said  decedent  unless  the"  tax  for  which  such  securities  or  assets  are  liable 
under  this  act  shall  be  first  paid,  or  the  payment  thereof  is  secured  by  bond 
as  herein  provided.  Il  shall  be  lawful  for  and  the  duty  of  the  treasurer  of 
state  personally,  or  by  any  person  by  him  duly  authorized,  to  examine  such 
securities  or  assets  at  the  time  of  any  proposed  delivery  or  transfer.  Failure 
to  serve  ten  days'  notice  of  such  proposed  transfer  upon  the  treasurer  of 
state  or  to  allow  such  examination  on  the  delivery  of  such  securities  or  assets 
to  such  executor,  administrator  or  legal  representative  shall  render  such  safe 
deposit  company,  trust  company,  bank  or  other  institution,  person  or  per- 
sons liable  for  the  payment  of  the  tax  upon  such  securities  or  assets  as  pro- 
vided in  this  act. 

§  38.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  trans- 
fer any  corporate  stock  or  obligations  in  this  state  standing  in  the  name  of  a 
decedent,  or  in  trust  for  a  decedent,  liable  to  such  tax,  the  tax  shall  be  paid 
to  the  treasurer  of  state  on  or  before  the  transfer  thereof;  otherwise  the 
corporation  permitting  its  stock  to  be  so  transferred  shall  be  liable  to  pay 


702  INHERITANCE  TAXATION 

such  tax,  interest  and  costs  and  it  is  the  duty  of  the  treasurer  of  state  to 
enforce  the  payment  thereof. 

§  39.  All  Iowa  corporations  organized  for  pecuniary  profit,  shall  on  July 
1st  of  each  year,  by  its  proper  officers  under  oath  make  a  full  and  correct 
report  to  the  treasurer  of  state  of  all  transfers  of  its  stocks  made  during  the 
preceding  year  by  any  person  who  appears  on  the  books  of  such  corporation 
as  the  owner  of  such  stock,  when  such  transfer  is  made  to  take  effect  at  or 
after  the  death  of  the  owner  or  transferor,  and  all  transfers  which  are  made 
by  an  administrator,  executor,  trustee,  referee,  or  any  person  other  than  the 
owner  or  person  in  whose  name  the  stocks  appeared  of  record  on  the  books 
of  such  corporation,  prior  to  the  transfer  thereof.  Such  report  shall  show  the 
name  of  the  owner  of  such  stocks  and  his  place  of  residence,  the  name  of  the 
person  at  whose  request  the  stock  was  transferred,  his  place  of  residence  and 
the  authority  by  virtue  of  which  he  acted  in  making  such  transfer,  the  name 
of  the  person  to  whom  the  transfer  was  made,  and  the  residence  of  such 
person;  together  with  such 'other  information  as  the  officers  reporting  may 
have  relating  to  estates  of  persons  deceased  who  may  have  been  owners  of 
stock  in  such  corporation.  If  it  appears  that  any  such  stock  so  transferred 
is  subject  to  tax  under  the  provisions  of  this  act,  and  the  tax  has  not  been 
paid,  the  treasurer  of  state  shall  notify  the  corporation  in  writing  of  its 
liability  for  the  payment  thereof,  and  shall  bring  suit  against  such  corpora- 
tion as  in  other  cases  herein  provided  unless  payment  of  the  tax  is  made 
within  sixty  (60)  days  from  the  date  of  such  notice. 

§  40.  Whenever  any  property  belonging  to  a  foreign  estate,  which  estate 
in  whole  or  in  part  passes  to  persons  not  exempt  herein  from  such  tax,  the 
said  tax  shall  be  assessed  upon  the  market  value  of  said  property  remaining 
after  the  payment  of  such  debts  and  expenses  aa  are  chargeable  to  the  prop- 
erty under  the  laws  of  this  state.  In  the  event  that  the  executor,  adminis- 
trator or  trustee  of  such  foreign  estate  files  with  the  clerk  of  the  court  hav- 
ing ancillary  jurisdiction,  and  with  the  treasurer  of  state,  duly  certified 
statements  exhibiting  the  true  market  value  of  the  entire  estate  of  the  dece- 
dent owner,  and  the  indebtedness  for  which  the  said  estate  has  been  adjudged 
liable,  which  statements  shall  be  duly  attested  by  the  judge  of  the  court 
having  original  jurisdiction,  the  beneficiaries  of  said  estate  shall  then  be 
entitled  to  have  deducted  such  proportion  of  the  said  indebtedness  of  the 
decedent  from  the  value  of  the  property  as  the  value  of  the  property  within 
this  state  bears  to  the  value  of  the  entire  estate. 

§  41.  Whenever  any  property,  real  or  personal,  within  this  state  belongs 
to  a  foreign  estate  and  said  foreign  estate  passes  in  part  exempt  from  the 
tax  imposed  by  this  act  and  in  part  subject  to  said  tax  and  there  is  no  specific 
devise  of  the  property  within  this  state  to  direct  heirs  or  if  it  is  within  the 
authority  or  discretion  of  the  foreign  executor,  administrator  or  trustee 
administering  the  estate  to  dispose  of  the  property  not  specifically  devised 
to  direct  heirs  or  devisees  in  the  payment  of  debts  owing  by  the  decedent  at 
the  time  of  his  death,  or  in  the  satisfaction  of  legacies,  devises,  or  trusts 
given  to  direct  or  collateral  legatees  or  devisees  or  in  payment  of  the  distribu- 
tive shares  of  any  direct  and  collateral  heirs,  then  the  property  within  the 
jurisdiction  of  this  state,  belonging  to  such  foreign  estate,  shall  be  subject 
to  the  tax  imposed  by  this  act,  and  the  tax  due  thereon  shall  be  assessed  as 
provided  in  the  next  preceding  section  of  this  act  relating  to  the  deduction 
of  the  proportionate  share  of  indebtedness.  Provided,  however,  that  if  the 
value  of  the  property  so  situated  exceeds  the  total  amount  of  the  estate 
passing  to  other  persons  than  those  exempt  hereby  from  the  tax  imposed  by 
this  act  such  excess  shall  not  be  subject  to  said  tax. 

§  42.  Provides  for  the  compromise  of  uncertain  tax  claims  by  the  state 
treasurer  and  attorney-general. 

§  43.  Whenever  the  heirs  or  persons  entitled  to  any  estate,  or  any  interest 
therein,  are  unknown  or  their  place  of  residence  cannot  with  reasonable  cer- 
tainty be  ascertained,  a  tax  of  5  per  cent,  shall  be  paid  to  the  treasurer  of 
state  upon  all  such  estates  or  interests,  subject  to  refund  as  provided  herein 
in  other  cases;  provided,  however,  that  if  it  be  afterwards  determined  that 
any  estate  or  interest  passes  to  aliens,  there  shall  be  paid  within  sixty  (60) 


THE  STATE  STATUTES  703 

days  after  such  determination  and  before  delivery  of  such  estate  or  property 
an  amount  equal  to  the  difference  between  5  per  centum,  the  amount  paid,  and 
the  amount  which  such  person  should  pay  under  the  provisions  of  this  act. 

§  44.  When  within  five  years  after  the  payment  of  the  tax,  a  court  of 
competent  jurisdiction  may  determine  that  property  upon  which  a  collateral 
inheritance  tax  has  been  paid  is  not  subject  to  or  liable  for  the  payment  of 
such  tax,  or  that  the  amount  of  tax  paid  was  excessive,  so  much  of  such  tax 
as  has  been  overpaid  to  the  treasurer  of  state  shall  be  returned  or  refunded 
to  the  executor  or  administrator  of  such  estate,  or  to  those  entitled  thereto, 
when  a  certified  copy  of  the  record  of  such  court  showing  the  fact  of  non- 
liability of  such  property  to  the  payment  of  such  tax  has  been  filed  with  the 
executive  council  of  the  state,  the  executive  council  shall  if  the  case  has  been 
finally  determined  issue  an  order  to  the  auditor  of  state  directing  him  to 
issue  a  warrant  upon  the  treasurer  of  state  to  refund  such  tax.  Such  order 
of  court  shall  not  be  given  until  fifteen  days'  notice  of  the  application  there- 
for shall  have  been  given  to  the  treasurer  of  state  of  the  time  and  place  of  the 
hearing  of  such  application,  which  notice  shall  be  served  in  the  same  manner 
as  provided  for  original  notices. 

§  45.  Estates  in  expectancy  which  are  contingent  or  defeasible  and  in 
which  proceedings  for  the  determination  of  the  tax  have  not  been  taken  or 
where  the  taxation  thereof  has  been  held  in  abeyance,  shall  be  appraised  at 
their  full,  undiminished  value  when  the  persons  entitled  thereto  shall  come 
into  the  beneficial  enjoyment  or  possession  thereof,  without  diminution  for  or 
on  account  of  any  valuation  theretofore  made  of  the  particular  estates  for 
purposes  of  taxation,  upon  which  said  estates  in  expectancy  may  have  been 
limited. 

When  an  estate,  devise,  or  legacy  can  be  divested  by  the  act  or  omission  of 
the  legatee  or  devisee,  it  shall  be  taxed  as  if  there  were  no  possibility  of  such 
divesting. 

When  a  devise,  bequest  or  transfer  is  one  in  part  contingent,  and  in  part 
vested  so  that  the  beneficiary  will  come  into  possession  and  enjoyment  of  a 
portion  of  his  inheritance  on  or  before  the  happening  of  the  event  upon  which 
the  possible  defeating  contingency  is  based,  a  tax  shall  be  imposed  and  col- 
lected upon  such  bequest  or  transfer  as  upon  a  vested  interest,  at  the  highest 
rate  possible  under  the  terms  of  this  act  if  no  such  contingency  existed; 
provided,  that  in  the  event  such  contingency  reduces  the  value  of  the  estate 
or  interest  so  taxed,  and  the  amount  of  tax  BO  paid  is  in  excess  of  the  tax 
for  which  such  bequest  or  transfer  is  liable  upon  the  removal  of  such  con- 
tingency, such  excess  shall  be  refunded  as  is  provided  in  section  forty-four 
(44)  of  this  act  in  other  cases. 

§  46.  In  the  construction  of  this  act,  the  words  "  collateral  heirs "  shall 
be  held  to  mean  all  persons  who  are  not  specifically  exempt  from  the  tax 
imposed  by  the  provisions  hereof.  The  word  "  person  "  shall  include  a  plural 
as  well  as  singular,  and  artificial  as  well  as  natural  persons.  This  act  shall 
not  be  construed  to  confer  upon  a  county  attorney  authority  to  represent  the 
state  in  any  case,  and  he  shall  represent  the  treasurer  of  state  only  when 
especially  authorized  by  him  to  do  so.  This  act  shall  apply  to  all  estates 
subject  to  taxation  under  the  law  repealed  by  this  act  if  the  tax  for  which  such 
estates,  are  liable  shall  not  have  been  paid  prior  to  the  taking  effect  of  this 
act. 

§  47.  Provides  for  records  to  be  kept  by  the  state  treasurer. 

§  48.  Repeals  former  statutes. 

Prior  Statutes:  1896,  Vol.  26,  ch.  28;  1898,  Vol.  27.  ch.  37,  1900,  Vol.  28,  ch. 
51;  1902,  Vol.  29,  chapters  55  and  63;  1904,  Vol.  30,  ch.  51;  1906,  Vol.  31,  ch. 
54;  1909,  Vol.  33.  ch.  92. 

Amendments:  Unimportant  amendments  are  made  by  L.  1913,  chapters  120 
and  121. 


704 


INHERITANCE  TAXATION 


KANSAS. 

Taxes  property  within  the  state  of  non-residents,  collaterals  and  strangers. 
TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OR  RELATIONSHIP 

Exemp- 
tions 

Rates  of  tax 

CLASS  A 
Husband,  wife,  lineal  ancestors,  lineal 
descendants,  adopted  child  and  its 
lineal  descendants,  wife  or  widow 
of  a  eon  or  husband  of  a  daughter. 

All 

None. 

Up  to 
$25,000 

$25,000 
to 
$50.000 

$50,000 
to 
$100,000 

$100,000 
to 
$500,000 

Excess 
over 
$500,000 

CLASS  B 
Brothers  and  sisters  of  decedent  .... 

$5,000 

3% 

5% 

7i% 

10% 

12i% 

CLASS  C 
All  others,  except  charitable  bequests 
mentioned  in  section  1. 

None 

5% 

7i% 

10% 

12i% 

15% 

NOTE. —  Where  the  beneficiary  is  entitled  to  property  out  of  the  state  the 
exemption  is  pro  rated. 


LAWS  1915,  CHAPTER  357,  BECAME  A  LAW  APRIL  10,  1915. 
(Amended  as  to  procedure  by    Chapter  319,  L.  1917.) 

Section  1.  All  property,  corporeal  or  incorporeal,  and  any  interest  therein, 
within  the  jurisdiction  of  the  state,  whether  belonging  to  the  inhabitants  of 
the  state  or  not,  which  shall  pass  by  will  or  by  the  laws  regulating  intestate 
succession,  or  by  deed,  grant  or  gift  made  in  contemplation  of  death,  or  made 
or  intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of  the 
grantor,  to  any  person,  absolutely  or  in  trust  — except  in  case  of  a  bona  fide 
purchase  for  full  consideration  in  money  or  money's  worth;  and  except  prop- 
erty to  or  for  the  use  of  literary,  educational,  scientific,  religious,  benevolent 
and  charitable  societies  or  institutions:  Provided,  such  use  entitles  the 
property  so  passing  to  be  exempt  from  taxation ;  and  except  property  to  or 
for  the  use  of  the  state,  a  county  or  a  municipality  for  public  purposes; 
shall  be  taxed  as  herein  provided. 

The  section  then  prescribes  the  rates  and  exemptions  as  shown  in  the  fore- 
going table. 

§  2.  Provides  that  the  tax  shall  be  due  within  one  year  of  death,  or,  if  a 
gift  in  contemplation  of  death,  at  the  time  of  the  transfer,  makes  the  tax  a 
lien  but  provides  that  the  lien  on  personal  property  is  satisfied  if  it  is  sold 
for  value  by  an  executor  or  administrator  and,  in  case  of  reai  estate,  if  a 
bond  to  pay  the  tax  is  filed. 

§  3.  Provides  that  remaindermen  may  defer  payment  of  tax  until  remainder 
falls  in  by  filing  a  sufficient  bond  and  renewing  it  every  five  years. 

§  4.  Provides  for  the  valuation  of  life  estates  and  remainders  on  American 
experience  tables  on  the  basis  of  5'  per  cent,  and  makes  further  provision  for 
the  filing  of  a  bond  by  remaindermen  in  three  times  the  amount  of  the  tax 
if  payment  is  elected  to  be  deferred. 

§  5.  Provides  for  payment  of  tax  on  contingent  remainders  when  they 
accrue  at  their  full  value  undiminished  by  the  life  estate  and  for  compromise 
of  tax  in  such  cases  on  consent  of  the  attorney-general. 

§  6.  Requires  the  executor  or  administrator  to  deduct  the  tax  from  money 
legacy  or  distributive  share  or  to  collect  it  from  beneficiary  before  delivery 
of  property. 


THE  STATE  STATUTES  705 

§  7.  Requires  the  heir  to  deduct  the  tax  before  paying  legacy  when  it  is  a 
charge  on  real  estate. 

§  8.  Provides  that  where  the  will  directs  payment  of  the  tax  out  of  a  fund 
no  tax  shall  be  charged  against  the  amount  so  appropriated. 

§  9.  Provides  that  the  probate  court  may  authorize  the.  sale  of  real  estate 
to  pay  the  tax  as  in  case  of  debts. 

§  10.  An  inventory  and  appraisal  under  path  of  every  estate  shall  be  filed 
in  the  probate  court  by  the  executor,  administrator  or  trustee  within  three 
months  after  his  appointment.  If  he  neglects  or  refuses  to  file  such  inventory 
and  appraisal  he  shall  be  liable  to  a  penalty  of  not  more  than  five  thousand 
dollars,  which  shall  be  recovered  in  the  proper  district  court  by  the  attorney- 
general  or  county  attorney  of  the  proper  county  at  the  instance  of  the  tax 
commission,  in  the  name  of  the  state,  for  the  use  of  the  state;  and  the  pro- 
bate judge  shall  notify  the  tax  commission  within  thirty  days  after  the 
expiration  of  said  three  months  of  the  failure  of  any  executor,  administrator 
or  trustee  to  file  an  inventory  and  appraisal  in  his  office. 

§  11.  The  probate  judge  shall  record  the  inventory  and  appraisal  of  every 
estate  which  is  filed  in  hie  office,  and  he  shall,  within  thirty  days  after  the 
same  has  been  filed,  send  by  mail  to  the  tax  commission  such  inventory  and 
appraisal  or  a  copy  thereof.  The  probate  judge  shall  also,  within  the  same 
period,  send  by  mail  to  the  tax  commission  a  copy  of  the  will  of  the  decedent, 
if  such  has  been  allowed  by  the  probate  court.  The  probate  judge  shall  also 
furnish  such  copies  of  papers  in  his  office  as  the  tax  commission  shall  require, 
and  shall  furnish  information  as  to  the  records  and  files  in  his  office  in  such 
form  as  the  tax  commission  may  require.  The  tax  commission  shall  excuse 
the  probate  court  from  filing  inventories  or  copies  of  inventories  and  of  wills 
of  estates  no  part  of  which  appears  to  be  subject  to  a  tax  under  the  pro- 
visions of  this  chapter. 

§  12.  Provides  that  where  it  is  made  to  appear  by  petition  of  any  party 
in  interest  that  administration  is  not  necessary  except  to  determine  the  tax, 
if  any,  the  tax  proceedings  may  be  had  on  such  petition.  If  no  will  has  been 
offered  or  administration  had  within  three  months  the  tax  commission  may 
proceed  in  the  same  way. 

§  13.  If  a  foreign  executor,  administrator  or  trustee  assigns  or  transfers 
any  stock  in  any  national  bank  located  in  this  state  or  in  any  corporation 
organized  under  the  laws  of  this  state  owned  by  a  deceased  non-resident  at 
the  date  of  his  death  and  liable  to  a  tax  under  the  provisions  of  this  act,  the 
tax  shall  be  paid  to  the  county  treasurer  of  the  proper  county  at  the  time 
of  such  assignment  or  transfer;  and  if  it  is  not  paid  when  due,  such  executor, 
administrator  or  trustee  shall  be  personally  liable  therefor  until  it  is  paid. 
A  bank  located  in  this  state  or  a  corporation  organized  under  the  laws  of  this 
state  which  shall  record  a  transfer  of  any  share  of  its  stock  made  by  .a  foreign 
executor,  administrator  or  trustee,  or  issue  a  new  certificate  for  a  share  of  its 
stock  at  the  instance  of  a  foreign  executor,  administrator  or  trustee,  before 
all  taxes-  imposed  thereon  by  the  provisions  of  this  act  have  been  paid,  shall 
be  liable  for  such  tax  in  an  action  of  contract  brought  by  the  county  attorney 
of  the  proper  county  or  the  attorney-general  in  the  name  of  the  state  and  at 
the  instance  of  either  the  probate  court  or  the  tax  commission. 

§  14.  Securities  or  assets  belonging  to  the  estate  of  a  deceased  non-resident 
shall  not  be  delivered  or  transferred  to  a  foreign  executor,  administrator  or 
legal  representative  of  said  decedent  without  serving  notice  upon  the  tax  com- 
mission of  the  time  and  place  of  such  intended  delivery  or  transfer  seven 
days  at  least  before  the  time  of  such  delivery  or  transfer.  The  tax  com- 
mission, by  any  member  or  by  representative,  may  examine  such  securities  or 
assets  prior  to  the  time  of  such  delivery  or  transfer.  Failure  to  serve  such 
notice  or  to  allow  such  examination  shall  render  the  person  or  corporation 
making  the  delivery  or  transfer  liable  to  the  payment  of  the  tax  due  upon 
said  securities  or  assets,  in  an  action  brought  by  the  county  attorney  of  the 
proper  county  or  the  attorney-general  in  the  name  of  the  state. 

§  15.  If  a  person  who  has  paid  such  tax  afterward  refunds  a  portion  of 
the  property  on  which  it  was  paid,  or  if  it  is  judicially  determined  that  the 

23 


706  INHERITANCE  TAXATION 

whole  or  any  part  of  such  tax  ought  not  to  have  been  paid,  such  tax,  or  the 
due  proportion  thereof,  shall  be  repaid  to  him  by  the  executor,  administrator 
or  truhtee. 

|  16.  The  value  of  the  property  upon  which  the  tax  is  computed  shall  be 
determined  by  the  tax  commission  and  notified  by  it  to  the  person  or  persons 
by  whom  the  tax  is  payable  and  to  the  probate  court  and  county  treasurer  of 
the  proper  county,  and  such  determination  shall  be  final  unless  the  value  so 
determined  shall  be  reduced  by  proceedings  as  herein  provided.  At  any  time 
within  three  months  after  such  determination  the  probate  court  shall,  upon 
the  application  of  any  party  interested  in  the  succession,  or  on  application 
of  the  executor,  administrator  or  trustee,  appoint  three  disinterested  apprais- 
ers, who,  first  being  sworn,  shall  appraise  such  property  at  its  actual  value 
in  money  as  of  the  day  of  the  death  of  the  decedent,  and  shall  make  return 
thereof  to  said  court.  Such  return,  when  accepted  by  said  court,  shall  be 
•final :  Provided,  that  any  party  aggrieved  by  such  appraisal  shall  have  an 
appeal  upon  matters  of  law.  One-half  of  the  fees  of  said  appraisers,  as  deter- 
mined by  the  judge  of  said  court,  shall  be  paid  by  the  county  treasurer,  and 
one-half  of  said  fees  shall  be  paid  by  the  other  party  or  parties  to  said 
proceedings. 

The  remaining  sections  16  to  27  relate  to  procedure  in  collecting  the  tax 
which  are  largely  repealed  by  the  1917  amendment. 


AMENDMENT  OF  1917. 

CHAPTER  319. 

Relating  to  the  Taxation  of  Legacies  and  Successions;  State  Too;  Commission 
Made  Inheritance  Tax  Commission. 

An  Act  relating  to  the  assessment  and  taxation  of  legacies  and  successions, 
creating  an  Inheritance  Tax  Commission  and  amending  sections  11219  and 
11221  of  the  General  Statutes,  1915,  and  defining  certain  terms  in  sec- 
tions 11203,  11219  and  11221. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Kansas.- 
Section  1.  From  and  after  the  passage  of  this  act  the  Tax  Commission  shall 
constitute  the  Inheritance  Tax  Commission  of  the  State  of  Kansas,  and  shall, 
as  such,  be  charged  with  the  duty  of  administering  all  laws  providing  for  the 
assessment  and  taxation  of  legacies  and  successions  within  this  state,  and 
all  duties  relative  to  legacy  and  succession  taxes  and  assessment  now  imposed 
by  law  upon  the  Tax  Commission  shall  be  performed  by  said  Inheritance  Tax 
Commission.  The  member  of  said  commission  who  has  served  longest  as 
member  of  the  Tax  Commission  shall  be  chairman,  and  the  secretary  of  the 
Tax  Commission  secretary  of  said  Inheritance  Tax  Commission.  The  words 
"  Tax  Commission "  whenever  and  wherever  used  in  chapter  357,  Laws  of 
1915,  and  in  acts  amendatory  thereof  and  supplemental  thereto,  shall  be 
taken  and  held  to  mean  Inheritance  Tax  Commission. 

§  2.  That  section  11219  of  the  General  Statutes  of  1915  be  and  the  same  is 
hereby  amended  so  as  to  read  as  follows:  Sec.  11219.  The  Inheritance  Tax 
Commission  shall  determine  the  amount  of  tax  due  and  payable  upon  any 
estate  or  upon  any  part  thereof,  and  shall  certify  the  amount  so  due  and 
payable  to  the  probate  court  and  to  the  county  treasurer  and  to  the  person 
or  persons  by  whom  the  tax  is  payable;  but  in  the  determination  of  the 
amount  of  any  tax  said  Inheritance  Tax  Commission  shall  not  be  required 
to  consider  any  payments  on  account  of  debts  or  expenses  of  administration 
which  have  not  been  allowed  by  the  probate  court  having  jurisdiction  of  the 
estate.  Payment  of  the  amount  so  certified  shall  be  a  discharge  of  the  tax. 
Any  executor,  administrator,  trustee  or  grantee  who  is  aggrieved  by  any 
determination  of  said  Inheritance  Tax  Commission  may,  at  any  time  before 
said  estate  shall  be  finally  closed,  and  after  the  payment  of  such  tax  to  the 
county  treasurer,  apply  by  petition  to  said  Inheritance  Tax  Commission  for 


THE  STATE  STATUTES  707 

the  abatement  of  said  tax  or  any  part  thereof,  and  if  said  commission  adjudge 
that  said  tax  or  any  part  thereof  was  wrongfully  exacted  it  shall  order  an 
abatement  of  such  portion  of  said  tax  as  was  assessed  without  authority  of 
law.  Upon  final  decision  ordering  an  abatement  of  any  portion  of  said  tax 
the  cAunty  treasurer  shall  refund,  from  any  legacy  and  succession  taxes  in 
his  hands,  the  amount  adjudged  to  have  been  illegally  exacted,  with  interest 
at  the  legal  rate,  without  any  further  act  or  resolve  making  appropriation 
therefor ;  provided,  however,  that  any  such  executor,  administrator,  trustee  or 
grantee  may  apply  to  any  district  court  of  competent  jurisdiction  for  a 
review  of  any  such  order,  and  until  final  decision  shall  be  entered  by  any  such 
court  such  money  shall  not  be  refunded  by  said  county  treasurer. 

§  3.  That  section  11221  of  the  General  Statutes  of  1915  be  and  the  same 
is  hereby  amended  so  as  to  read  as  follows:  Sec.  11221.  The  Inheritance  Tax 
Commission,  subject  to  the  right  of  any  party  interested  to  apply  to  any 
district  court  of  competent  jurisdiction  for  review,  shall  hear  and  determine 
all  questions  relative  to  said  tax,  and  the  attorney-general,  at  the  request  of 
the  Inheritance  Tax  Commission  or  of  the  county  treasurer,  shall  represent 
the  state  in  any  proceedings  brought  to  review  any  action  of  said  Inheritance 
Tax  Commission.  If  any  probate  court  shall  find  that  any  such  tax  remains 
due  and  that  proper  proceedings  have  not  been  taken  before  said  Inheritance 
Tax  Commission  for  abatement  thereof,  it  shall  order  the  executor,  adminis- 
trator, or  trustee  to  pay  the  same,  with  interest,  and  costs,  and  no  question 
regarding  the  validity  of  such  tax  shall  be  heard  in  such  court.  And  if  it 
appears  that  there  are  no  such  goods  or  assets  of  the  estate  in  his  hands,  the 
court  may  assess  the  amount  of  the  tax  against  the  executor,  administrator, 
or  trustee,  as  -if  for  his  own  debt,  and  may  enforce  compliance  with  such 
order  by  proper  procedure,  as  now  authorized  by  probate  practice;  but  the 
administrators,  executors,  trustees  and  grantees  hereinbefore  mentioned  shall 
be  personally  liable  only  for  such  taxes  as  shall  be  payable  while  they  con- 
tinue in  the  said  offices  or  have  title  as  such  grantees,  respectively.  In  the 
cases  where  the  tax  is  due  and  payable  by  and  collectible  from  the  bene- 
ficiary, all  actions  shall  be  prosecuted  by  the  attorney-general  or  the  county 
attorney  of  the  proper  county  in  the  name  of  the  state,  and  such  actions  may 
be  brought  in  the  same  courts  as  other  actions  for  money. 

§  4.  Whenever  any  person  shall  exercise  a  power  of  appointment  derived 
from  any  disposition  of  property,  such  appointment  when  made  shall  be 
deemed  to  be  a  disposition  of  property  by  the  person  exercising  such  power, 
taxable  under  the  provisions  of  chapter  357,  Laws  of  1915,  and  of  all  acts 
and  amendments  thereof  and  in  addition  thereto,  in  the  same  manner  as 
though  the  property  to  which  such  appointment  relates  belonged  absolutely 
to  the  donee  of  such  power,  and  had  been  bequeathed  or  devised  by  the  donee 
by  will;  and  whenever  any  person  possessing  such  power  of  appointment  so 
derived  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided 
therefor,  in  whole  or  in  part,  a  disposition  of  property  taxable  under  the 
provisions  of  sections  11219  and  11221  of  the  General  Statutes  of  1915,  and 
all  acts  and  amendments  thereof,  and  in  addition  thereto  shall  be  deemed  to 
take  place  to  the  extent  of  such  omissions  or  failure  in  the  same  manner  as 
though  the  persons  or  corporations  thereby  becoming  entitled  to  the  posses- 
sion or  enjoyment  of  the  property  to  which  such  power  related  had  succeeded 
thereto  by  a  will  of  the  donee  of  the  power  failing  to  exercise  such  power 
taking  effect  at  the  time  of  such  omission  or  failure. 

§  5.  That  original  sections  11219  and  11221  of  the  General  Statutes  of  1915 
be  and  the  same  are  hereby  repealed. 

§  6.  This  act  shall  take  effect  and  be  in  force  from  and  after  its  publica- 
tion in  the  official  state  paper. 

Approved  March  13,  1917. 

Published  in  official  state  paper  March  26,  1917. 

Prior  Statutes:  L.  1909,  ch.  248;  Repealed  by  L,.  1913,  ch.  330.  No  inherit- 
ance tax  from  January  25,  1913  to  April  10,  1915. 


708  INHERITANCE   TAXATION 

KENTUCKY. 

Taxea  collaterals  and  strangers  only. 

Taxes  property  within  the  state  of  non-residents,  collaterals  and  strangers. 

TABLE  OF  RATES  AND  EXEMPTIONS 


All  exempt  

No  tax 

husband  of  daughter, 
of  decedent. 

adopted  child  and  lawful  lineal  descendants 

$500  exempt; 

On    all    in 

excess  of 
exemp- 
tion, 5% 

LAWS  OF  1910,  CHAPTER  36.     BECAME  A  LAW  MARCH  21,  1910. 

Section  1.  All  property  which  shall  pass,  by  will  or  by  the  intestate  laws  of 
this  state,  from  any  person  who  may  die  seized  or  possessed  of  the  same 
while -a  resident  of  this  state,  or  if  such  decedent  was  not  a  resident  of  this 
state  at  the  time  of  death,  which  property,  or  any  part  thereof,  shall  be 
within  this  state,  or  any  interest  therein;  or  income  therefrom,  which  shall 
be  transferred  by  deed,  grant,  sale,  or  gift,  made  in  contemplation  of  the 
death  of  the  grantor  or  bargainer,  or  intended  to  take  effect  in  possession  or 
enjoyment  after  such  death,  to  any  -person  or  persons,  or  to  any  body  politic 
or  corporate,  in  trust  or  otherwise,  or  by  reason  whereof  any  person  or  body 
politic  or  corporate  shall  become  beneficially  entitled  in  possession  or  expect- 
ancy, to  any  property,  or  to  the  income  thereof. 

.The  rest  of  the  section  fixes  the  rates  and  exemptions  as  above. 

§  2.  When  any  grant,  gift,  devise,  legacy  or  succession  upon  which  a  tax 
is  .imposed  by  section  1  of  this  article  shall  be  an  estate,  income  or  interest 
for  a  term  of  years  or  for  life,  or  detenninable  upon  any  future  or  contingent 
event,  or  shall  be  a  remainder,  reversion  of  other  expectancy,  real  or  personal, 
the  entire  property  or  fund  by  which  such  estate,  income  or  interest  is  sup- 
ported, or  of  which  it  is  a  part,  shall  be  'appraised  immediately  after  the 
death  of  the  decedent,  and  the  fair  cash  value  thereof,  estimated  at  the  price 
it  would  bring  at  a  fair  voluntary  sale,  determined  in  -the  manner  provided 
in  section  11  of  this  article  and  the  tax  prescribed  shall  be  immediately  due 
and  payable  to  the  sheriff  or  collector  of  the  proper  county,  and,  together 
with  the  interest  thereon,  shall  be  and  remain  a  lien  on  said  property  until 
the  same  is  paid:  Provided,  that  the  person  or  persons,  or  body  politic  or 
corporate,  beneficially  interested  in  the  property  chargeable  with  said  tax, 
may  elect  not  to  pay  the  same  until  they  shall  come  into  the  actual  posses- 
sion or  enjoyment  of  such  property,  and  in  that  case  such  person  or  persons 
or  body  politic  or  corporate,  shall  execute  a  bond  to  the  commonwealth  of 
Kentucky,  in  a  sum  of  twice  the  amount  of  the  tax  arising  upon  personal 
estate,  with  such  sureties  as  the  county  court  may  approve,  conditioned  for 
the  payment  of  said  tax  and  interest  thereon,  at  such  time  or  period  as  they 
or  their  representatives  may  come  into  the  actual  possession  or  enjoyment  of 
such  property,  which  bond  shall  be  filed  in  the  office  of  the  county  clerk  of  the 
proper  county:  Provided,  further,  that  such  person  shall  make  a  full  and 
verified  return  of  such  property  to  said  court,  and  file  the  same  in  the  office 
of  the  county  clerk  within  one  year  of  the  death  of  the  decedent,  and  within 
that  period  enter  into  such  surety  and  renew  the  same  every  five  years. 

§  3.  Taxes  bequests  to  executors  in  lieu  of  commissions  at  all  in  excess  of 
reasonable  value  of  services. 

§  4.  Provides  that  all  taxes  are  due  at  death.  No  interest  for  eighteen 
months,  after  that  10  per  cent.  If  paid  within  nine  months  discount  of  5 
per  cent.  If  not  paid  within  eighteen  months  executor  or  administrator  is 
required  to  give  a  bond. 

§  5.  In  case  of  necessary  litigation  or  unavoidable  delay  interest  may  be 
reduced  to  6  per  cent. 


THE  STATE  STATUTES 


709 


§  6.  Any  administrator,  executor  or  trustee  having  in  charge  or  trust  any 
legacy  or  property  for  distribution  subject  to  the  said  tax,  shall  deduct  the 
tax  therefrom,  or  if  the  legacy  or  property  be  not  money,  he  shall  collect  the 
tax  thereon  upon  the  fair  cash  value  thereof,  from  the  legatee  or  person 
entitled  to  such  property,  and  he  shall  not  deliver,  or  be  compelled  to  deliver, 
any  specific  legacy  or  property  subject  to  tax  to  any  person  until  he  shall 
have  collected  the  tax  thereon  and  whenever  any  such  legacy  shall  be  charged 
upon  or  payable  out  of  real  estate,  the  executor,  administrator  or  trustee 
shall  collect  said  tax  from  the  distributee  thereof,  and  the  same  shall  remain 
a  charge  on  such  real  estate  until  paid;  if,  however,  such  legacy  be  given  in 
money  to  any  person  for  a  limited  period,  the  executor,  administrator  or 
trustee  shall  retain  the  tax  upon  the  whole  amount ;  but  if  it  be  not  in  money, 
he  shall  make  application  to  the  county  court  to  make  an  apportionment  if  the 
case  require  it,  of  the  sum  to  be  paid  into  his  hands  by  such  legatees,  and  for 
such  further  orders  relative  thereto  as  the  case  may  require. 

§  7.  Gives  power  of  sale  of  real  estate  to  pay  tax  as  in  case  of  debts. 

§  8.  Provides  for  tax  receipts  which  must  be  produced  by  executor  or  admin- 
istrator to  secure  final  accounting. 

§  9.  Provides  for  proportionate  refund  of  tax  where  debts  have  been  proved 
after  distribution. 

§  10.  Requires  foreign  executors  to  pay  tax  before  assigning  or  transferring 
stock  or  loans  within  the  state  makes  the  corporation  permitting  it  without 
payment  of  the  tax  liable. 

§  11.  Provides  for  appraisal  at  fair  market  value  and  computation  of  life 
estates  and  remainders  on  mortality  tables  at  5  per  cent,  basis. 

§  12.  Makes  it  a  misdemeanor  for  an  appraiser  to  accept  any  fee  or  reward. 

§  13.  Gives  the  county  court  of  the  residence  of  decedent  or  situs  of  the 
property  jurisdiction  in  transfer  tax  proceedings. 

§§  14-18.  Provide  for  the  collection  of  delinquent  taxes. 

§  19.  Repeals  former  statutes. 

Prior  Statutes     !•.  1906,  ch.  22. 

LOUISIANA. 

Taxes  property  of  non-residents  within  the  state. 


CLASS  OR  RELATIONSHIP 

Amount  of 
exemption 

Ra~te  of  tax 

Ascendants  or   descendants   of  deceased,   surviving   wife   or 
husband.     (Held  to  include  adopted  child.) 
Collateral  relatives  and  strangers  except  charitable,  educational 
and  religious  institutions. 

$10,000 
None 

2%  on  all  in  excess  of 
exemption. 
5%  on  all. 

LAWS  1906,  CHAPTER  109,  AS  AMENDED  BY  LAWS  1912,  CHAPTER  42. 

Section  1.  Prescribes  above  rates  on  all  "  inheritances,  legacies  and  other 
donations  mortis  causa"  and  exempts  bequests  to  "education,  religious  and 
charitable  institutions  "  and  provides  an  exemption :  "  When  the  property 
inherited,  bequeathed  or  donated  shall  have  borne  its  just  proportion  of 
taxes  prior  to  the  time  of  such  donation,  bequest  or  inheritance." 

§  2.  Makes  it  unlawful  for  beneficiary  to  be  in,  or  take  possession  without 
court  order.  In  case  he  does  he  may  not  renounce  and  remain  personally 
liable  if  he  disposes  of  the  property. 

§  3.  Requires  executor  or  administrator  after  paying  debts  to  proceed 
before  the  court  having  jurisdiction  of  the  probate  to  have  the  tax  fixed. 

§  5.  Requires  the  executor  or  administrator  to  pay  the  tax  out  of  funds 
in.  his  hands  if  sufficient,  if  not  to  collect  from  beneficiary  or  apply  to  the 
court  for  sale  of  the  property. 


710  INHERITANCE  TAXATION 

• 

§  6.  Forbida  delivery  to  beneficiary  until  tax  has  been  fixed  and  paid  other- 
wise executor  or  administrator  and  bond  personally  liable.  May  not  have 
discharge  until  tax  paid  or  decree  that  none  is  due. 

§  7.  Requires  personal  representatives  to  file  inventory. 

§  8.  Requires  the  heir  to  pay  tax  on  legacy  charged  on  real  estate. 

§  9.  Or  must  sell  it  to  pay  the  tax. 

§  10.  Forbids  delivery  of  legacy  until  tax  is  paid.  If  delivered  by  heir 
he  is  personally  liable. 

§  11.  The  tax  collector  within  six  months  may  bring  proceedings  and 
have  a  search  for  will. 

§  12.  Should  the  will  be  found  the  tax  collector  may  have  it  proved. 

§  13.  If  no  will  is  found  the  tax  collector  must  bring  proceedings  to  fix 
the  tax. 

§  14.  Permits  similar  proceedings  by  beneficiary. 

§  15.  Preserves  the  rights  of  creditors  of  deceased. 

§  16.  Forbids  entry  or  sale  by  heir  or  legatee  until  tax  is  paid. 

§  17.  Be  it  further  enacted,  etc.,  No  bank,  banker,  trust  company,  ware- 
houseman, or  other  depositary  and  no  person  or  corporation  or  partnership 
having  on  deposit  or  in  possession  or  control  any  moneys,  credits,  goods  or 
other  things  or  interest  rights  of  value  for  a  person  deceased,  or  in  which 
he  had  any  interest,  and  no  corporation  the  stock  or  registered  bonds  of 
which  are  owned  by  a  person  deceased  shall  deliver  or  transfer  such  moneys, 
credits,  stock,  bonds  or  other  things  or  rights  of  value  to  any  heir  or  legatee 
of  such  deceased  person,  unless  the  tax  due  thereon  under  this  act  shall  have 
been  paid,  or  unless  it  be  judicially  determined  in  the  manner  herein  pre- 
scribed that  no  tax  is  due  by  such  heir  or  legatee.  Otherwise  the  person  or 
corporation  so  making  delivery  or  transfer  shall  be  liable  for  the  said  tax. 
but  the  order  of  a  court  of  competent  jurisdiction,  directing  such  delivery 
or  transfer,  shall  be  full  authority  for  the  same. 

§  18.  Places  the  burden  of  proving  an  exemption  upon  the  person 
claiming  it. 

§  19.  Gives  jurisdiction  to  the  district  court  of  the  last  domicile  of 
decedent  or  where  the  property  of  a  non-resident  is  located. 

§  20.  Provides  for  representation  of  unknown  heirs  and  non-residents. 

§  21.  Fixes  the  fees  of  tax  collectors. 

§  22.  Provides  for  the  appointment  of  attorneys  to  collect  the  tax. 

§  23.  Be  it  further  enacted,  etc.,  In  fixing  the  value  of  any  legacy  or 
donation  mortis  causa  which  consists  in  whole  or  in  part  of  <an  annuity  or 
usufruct  or  right  of  use  or  habitation,  the  court  shall  consider  the  expectancy 
of  life  of  the  legatee  or  donee  according  to  the  table  known  as  the  American 
experience  table  of  mortality,  at  six  per  cent  per  annum  compound  interest. 

§  24.  Be  is  further  enacted,  etc.,  The  taxes  hereby  levied  shall  bear  interest 
at  the  rate  of  two  .per  cent  per  month,  beginning  six  months  after  the  death 
of  the  decedent ;  saving  to  any  heir,  legatee  or  donee  the  right  to  stop  the 
running  of  interest  against  him  by  paying  the  amount  of  his  tax  with  accrued 
interest,  or  by  tendering  the  same  to  the  tax  collector  in  the  manner  pre- 
scribed by  the  general  law;  provided,  however,  that  in  cases  in  which  the 
settlement  of  the  succession  is  not  unduly  delayed,  or  in  which  the  right  of 
any  party  to  receive  an  inheritance  or  legacy  is  contested,  and  in  all  cases  in 
which  the  failure  to  pay  tax  on  any  legacy  or  inheritance  within  the  period 
aforesaid  is  not  imputable  to  the  laches  of  the  heir  or  legatee,  the  court  may, 
in  its  discretion,  remit  such  interest. 

§  25.  Be  it  further  enacted,  etc.,  The  costs  of  all  proceedings  under  this  act 
shall  be  borne  by  the  mass  of  the  succession ;  provided,  that  in  cases  in  which 
it  seems  to  him  equitable  to  do  so  the  judge  shall  have  power  to  apportion 
the  costs  among  the  several  parties,  or  allow  any  party  to  retain  his  costs  out 
of  any  sum  found  to  be  due  by  him  for  tax  hereunder.  Provided,  the  pro- 
visions of  this  act  shall  affect  all  successions  not  finally  closed,  or  in  which 
the  final  account  has  not  been  filed. 

Prior  Statutes:  There  have  been  collateral  inheritance  taxes  since  1828. 
Those  of  recent  years  are  L.  1888,  ch.  109;  L.  1894,  ch.  130;  L.  1904,  ch.  45. 


THE  STATE  STATUTES 


711 


MAINE 

Taxed  property  of  non-residents  only  where  state  of  domicile  also  taxed  such 
property,  until  April  7,  1917,  when  reciprocal  provision  was  repealed.  All 
property  of  non-residents  within  the  state  now  taxed. 


TABLE  OF  RATES 


Rates  of 

tax  above 

$50,000 

In  excess 

RELATIONSHIP 

Exemption 

exemption 

to 

of 

up  to 

$100,000 

$100,000 

$50,000 

Father,   mother,   son,   daughter,   husband,   wife, 
adopted  child  or  adoptive  parent. 

$10,000 

1% 

11% 

2% 

Grandparents  and  other  lineal  ancestors  of  remoter 
degrees,  grandchildren  and  other  lineal  descend- 
ants of  remoter  degrees,  wife  or  widow  or  son,  or 
husband  or  widower  of  daughter. 

500 

1% 

11% 

2% 

Brother,  sister,  uncle,  aunt,  nephew,  niece,  or 

500 

4% 

41% 

5% 

cousin. 

All  other  heirs  or   legatees  except  educational, 

domestic,  charitable,  benevolent  or  religious 

institutions. 

500 

5% 

6% 

7% 

CHAPTER  8,  REVISED  STATUTES,  1903,  AS  AMENDED  BY  LAWS  OF 
1905,  CHAPTER  124;  LAWS  OF  1909,  CHAPTERS  186  AND  187:  LAWS 
OF  191  it  CHAPTER  163;  LAWS  OF  1913,  CHAPTERS  128  AND  190; 
LAWS  OF  1917,  CHAPTER  266. 

§  69.  All  property  within  the  jurisdiction  of  this  state,  any  any  interest 
therein,  whether  belonging  to  inhabitants  of  this  state  or  not,  and  whether 
tangible  or  intangible,  which  shall  pass  by  will,  by  the  intestate  laws  of  this 
state,  by  allowance  of  a  judge  of  probate  to  a  widow  or  child  by  deed,  grant, 
sale  or  gift,  except  in  cases  of  a  ~bona  fide  purchase  for  full  consideration  in 
money  or  money's  worth,  and  except  as  herein  otherwise  provided  made  or 
intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of  the 
grantor,  to  any  person  in  trust  or  otherwise  except  to  or  for  the  use  of  any 
educational,  charitable,  religious  or  benevolent  institution  in  this  state,  the 
property  of  which  is  by  law  exempt  from  taxation,  shall  be  subject  to  an. 
inheritance  tax  for  the  use  of  the  state  as  hereinafter  provided. 

Rates  and  exemptions  are  then  prescribed  aa  shown  in  the  above  table. 

The  section  concludes:  Administrators,  executors  and  trustees,  and  any 
grantees  under  such  conveyances  made  during  the  grantor's  life  shall  be 
liable  for  such  taxes,  with  interest,  until  the  same  have  been  paid.  [Aa 
amended  by  chap.  266,  L.  1917,  repealing  reciprocal  provisions:] 

§  70.  Whenever  property  shall  descend  by  devise,  descent,  bequest  or  grant 
to  a  person  for  life  or  for  a  term  of  years  and  the  remainder  to  another, 
except  to  or  for  the  use  of  any  educational,  charitable,  religious  or  benevolent 
institution  in  this  state,  the  value  of  the  prior  estate  shall  be  determined  by 
the  Actuaries'  Combined  Experience  Table  at  four  per  cent  compound  interest 
and  a  tax  imposed  at  the  rate  prescribed  in  the  preceding  section  for  the 
class  to  which  the  devisee,  legatee  or  grantee  of  such  estate  belongs  and  a 
tax  shall  be  imposed  at  the  same  time  upon  the  remaining  value  of  such 
property  at  the  rate  prescribed  in  said  section  for  the  class  to  which  the 
devisee,  legatee  or  grantee  of  such  remainder  belongs,  subject  to  the 
exemptions  provided  in  the  preceding  section.' 

In  every  case  in  which  it  is  impossible  to  compute  the  present  value  of  any 
interest  by  reason  of  such  interest  being  conditioned  upon  the  happening  of  a 
contingency  or  dependent  upon  the  exercise  of  a  discretion  or  subject  to  a  power 


712  INHERITANCE  TAXATION 

of  appointment  or  otherwise,  the  attorney-general  may  effect  such  settlement 
of  the  tax  as  he  shall  deem  for  the  best  interests  of  the  state  and  payment 
of  the  sum  so  agreed  upon  shall  be  a  full  satisfaction  of  such  tax. 

§  71.  Taxes  excess  over  reasonable  compensation  of  bequest  to  executors  in 
lieu  of  commissions. 

§  72.  Makes  taxes  due  at  two  years  after  death  but  if  legacy  paid  before  tax 
must  be  paid  at  same  time.  After  two  years  interest  at  6  per  cent  is  charged. 
At  the  time  of  payment  certificate  of  Probate  Court  showing  amount  due  must 
be  presented  to  state  treasurer.  Within  two  years  the  personal  representatives 
of  the  deceased  must  petition  the  Probate  Court  to  assess  the  tax.  If  not  so 
done  the  attorney-general  may  petition.  In  either  case  he  may  appear  in  tax 
proceedings.  The  tax  is  a  lien  on  real  estate  which  may  be  satisfied  by  pay- 
ment or  filing  a  bond. 

§  73.  Makes  executors  and  administrators  personally  liable  for  tax  and 
their  bondsmen  and  an  action  of  debt  may  be  maintained  against  them  for 
the  tax. 

§  74.  Prohibits  delivery  of  property  to  legatee  until  the  tax  is  paid. 

§  75.  Where  legacy  is  a  charge  on  real  estate  the  heir  must  deduct  tax 
before  paying  legacy  and  the  tax  remains  a  lien  until  paid. 

§  76.  Legacy  in  money  tax  to  be  deducted  but  if  not  in  money  court  makes 
an  apportionment. 

§  77.  Gives  power  of  sale  to  pay  tax  in  same  manner  as  to  pay  debts. 

§  78.  Requires  production  of  tax  receipt  before  final  settlement  allowed. 

§  79.  Provides  for  filing  copy  of  inventory  with  attorney-general. 

§  80.  Requires  executors  and  administrators  to  inform  board  of  assessors 
when  real  estate  passes  subject  to  the  tax. 

§  81.  Provides  for  appointment  of  appraisers  of  probate  judge  and  valua- 
tion by  them  of  estate  at  fair  market  value  on  due  notice  to  all  parties  in 
interest. 

§  82.  Gives  the  probate  court  having  jurisdiction  of  estate  the  jurisdiction 
in  transfer  tax  proceedings  and  gives  the  same  right  of  appeal  as  in  other 
cases. 

§  84.  Fixes  the  fees  on  judges  and  registers  of  probate. 

§  85.  Defines  "  person "  as  including  corporations  and  "  property "  as 
including  both  real  and  personal  property. 

§§  86,  87  and  88  make  provisions  for  the  enforcement  of  delinquent  taxes. 

§  89.  Where  a  non-resident  decedent  has  more  than  one  heir  or  his  prop- 
erty is  divided  among  more  than  one  legatee,  each  heir,  or  in  the  case  of  a  will, 
each  legatee  shall  be  held  to  receive  such  proportion  of  the  property  within 
the  jurisdiction  of  this  state  as  the  amount  of  all  property  received  by  him 
as  such  heir  or  legatee  bears  to  all  the  property  of  which  said  decedent  died 
possessed.  The  amount  of  property  of  the  estate  of  a  non-resident  which 
shall  be  exempt  from  the  payment  of  the  inheritance  tax  under  section  1  shall 
be  only  such  proportion  of  the  whole  exempted  amount  which  is  provided 
therein  for  the  estates  of  resident  decedents  as  the  amount  of  the  estate  of 
the  non-resident  actually  or  constnietively  in  his  state  bears  to  the  total  value 
of  the  non-resident  decedent's  estate  wherever  situated.'  [As  amended  by  chap. 
266,  L.  1917J] 

§  90.  Provides  for  reports  by  town  and  city  clerk  to  the  state  treasurer  of 
persons  dying  whose  estate  might  be  subject  to  tax. 

f  91.  When  the  personal  estate  passing  from  any  person,  not  an  inhabitant 
or  resident  of  this  state,  as  provided  in  section  sixty-nine  of  chapter  eight  of 
the  revised  statutes,  shall  consist  in  whole  or  in  part  of  shares  of  any  rail- 
road, or  street  railway  company  or  telegraph  or  telephone  company  incor- 
porated under  the  laws  of  this  state  and  also  of  some  other  state  or  country, 
so  much  only  of  each  share  as  is  proportional  to  the  part  of  such  company's 
lines  lying  within  this  state  shall  be  considered  as  property  of  such  person 
within  the  jurisdiction  of  this  state  for  the  purposes  of  this  chapter. 

§  92.  Made  reciprocal  provisions  concerning  the  property  of  non-residents 
and  was  repealed  by  chap.  266.  L,  1917. 

§  93.  Subject  to  the  provisions  of  section  ninety-two  if  a  foreign  executor, 
administrator  or  trustee  assigns  or  transfers  any  "stock  in  any  national  bank 


THE  STATE  STATUTES  713 

located  in  this  state  or  in  any  corporation,  organized  under  the  laws  of  this 
state,  owned  by  a  deceased  non-resident  at  the  date  of  his  death  and  liable  to 
a  tax  under  the  provisions  of  this  chapter,  the  tax  shall  be  paid  to  the  attor- 
ney-general at  the  time  of  such  assignment  or  transfer;  and  if  it  is  not  paid 
when  due  such  executor,  administrator  or  trustee  shall  be  personally  liable 
therefor  until  it  is  paid.  Subject  to  the  provisions  of  section  ninety-two  a 
bank  located  in  this-  state  or  a  corporation  organized  under  the  laws  of  this 
state  which  shall  record  a  transfer  of  any  share  of  its  stock  made  by  a  foreign 
executor,  administrator  or  trustee,  or  issue  a  new  certificate  for  a  share  of  ita 
stock  at  the  instance  of  a  foreign  executor,  administrator  or  trustee  before 
all  taxes  imposed  thereon  by  the  provisions  of  this  chapter  have  been  paid, 
shall  be  liable  for  such  tax  in  an-  action  of  debt  brought  by  the  attorney- 
general. 

^  §  94.  Subject  to  the  provisions  of  section  ninety-two  no  person  or  corpora- 
tion shall  deliver  or  transfer  any  securities  or  assets  belonging  to  the  estate  of 
a  non-resident  decedent  to  anyone  unless  authority  to  receive  the  same  shall 
have  been  given  by  a  probate  court  of  this  state,  and  upon  satisfactory  evi- 
dence that  all  inheritance  taxes  provided  for  by  this  chapter  have  been  paid, 
guaranteed  or  secured  as  hereinbefore  provided.  Any  person  or  corporation 
that  delivers  or  transfers  any  securities  or  assets  in  violation  of  the  provis- 
ions of  this  section  shall  be  liable  for  such  tax  in  an  action  of  debt  brought 
by  the  attorney-general. 

§  95.  Provides  for  proceedings  by  attorney-general  to  collect  tax. 

§  96.  Provides  that  the  statute  shall  not  be  retroactive. 

§  97.  Requires  the  attorney-general  to  pay  tax  collected  to  the  state 
treasurer. 

Prior  Statutes:  L.  1893,  ch.'  146;  L.  1895,  ch.  96;  L.  1901,  ch.  225;  L.  1903,  ch. 
156.  The  last  being  the  present  act. 

Amendment*:  L.  1905,  ch.  124,  L.  1909,  ch.  186  and  187;  L,.  1911,  ch.  163,  L. 
1913,  ch,  128 ;  L.  1917,  ch.  266. 

MARYLAND 

Taxes  collaterals  and  strangers  only. 

Taxes  personal  property  within  the  state  of  non-resident  collaterals  and 
strangers. 

TABLE  OF  RATES 


CLASS  o 

R  RELATIONSHIP 

Exemption 

Rates 

Father,  mother,  husband, 

AB 

No  tax 

AH  others  

$500 

If  over  9600 

5%  on  all 

PUBLIC  GENERAL  LAWS  OF  MARYLAND,  1904,  ARTICLE  81,  SECTION 
117,  AS  AMENDED  BY  LAWS  1908,  CHAPTER  695. 

Section  117.  All  estates,  real,  personal  and  mixed,  money,  public  and  pri- 
vate securities  for  money  of  every  kind  passing  from  any  person  who  may  die 
seized  and  possessed  thereof,  being  in  thia  state,  or  any  part  of  such  estate  or 
estates,  money  or  securities,  or  interest  therein,  transferred  by  deed,  win, 
grant,  bargain,  gift  or  sale,  made  or  intended  to  take  effect  in  possession  after 
the  death  of  the  grantor,  bargainer,  devisor  or  donor,  to  any  person  or  persons, 
bodies  politic  or  corporate,  in  trust  or  otherwise,  other  than  to  or  for  the 
use  of  the  father,  mother,  husband,  wife,  children  and  lineal  descendants  of  the 
grantor,  bargainer  or  testator,  donor  or  intestate,  shall  be  subject  to  a  tax  of 
five  per  centum  in  every  hundred  dollars  of  the  clear  value  of  such  estates, 


714  INHERITANCE  TAXATION 

money  or  securities;  and  all  executors  and  administrators  shall  only  be  dis- 
charged from  liability  for  the  amount  of  such  tax,  the  payment  of  which 
they  be  charged  with,  by  paying  the  same  for  the  use  of  this  state,  as  herein- 
after directed;  provided,  that  no  estate  which  may  be  valued  at  a  less  sum 
than  five  hundred  dollars  shall  be  subject -to  the  tax  imposed  by  this  section. 

§  118.  Requires  executors  and  administrators  to  pay  the  tax. 

§  119.  Gives  them  power  of  sale. 

§  120.  Tax  must  be  paid  within  thirteen  months  or  executor  or  administra- 
tor forfeits  his  commissions. 

§  121.  The  same  persons  who  appraise  the  personal  property  must  also  value 
the  real  estate. 

§  122.  Prescribes  oath  of  appraisers. 

§  123.  Where  property  is  in  two  counties  permits  appointment  of  additional 
appraiser. 

§§  124  to  129.  Prescribe  duties  of  appraisers,  make  the  tax  a  lien  on  real 
estate  for  four  years  and  provide  for  its  sale  if  necessary  to  pay  the  tax. 

§  130.  Whenever  any  estate,  real,  personal  or  mixed,  of  a  decedent  shall  be 
subject  to  the  tax  mentioned  in  the  thirteen  preceding  sections,  and  there  be  a 
life  estate  or  interest  for  a  term  of  years,  or  a  contingent  interest,  given  to  one 
party  and  the  remainder  or  reversionary  interest,  to  another  party,  the 
orphans'  court  of  the  county  or  city  in  which  administration  is  granted  shall 
determine  in  its  discretion  and  at  such  time  as  it  shall  think  proper  what  pro- 
portion the  party  entitled  to  said  life  estate,  or  interest  for  a  term  of  years, 
or  contingent  interest,  shall  pay  of  said  tax,  and  the  judgment  of  said  court 
shall  be  final  and  conclusive,  and  the  party  entitled  to  said  life  estate  or 
interest  for  a  term  of  years,  or  other  contingent  interest,  shall  within  thirty 
days  after  the  date  of  such  determination  pay  to  the  register  of  wills  his  pro- 
portion of  said  tax;  and  thereafter  the  said  court  shall  from  time  to  time 
after  the  determination  of  the  preceding  estate  and  as  the  remainder  of  said 
estate  shall  vest  in  the  party  or  parties  entitled  in  remainder  or  reversion 
determine  in  its  discretion  what  proportion  of  the  residue  of  said  tax  shall  be 
paid  by  the  party  or  parties  in  whom  the  estate  shall  so  vest ;  and  the  judg- 
ment of  the  said  court  shall  be  final  and  each  of  the  parties  successively  entitled 
in  remainder  or  reversion  shall  pay  his  proportion  of  said  tax  to  the  register 
of  wills  within  thirty  days  after  the  date  of  such  determination  as  to  him; 
and  the  proportion  of  the  tax  so  determined  to  be  paid  by  the  party  entitled 
to  the  life  interest  or  estate  shall  be  and  remain  a  lien  upon  such  interest  or 
estate  for  the  period  of  four  years  after  the  date  of  the  death  of  the  decedent, 
who  shall  have  died  seized  and  possessed  of  the  property;  and  the  proportion 
of  the  tax  so  determined  to  be  paid  by  the  persons  respectively  entitled  to  the 
remainder,  or  reversionary  interest,  shall  be  a  lien  on  such  interest  for  the 
period  of  four  years  from  the  date  of  which  such  interest  shall  vest  in  pos- 
session. 

§  131.  Whenever  an  interest  in  any  estate,  real,  personal  or  mixed,  less  than 
an  absolute  interest,  shall  be  devised  or  bequeathed  to  or  for  the  use  and 
benefit  of  any  person  or  object  not  exempted  from  the  tax  under  section  117, 
then  only  such  interest  so  devised  or  bequeathed  shall  be  liable  for  said  tax; 
and  it  shall  be  the  duty  of  the  orphans'  court  of  the  county  or  city  in  which 
administration  is  granted,  or  any  other  court  assuming  jurisdiction  over  such 
administration,  to  determine  as  soon  after  administration  is  granted  as  pos- 
sible, on  application  of  such  person  or  object,  the  value  of  such  interest 
liable  for  said  tax,  by  deducting  from  the  whole  value  of  the  estate  so  much 
thereof  as  shall  be  the  value  of  the  interest  therein,  of  any  person  who  under 
said  section  117,  is  exempt  from  said  tax,  and  the  residue  thereof  shall  be  the 
value  of  said  interest  upon  which  said  tax  is  payable;  and  said  tax  so  ascer- 
tained shall  be  paid  by  such  person  or  object  within  ninety  days  from  such 
ascertainment,  with  interest  thereon  at  six  per  cent  per  annum,  after  the 
expiration  of  twelve  (12)  months  from  the  date  of  the  death  of  the  decedent, 
under  whose  will  or  by  whose  intestacy  said  interest  is  acquired,  if  said  tax 
has  not  sooner  been  paid,  or  within  ninety  days  from  the  time  that  it  shall  be 


THE  STATE  STATUTES 


715 


ascertained  that  such  person  or  object  shall  be  entitled  to  any  such  interest 
in  any  estate;  but  such  tax  shall  bear  interest  at  the  rate  of  six  per  cent  per 
annum  from  the  expiration  of  twelve  (12)  months  from  said  death;  but  if 
such  person  or  object  shall  fail  to  pay  said  tax,  as  above  provided,  then  such 
person  or  object  shall  at  the  time  when  he,  she  or  it  comes  into  possession  of 
such  estate,  pay  a  tax  as  provided  for  in  said  section  117,  on  the  whole  value 
thereof. 

§  132.  Provides  for  sale  of  property  within  thirty  days  after  decree  if  tax 
is  not  paid. 

§  133.  Makes  bond  of  executors  and  administrators  liable  for  tax. 

§  134.  Provides  that  letters  of  delinquent  executor  or  administrator  may 
be  revoked  and  his  bondsmen  held  liable. 

§§  136  to  141.  Provide  for  the  collection  of  delinquent  taxes,  reports, 
receipts  and  fees. 

Prior  Statutes:  Maryland  has  taxed  collateral  inheritance  since  1844. 
Those  prior  to  1904  for  the  last  twenty  years  are  as  follows:  L.  1890,  ch.  249; 
L.  1892,  ch.  47»  and  564;  L.  1894,  ch.  493. 

MASSACHUSETTS 

No  tax  on  non-residents  execept  as  to  real  property  within  the  state. 

TABLE  OF   RATES 

RATE  or  SUCCESSION  TAX  TTNDEB  ACTS  OF  1912,  CHAPTEB  678.     IN  EFFECT  UPON  THE  ESTATES 
OF  PERSONS  DYING  ON  OR  AFTER  MAT  29,   1912 


Exemp- 
tion 

Rate  of  tax 

CLASS  OR  RELATIONSHIP 

Over 

Over 

Over 

Over 

Over 

$1,000 

$1,000 

$10,000 

$25,000 

$50,000 

$250,000 

or 

but  not 

but  not 

but  not 

but  not 

but  not 

Over 

under 

over 

over 

over 

over 

over 

$1,000,000 

$10,000 

$25,000 

$50,000 

$250.000 

$1,000,000 

1.  Charitable,  educational  or 

No  tax 

No  tax 

No  tax 

No  tax 

No  tax 

No  tax 

No  tax 

religious  societies  or  institu- 

tions exempt  from  local  tax- 

ation; trusts  for  charitable 

purposes  to  be  carried  out 
within  Massachusetts;  city 

or  townin  Massachusetts  for 

public  purposes. 
2.  Class  A.  Husband,  wife,  fa- 

No tax 

No  tax 

1% 

1% 

2% 

3% 

4% 

ther,  mother,  child,  adopted 

child,  adoptive  parent. 
3.  Class  A.  Lineal  ancestor. 

No  tax 

1% 

1% 

1% 

2% 

3% 

4% 

except   father   or   mother; 

lineal    descendant,    except 

child;  lineal  descendant  of 

adopted  child  ;  lineal  ances- 

tor of  adoptive  parent  ;  wife 
or  widow  of  a  son  ;  husband 

of  a  daughter. 

4.  Class   B.    Brother,   sister, 

half    brother,    half    sister, 

nephew,  niece. 
5.  All  others  (including  step- 

No tax 
No  tax 

2% 
5% 

3% 
5% 

5% 
5% 

6% 

6% 

7% 
7% 

8% 
8% 

children)  . 

—  •• 

In  no  event  is  the  tax  to  reduce  the  share  below  the  exempted  amount. 


716 


INHERITANCE  TAXATION 


RATES  PRIOR  TO  MAY  29,  1912 

RATE  OF  SCCCBBSION  TAX  TTNDEB  ACTS  OF  1907,  CHAPTER  563,  AS  CODIFIED  AND  AMENDED  BT 
Acre  OF  1909,  CHAPTER  490,  PART  IV.,  AND  ACTS  OF  1909,  CHAPTERS  268  AND  527.  In  EFFECT 
UPON  THE  ESTATES  OP  PERSONS  DYING  ON  OR  AFTER  SEPT.  1,  1907,  AND  PRIOR  TO  MAT  29,  1912. 


Exemp- 

Rate of  tax 

tion 

Over 

Over 

Over 

Over 

CLASS  OR  RELATIONSHIP 

$1,000 

$10,000 

$25,000 

$50,000 

$1,000 

but  not 

but  not 

but  not 

but  not 

Over 

or  under 

over 

over 

over 

over 

$100,000 

$10,000 

$25,000 

$50,000 

$100,000 

1.  Charitable,  educational  or  religious 

No  tax 

No  tax 

No  tax 

No  tax 

No  tax 

No  tax 

societies  or  institutions  exempt  from 

local  taxation;  trusts  for  charitable 

purposes   to   be   carried   out   within 

Machusetts;  city  or  town  in  Massa- 

chusetts for  public  purposes. 

2.  Class   A.      Husband,    wife,    father. 

No  tax 

No  tax 

1% 

1% 

1J% 

2% 

mother,  child,  adopted  child,  adoptive 

parent. 

3.  Class   A.      Lineal   ancestor,    except 

father  or  mother;  lineal  descendant, 

No  tax 

1% 

1% 

1% 

14% 

2% 

except    child;    lineal    descendant    of 

adopted  child  ;  lineal  ancestor  of  adop- 

tive parent;  wife  or  widow  of  a  son; 

husband  of  a  daughter. 

4.  Class  B.   Brother,  sister,  half  brother, 

No  tax 

3% 

3% 

4% 

4% 

s% 

half  sister,  nephew,  niece. 

5.  All  others  (including  step-children)  .  . 

No  tax 

5% 

5% 

5% 

5% 

5% 

In  no  event  is  the  tax  to  reduce  the  share  below  the  exempted  amount. 

LAWS  OF  1909,  CHAPTER  490,  AS  AMENDED  BY  LAWS  1912,  CHAPTER 
678,  AND  OTHER  STATUTES  TO  JAN.  x,  1916. 

Section  1.  All  property  within  the  jurisdiction  of  the  commonwealth,  cor- 
poreal or  incorporeal,  and  any  interest  therein,  belonging  to  inhabitants  of 
the  commonwealth,  and  all  real  estate  within  the  commonwealth,  or  any 
interest  therein,  belonging  to  persons  who  are  not  inhabitants  of  the  com- 
monwealth, which  shall  pass  by  will,  or  by  the  laws  regulating  intestate 
succession,  or  by  deed,  grant  or  gift,  except  in  cases  of  a  bona  fide  purchase 
for  full  consideration  in  money  or  money's  worth,  made  or  intended  to  take 
effect  in  possession  or  enjoyment  after  the  death  of  the  grantor,  to  any  per- 
son, absolutely  or  in  trust. 

Then  follow  the  rates  and  exemptions  as  shown  in  the  foregoing  table  for 
1912.  The  section  concludes:  All  taxes  under  this  act  shall  be  paid  out  of 
and  chargeable  to  capital  and  not  income,  unless  otherwise  provided,  in  a  will 
or  codicil,  or  deed  or  other  instrument  creating  the  grant  or  gift,  but  nothing 
herein  contained  shall  affect  any  right  of  the  commonwealth  to  collect  such 
tax  or  lien  therefor. 

Powers  of  appointment: 

Chapter  527,  L.  1909,  provides: 

f  8.  Whenever  any  person  shall  exercise  a  power  of  appointment  derived 
from  any  disposition  of  property  made  prior  to  September  first,  nineteen 
hundred  and  seven,  such  appointment  when  made  shall  be  deemed  to  be  a 
disposition  of  property  by  the  person  exercising  such  power,  taxable  under 
the  provisions  of  chapter  five  hundred  and  sixty-three  of  the  acts  of  the  year 
nineteen  hundred  and  seven,  and  of  all  acts  in  amendment  thereof  and  in 
addition  thereto,  in  the  same  manner  as  though  the  property  to  which  such 
appointment  relates  belonged  absolutely  to  the  donee  of  such  power,  and  had 
been  bequeathed  or  devised  by  the  donee  by  will;  and  whenever  any  person 
possessing  such  a  power  of  appointment  so  derived  shall  omit  or  fail  to  exercise 
the  same  within  the  time  provided  therefor,  in  whole  or  in  part,  a  disposition 


THE  STATE  STATUTES  717 

of  property  taxable  under  the  provisions  of  chapter  five  hundred  and  sixty- 
three  of  the  acts  of  the  year  nineteen  hundred  and  seven  and  all  acts  in  amend- 
ment thereof  and  in  addition  thereto  shall  be  deemed  to  take  place  to  the 
extent  of  such  omission  or  failure  in  the  same  manner  as  though  the  persona 
or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoyment  of  the 
property  to  which  such  power  related  had  succeeded  thereto  by  a  will  of  the 
donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at  the  time 
of  such  omission  or  failure. 

§  2,  chap.  490,  L.  1909,  applies  to  non-residents  and  is  repealed. 

§  3.  (As  amended  L.  1912,  ch.  678,)  Property  of  a  resident  of  the  com- 
monwealth which  is  not  therein  at  the  time  of  his  death  shall  not  be  taxable 
under  the  provisions  of  this  part  if  legally  subject  in  another  state  or  country 
to  a  tax  of  like  character  and  amount  to  that  hereby  imposed,  und  if  such  tax 
be  actually  paid  or  guaranteed  or  secured  in  accordance  with  law  in  such 
other  state  or  country;  if  legally  subject  in  another  state  or  country  to  a  tax 
of  like  character  but  of  less  amount  than  that  hereby  imposed  and  such  tax 
be  actually  paid  or  guaranteed  or  secured  as  aforesaid,  such  property  shall  be 
taxable  under  this  part  to  the  extent  of  the  difference  between  the  tax  thus 
actually  paid,  guaranteed  or  secured,  and  the  amount  for  which  such  property 
would  otherwise  be  liable  hereunder. 

§  4.  (As  amended  L.  1915,  chap.  152.)  Except  as  hereinafter  provided, 
taxes  imposed  by  the  provisions  of  this  act  shall  be  payable  to  the  treasurer 
and  receiver  general  by  the  executors,  administrators  or  trustees  at  the  expira- 
tion of  one  year  after  the  date  of  giving  bond  by  the  executors,  adminis- 
trators or  trustees  first  appointed.  If  the  probate  court,  acting  under  the 
provisions  of  section  thirteen  of  chapter  one  hundred  and  forty-one  of  the 
Revised  Laws,  has  ordered  the  executor  or  administrator  to  retain  funds  to 
satisfy  a  claim  of  a  creditor,  the  payment  of  the  tax  may  be  suspended  by  the 
court  to  await  the  disposition  of  such  claim.  In  all  cases  where  there  shall  be 
a  grant,  devise,  descent,  or  bequest  to  take  effect  in  possession  or  come  into 
actual  enjoyment  after  the  expiration  of  one  or  more  life  estates  or  a  term  of 
years,  the  taxes  thereon  shall  be  payable  by  the  executors,  administrators  or 
trustees  in  office  when  such  right  of  possession  accrues,  or,  if  there  is  no  such 
executor,  administrator  or  trustee,  by  the  person  or  persons  so  entitled  thereto, 
at  the  expiration  of  one  year  after  the  date  when  the  right  of  possession  accrues 
to  the  person  or  persons  so  entitled.  If  the  taxes  are  not  paid  when  due, 
interest  shall  be  charged  and  collected  from  the  time  the  same  became 
payable.  Property  of  which  a  decedent  dies  seized  or  possessed,  subject  to 
taxes  as  aforesaid,  in  whatever  form  of  investment  it  may  happen  to  be,  and  all 
property  acquired  in  substitution  therefor,  shall  be  charged  with  a  lien  for 
all  taxes  and  interest  thereon  which  are  or  may  become  due  on  such  prop- 
erty; but  said  lien  shall  not  affect  any  personal  property  after  the  same  has 
been  sold  or  disposed  of  for  value  by  the  executors,  administrators  or  trus- 
tees. The  lien  charged  by  this  act  upon  any  real  estate  or  separate  parcel 
thereof  may  be  discharged  by  the  payment  of  all  taxes  due  and  to  become  due 
upon  said  real  estate  or  separate  parcel,  or  by  an  order  or  decree  of  the 
probate  court  discharging  said  lien  and  securing  the  payment  to  the  common- 
wealth of  the  tax  due  or  to  become  due  by  bond  or  deposit  as  hereinafter  pro- 
vided, or  by  transferring  such  lien  to  other  real  estate  owned  by  the  owner  or 
owners  of  said  real  estate  or  separate  parcel  thereof. 

f  5.  In  every  case  where  there  shall  be  a  bequest  or  grant  of  personal 
estate  made  or  intended  to  take  effect  in  possession  or  enjoyment  after  the 
death  of  the  grantor,  to  take  effect  in  possession  or  come  into  actual  enjoy- 
ment after  the  expiration  of  one  or  more  life  estates,  or  a  term  of  years, 
whether  conditioned  upon  the  happening  of  a  contingency  or  dependent  upon 
the  exercise  of  a  discretion,  or  subject  to  a  power  of  appointment  or  otherwise, 
the  executor  or  administrator  or  grantee  may  deposit  with  the  treasurer  and 
receiver  general  a  sum  of  money  sufficient  in  the  opinion  of  the  tax  commis- 
sioner to  pay  all  taxes  which  may  become  due  upon  such  bequest  or  grant,  and 
the  person  or  persons  having  the  right  to  the  use  or  income  of  such  personal 
estate  shall  be  entitled  to  receive  from  the  commonwealth  interest  at  the  rate 
of  two  and  one-half  per  cent  per  annum  upon  such  deposit,  and  when  said 


718  INHERITANCE  TAXATION 

tax  shall  become  due  the  treasurer  and  receiver  general  shall  repay  to  the 
persons  entitled  thereto  the  difference  between  the  tax  certified  and  the 
amount  deposited;  or  any  executor,  administrator,  trustee  or  grantee,  or  any 
person  interested  in  such  bequest  or  grant  may  give  bond  to  a  judge  of  the 
probate  court  having  jurisdiction  of  the  estate  of  the  decedent,  in  such  amount 
and  with  such  sureties  as  said  court  may  approve,  with  the  condition  that  the 
obligor  shall  notify  the  tax  commissioner  when  said  tax  becomes  due  and  shall 
then  pay  the  same  to  the  treasurer  and  receiver  general. 

§  6.  Except  as  hereinafter  provided,  said  tax  shall  be  assessed  upon  the 
actual  value  of  the  property  at  the  time  of  the  death  of  the  decedent.  In 
every  case  where  there  shall  be  a  devise,  descent,  bequest  or  grant  to  take  effect 
in  possession  or  enjoyment  after  the  expiration  of  one  or  more  life  estates  or  a 
term  of  years,  the  tax  shall  be  assessed  on  the  actual  value  of  the  property  or 
the  interest  of  the  beneficiary  therein  at  the  time  when  he  becomes  entitled 
to  the  same  in  possession  or  enjoyment.  The  value  of  an  annuity  or  a  life 
interest  in  any  such  property,  or  any  interest  therein  less  than  an  absolute 
interest,  shall  be  determined  by  the  "American  Experience  Tables "  at  four 
per  cent  compound  interest. 

§  7.  Provides  for  the  immediate  payment  of  future  tax  claims  by  bene- 
ficiary at  his  election.  Where  they  are  uncertain  the  tax  commissioner  may 
compromise  with  the  consent  of  the  attorney-general. 

§  8.  Makes  bequest  to  executors  in  lieu  of  commissions  taxable  in  excess 
of  reasonable  compensation. 

§  9.  Requires  the  executor  or  administrator  to  deduct  the  tax,  collect  it 
from  the  legatee  or  from  the  heir  where  it  is  a  charge  on  real  estate. 

§  10.  Where  the  legacy  is  charged  on  real  estate  the  heir  is  required  to 
deduct  the  tax  before  paying  the  legacy  and  the  tax  is  made  a  lien  on  the  real 
estate. 

§  11.  Where  the  will  provides  for  payment  of  tax  on  legacy  from  another 
fund  no  tax  imposed  on  money  so  provided. 

§  12.  Executors  or  administrators  may  be  authorized  to  sell  real  estate  to 
pay  the  tax  in  the  same  way  as  in  case  of  debts. 

§  13.  Requires  the  executor  or  administrator  to  file  a  verified  inventory  and 
appraisal  with  the  probate  court  by  the  tax  commissioner  within  three  months 
of  appointment  under  penalty  of  $1,000  fine. 

§  14.  Requires  the  register  of  probate  to  furnish  the  tax  commissioner 
with  copies  of  the  inventory,  will  and  all  other  papers. 

§§  15  and  16  repealed  by  chap.  678,  L.  1912. 

§  17.  Requires  notice  of  any  petition  to  be  owed  on  the  tax  commission. 

§  18.  Provides  refund  of  taxes  erroneously  paid. 

§  19.  The  value  of  the  property  upon  which  the  tax  is  computed  shall  be 
determined  by  the  tax  commissioner  and  notified  by  him  to  the  person  or 
persons  by  whom  the  tax  is  payable,  and  such  determination  shall  be  final 
unless  the  value  so  determined  shall  be  reduced  by  proceedings  as  herein  pro- 
vided. At  any  time  within  three  months  after  such  determination  the  probate 
court  shall,  upon  the  application  of  any  party  interested  in  the  succession,  or 
of  the  executor,  administrator  or  trustee,  appoint  one  disinterested  appraiser 
or  three  disinterested  appraisers,  who,  first  being  sworn,  shall  appraise  such 
property  at  its  actual  market  value,  as  of  the  day  of  the  death  of  the  dece- 
dent and  shall  make  return  thereof  to  said  court.  Such  return,  when  accepted 
by  said  court,  shall  be  final ;  provided,  that  any  party  aggrieved  by  such 
appraisal  shall  have  an  appeal  upon  matters  of  law.  One  half  of  the  fees  of 
said  appraisers,  as  determined  by  the  judge  of  said  court,  shall  be  paid  by  the 
treasurer  and  receiver  general,  and  one  half  of  said  fees  shall  be  paid  by  the 
other  party  or  parties  to  said  proceeding. 

§  20.  The  tax  commissioner  shall  determine  the  amount  of  tax  due  and 
payable  upon  any  estate  or  upon  any  part  thereof,  and  shall  certify  the 
amount  so  due  and  payable  to  the  treasurer  and  receiver  general  and  to  the 
person  or  persons  by  whom  the  tax  is  payable;  but  in  the  determination  of  the 
amount  of  any  tax  said  tax  commissioner  shall  next  be  required  to  consider  any 
payments  on  account  of  debts  or  expenses  of  administration  which  have  not 
been  allowed  by  the  probate  court  having  jurisdiction  of  said  estate.  Pay- 


THE  STATE  STATUTES 


719 


ment  of  the  amount  so  certified  shall  be  a  discharge  of  the  tax.  An  executor, 
administrator,  trustee  or  grantee  who  is  aggrieved  by  any  determination  of 
the  tax  commissioner  may,  within  one  year  after  the  payment  of  any  tax  to 
the  treasurer  and  receiver  general,  apply  by  a  petition  in  equity  to  the  pro- 
bate court  having  jurisdiction  of  the  estate  of  the  decedent  for  the  abatement 
of  said  tax  or  any  part  thereof,  and  if  the  court  adjudges  that  said  tax  or  any 
part  thereof  was  wrongly  exacted  it  shall  order  an  abatement  of  such  portion 
of  said  tax  as  was  assessed  without  authority  of  law.  Upon  a  final  decision 
ordering  an  abatement  of  any  portion  of  said  tax,  the  treasurer  and  receiver 
general  shall  pay  the  amount  adjudged  to  have  been  illegally  exacted,  with 
interest,  without  any  further  act  or  resolve  making  appropriation  therefor. 

§  21.  Provides  that  the  probate  court  having  jurisdiction  of  the  estate 
shall  hear  and  determine  all  questions  arising  under  the  transfer  tax  statute 
with  the  usual  rights  of  appeal. 

§  22.  Gives  the  tax  commissioner  the  right  to  move  for  administration  if 
no  probate  proceedings  are  commenced  within  four  months  after  death. 

§  23.  Requires  executor  or  administrator  to  show  that  tax  has  been  paid  or 
adjusted  before  final  accounting  allowed. 

§  24.  Provides  for  the  collection  of  unpaid  taxes  by  the  treasurer  and 
receiver  general. 

§  25*.  Provides  that  the  law  applies  only  to  subsequent  transfers. 

§  26.  Concerns  the  construction  of  repealing  acts. 

§  27.  Is  a  saving  clause  as  to  other  legislation. 

Prior  Statutes:  L.  1891,  ch.  425;  L.  1892,  ch.  379;  L.  1893,  ch.  432;  L.  1895, 
ch.  307;  L.  1895,  ch.  430;  L.  1896,  ch.  108;  L.  1900,  ch.  371;  L.  1901,  ch.  277;  L. 
1901,  ch.  297;  L.  1902,  ch.  473;  L.  1903,  ch.  248;  L.  1903,  ch.  251;  L.  1903,  ch. 
276;  L.  1&04,  ch.  421;  L.  1905,  ch.  367;  L.  1905,  ch.  470;  L.  1906,  ch.  436;  L. 
1907,  ch.  452;  L.  1907,  ch.  563;  L.  1908,  p&.  840;  L.  1908,  ch.  268;  L.  1908,  ch. 
624;  L.  1909,  ch.  266;  L.  1909,  ch.  268. 


MICHIGAN 

Taxes  property  of  non-residents  within  the  state  except  real  estate  of  near 
relatives. 

TABLE  OF  RATES 


CLASS  OR  RELATIONSHIP 

Exemption 

Rate  of  tax 

Grandparents,  parents,  husband,  wife,  child,  brother,  sister, 
wife  or  widow  or  son,  husband  of  daughter,  adopted  or  mutu- 
ally acknowledged  child,  lineal  descendants. 

Wife, 
$5,000; 
others, 
$2,000 

If  property  exceeds 
exemption  1%  on 
all  personal  prop- 
erty. 

All  others  

$100 

5%  on  all  including 
real  estate. 

LAWS  1899,  CHAPTER  188,  AS  AMENDED. 

Section  1.  That  after  the  passage  of  this  act  a  tax  shall  be  and  is  hereby 
imposed  upon  the  transfer  of  any  property,  real  or  personal,  of  the  value  of 
one  hundred  dollars  or  over,  or  of  any  interest  therein  or  income  therefrom, 
in  trust  or  otherwise,  to  persons  or  corporations  not  exempt  by  law  from 
taxation  on  real  or  personal  property,  in  the  following  cases: 

First. —  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state 
from  any  person  dying  seized  or  possessed  of  the  property  while  a  resident  of 
this  state: 

Second. —  When  the  transfer  is  by  will  or  intestate  law  of  property  within 
the  state,  and  the  decedent  was  a  non-resident  of  the  state  at  the  timj  of  his 
death : 

Third. —  When  the  transfer  is  of  property  made  by  a  resident  or  by  non- 
resident ;  when  such  non-resident's  property  is  within  this  state,  by  deed,  grant, 


720  IKHEBITAJSTCE  TAXATION 

bargain,  sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor, 
vendor  or  donor  or  intended  to  take  effect  in  possession  or  enjoyment  at  or 
after  such  death.  Such  -tax  shall  also  be  imposed  when  any  such  person  or 
corporation  becomes  beneficially  entitled  in  possession  or  expectancy  to  any 
property  or  the  income  thereof  by  any  such  transfer,  whether  made  before  or 
after  the  passage  of  this  act.  Such  tax  shall  be  at  the  rate  of  five  per  cent 
upon  the  clear  market  value  of  such  property,  except  as  otherwise  prescribed 
in  the  next  section. 

§  2.  As  amended  by  chap.  30,  L.  1913,  and  chap.  198,  L.  1915,  prescribes 
the  rates  and  exemptions  as  shown  by  the  foregoing  table. 

§  3.  Makes  the  tax  a  lien  on  the  property  transferred  and  the  transferee  as 
well  as  the  executor  or  administrator  personally  liable  until  paid.  Provides 
for  receipts  which  must  be  produced  to  entitle  the  executor  or  administrator 
to  a  discharge.  Taxes  accrue  at  death-  except  in  the  case  of  remainders 
dependent  upon  some  uncertain  future  event  or  contingency  in  which  case 
they  are  due  when  the  beneficiary  comes  into  actual  possession. 

§  4.  Allows  a  discount  of  5  per  cent  if  the  tax  is  paid  within  twelve  months. 
If  not  paid  within  eighteen  months  interest  from  date  of  death  at  8  per  cent 
is  charged.  In  case  of  unavoidable  delay  interest  at  6  per  cent  from  and  of 
eighteen  months  is  charged. 

§  5.  Requires  the  executor  or  administrator  to  deduct  the  tax  from  a 
money  legacy,  to  collect  it  from  the  beneficiaries  in  case  of  property  to  whom 
it  may  not  be  delivered  until  the  tax  is  paid.  If  legacy  is  made  a  charge  on 
real  property  the  heir  or  devisee  must  deduct  the  tax  before  paying  the  legacy. 

§  6.  Makes  provision  for  proportionate  fund  if  debts  are  proved  after 
distribution. 

§  7.  Provides  that  remaindermen  may  elect  not  to  pay  the  tax  until  they 
get  the  property  by  filing  a  bond  in  three  times  the  amount  of  the  tax  and  an 
inventory  of  the  property  within  one  year  of  death  and  renewing  bond  every 
five  years. 

§  8.  Taxes  bequests  to  executors  in  lieu  of  the  tax  in  excess  of  reasonable 
value  of  services. 

§  9.  As  amended  by  chap.  17,  L.  1913,  and  chap.  195,  L.  1915,  copies  the 
Illinois  statute  with  regard  to  transfers  by  foreign  executors  and  the  duties 
of  banks  and  safe  deposit  companies  to  certify  the  comptroller,  present  on 
examination  ^and  retain  enough  assets  to  pay  the  tax  or  themselves  become 
liable  to  penalty  at-  suit  of  the  attorney-general. 

§  10.  Gives  jurisdiction  to  the  probate  court  administering  the  estate  in 
transfer  tax  matters. 

|  11.  Provides  for  the  appointment  of  appraisers  and  for  the  computation 
of  life  estates  and  remainders  by  the  commissioner  of  insurance  on  mortality 
tables  at  the  5  per  cent  rate. 

§§12  and  13.  Provide  for  hearings  before  the  appraiser  on  due  notice,  his 
report,  appeal  and  rehearing  before  the  probate  judge  closely  following  the 
New  York  practice. 

§  14.  Provides  for  proceedings  to  collect  delinquent  taxes. 

§§  15,  16  and  17.  Provide  for  the  furnishing  of  duplicate  receipts,  fees  of 
the  county  treasurer  and  the  keeping  of  records  in  the  probate  court. 

§§  18*  to  23).  Provide  for  details  as  to  records,  reports  and  the  disposition 
of  taxes  collected. 

§  21.  (As  amended  by  St.  1907,  c.  328.)  The  word  "estate"  and  "prop- 
erty "  as  used  in  this  act  shall  be  taken  to  mean  the  property  or  interest  therein 
of  the  testator,  intestate,  grantor,  bargainer  or  vendor,  passing  or  transferred 
to  those  not  herein  specifically  exempted  from  the  provisions  of  this  act,  and  not 
as  the  property  or  interest  therein  passing  or  transferred  to  the  individual 
legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees  or  vendees,  and  shall 
include  all  property  or  interest  therein  whether  situated  within  or  without  this 
state  and  including  all  property  represented  or  evidenced  by  note,  certificate, 
stock,  land  contract,  mortgage  or  other  kind  or  character  of  evidence  thereof, 
and  regardless  of  whether  any  such  evidence  of  property  is  owned,  kept  or 
possessed  within  or  without  this  state.  The  word  "  transfer  "  as  used  in  this 
act  shall  be  taken  to  include  the  passing  of  property  or  any  interest  therein  in 


721 


possession  or  enjoyment,  present  or  future,  by  inheritance,  descent,  devise. 
bequest,  grant,  deed,  bargain,  sale  or  gift  in  the  manner  herein  prescribed. 
The  words-  "  county  treasurer,"  "  prosecuting  attorney,"  as  used  in  this  act 
shall  be  taken  to  mean  the  county  treasurer  or  projecting  attorney  of  the 
county  having  jurisdiction  in  section  ten  of  this  act. 

Amendments:  L.  1903,  ch.  195;  L.  1907;  L.  1907,  ch.  328;  Lu  1909,  ch,  44;  I* 
1911,  ch.  73;  Lu  1313,  ch.  17  and  30;  L..  1915,  ch.  195  and  198. 


Taxes  all  property  of  nonresidents  within  the  state.     A  reciprocal  provis- 
ion inserted  by  L.  1911  was  repealed  by  L.  1913,  chap.  565. 


CLASS  OB  RELATIONSHIP 

Amount 
exemp- 
tion 

Graded  rates  of  tax 

Above 
exemp- 
tion to 
$15,000 

$15,000 
to 
$30,000 

$30,000 
to 
$50,000 

$50,000 
to 
$100,000 

Excess 
over 
$100,000 

$10,000 

1% 

U% 

2% 

21% 

3% 

Husband,  lineal  ancestor,  adopted 
or  mutually  acknowledged  child. 

Lineal      an- 
ces  t  or  , 
$3,000; 
other*, 
$10,000. 

li% 

2t% 

3% 

3f% 

4i% 

Brother  or  sister,  their  descendants, 
eon-in-law,  daughter-in-law. 

$1,000 

3% 

4i% 

6% 

71% 

9% 

Uncles,  aunts  or  their  descendants. 

$250 

4% 

6% 

8% 

10% 

12% 

Public  hospitals,  academy,  college, 
university,  seminary  of  learning, 
church  or  institution  for  public 
charity. 

$2,500 

2% 

3% 

4% 

5% 

6% 

All  others  

$100 

5% 

7i% 

10% 

12i% 

15% 

LAWS  OP  1911,  CHAPTER  209,  AS  AMENDED  BY  LAWS  1913,  CHAPTERS 

455,  574  AND  565. 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  any  transfer  of  prop- 
erty, real,  personal  or  mixed,  or  any  interest  therein,  or  income  therefrom  in 
trust  or  otherwise,  to  any  person,  association  or  corporation,  except  county, 
town  or  municipal  corporation  within  the  state,  for  strictly  county,  town  or 
municipal  purposes,  in  the  following  cases: 

( 1 )  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from 
any  person  dying  possessed  of  the  property  while  a  resident  of  the  state. 

(2)  When  a  transfer  is  by  will  or  intestate  law,  of  property  within  the 
state  or  within  its  jurisdiction  and  the  decedent  was  a  non-resident  of  the 
state  at  the  time  of  his  death. 

(3)  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non- 
resident "when  such  non-resident's  property^  is  within  this  state,  or  within  its 
jurisdiction,  by  deed,  grant,  bargain,  sale  or  gift,  made  in  contemplation  of  the 
death  of  the  grantor,  vendor  or  donor,  or  intended  to  take  effect  in  possession 
or  enjoyment  at  or  after  such  death. 

( 4 )  Such  tax  shall  be  imposed  when  any  such  person  or  corporation  become 
beneficially  entitled,  in  possession  or  expectancy  to  any  property  or  the  income 
thereof,  by  any  such  transfer  whether  made  before  or  after  the  passage  of  this 
act. 

(5)  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appoint- 
ment derived  from  any  disposition  of  property  made  either  before  or  after  the 


722  INHERITANCE  TAXATION 

passage  of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  act  in  the  same  manner  as  though  the 
property  to  which  such  appointment  relates  belonged  absolutely  to  the  donee 
of  such  power  and  had  been  bequeathed  or  devised  by  such  donee  by  will ;  and 
whenever  any  person  or  corporation  possessing  such  a  power  of  appointment 
so  derived  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided 
therefor,  in  whole  or  in  part  a  transfer  taxable  under  the  provisions  of  this 
act  shall  be  deemed  to  take  place  to  the  extent  of  such  omission  or  failure,  in 
the  same  manner  as  though  the  persons  or  corporations  thereby  becoming 
entitled  to  the  possession  or  enjoyment  of  the  property  to  which  such  power 
related  had  succeeded  thereto  by  a  will  of  the  donee  of  the  power  failing  to 
exercise  such  power,  taking  effect  at  the  time  of  such  omission  or  failure. 

§  2.  The  tax  so  imposed  shall  be  computed  upon  the  true  and  full  value  in 
money  of  such  property  at  the  rates  hereinafter  prescribed  and  only  upon  the 
excess  of  the  exemptions  hereinafter  granted. 

§§  2a,  b.   Prescribes  the  rates  and  exemptions  of  the  foregoing  table. 

§  3.  Provides  that  the  tax  accrues  at  death,  is  payable  within  one  year,  and 
for  the  valuation  of  life  estates  and  remainders  by  the  commissioner  of  insur- 
ance on  mortality  tables  reckoned  on  the  5  per  cent  basis. 

Where  property  is  devised  in  court  it  shall  be  valued  as  if  received  by  the 
beneficiaries  directly. 

The  section  further  provides: 

Where  an  estate  for  life  or  for  years  can  be  divested  by  the  act  or  omission 
of  the  legatee  or  devisee,  it  shall  be  taxed  as  if  there  were  no  possibility  of 
such  divesting. 

When  property  is  transferred  in  trust  or  otherwise,  and  the  rights,  interest 
or  estates  of  the  transferee  are  dependent  upon  contingencies  or  conditions 
whereby  they  may  be  wholly  or  in  part  created,  defeated,  extended  or  abridged, 
a  tax  shall  be  imposed  upon  said  transfer  at  the  highest  rate  which,  on  the 
happening  of  any  of  said  contingencies  or  conditions,  would  be  possible  under 
the  provisions  of  this  act,  and  such  tax  so  imposed  shall  be  due  and  payable 
forthwith  by  the  executors  or  trustees  out  of  the  property  transferred;  pro- 
vided, however,  that  on  the  happening  of  any  contingency  whereby  the  said 
property,  or  any  part  thereof,  is  transferred  to  a  person  or  corporation  exempt 
from  taxation  under  the  provisions  of  this  act,  or  to  any  person  taxable  at  a 
rate  less  than  the  rate  imposed  and  paid,  such  person  or  corporation  shall  be 
entitled  to  a  return  of  so  much  of  the  tax  imposed  and  paid  as  if  the  difference 
between  the  amount  paid  and  the  amount  which  said  person  or  corporation 
should  pay  under  the  provisions  of  this  article,  with  interest  thereon  at  the 
rate  of  three  per  centum  per  annum  from  the  time  of  payment.  Such  return 
of  overpayment  shall  be  made  in  the  manner  provided  by  section  21 -c  (sec- 
tion 9  of  this  act). 

In  estimating  the  value  of  any  estate  or  interest  in  property,  to  the  beneficial 
enjoyment  or  possession  whereof  there  are  persons  or  corporations  presently 
entitled  thereto,  no  allowance  shall  be  made  on  account  of  any  contingent 
incumbrance  thereon,  nor  on  account  of  any  contingency  upon  the  happening 
of  which  the  estate  or  property,  or  some  part  thereof  or  interest  therein 
might  be  abridged,  defeated  or  diminished;  provided,  however,  that  in  the 
event  of  such  incumbrance  taking  effect  as  an  actual  burden  upon  the  interest 
of  the  beneficiary  or  in  the  event  of  the  abridgment,  defeat  or  diminution  of 
said  estate  or  property,  or  interest  therein,  as  aforesaid,  a  return  shall  be 
made  to  the  person  properly  entitled  thereto  of  a  proportionate  amount  of  such 
tax  on  account  of  the  incumbrance  when  taking  effect,  or  so  much  as  will 
reduce  the  same  to  the  amount  which  would  have  been  assessed  on  account  of 
the  actual  duration  or  extent  of  the  estate  or  interest  enjoyed.  Such  return 
of  tax  shall  be  made  in  the  manner  provided  by  section  21-c  (section  9  of 
this  act). 

Where  any  property  shall,  after  the  passage  of  this  act,  be  transferred  sub- 
ject to  any  charge,  estate  or  interest,  determinable  by  the  death  of  any  person, 
or  at  any  period  ascertainable  only  by  reference  to  death,  the  increase  accruing 
to  any  person  or  corporation  upon  the  extinction  or  determination  of  such 
charge,  estate  or  interest,  shall  be  deemed  a  transfer  of  property  taxable  under 
the  provisions  of  this  act  in  the  same'  manner  as  though  the  person  or  corpo- 


THE  STATE  STATUTES  723 

ration  beneficially  entitled  thereto  had  then  acquired  such  increase  from  the 
person  from  whom  the  title  to  their  respective  estates  or  interests  is  derived. 

The  tax  on  any  devise,  bequest,  legacy,  gift  or  transfer  limited,  conditioned, 
dependent  or  determinate  upon  the  happening  of  any  contingency  or  future 
event,  by  reason  of  which  the  full  and  true  value  thereof  cannot  be  ascertained 
as  provided  for  by  the  provisions  of  this  act  at  or  before  the  time  when  the 
taxes  become  due  and  payable  as  hereinbefore  provided,  shall  accrue  and 
become  due  and  payable  when  the  person  or  corporation  beneficially  entitled 
thereto  shall  come  into  actual  possession  or  enjoyment  thereof. 

Estates  in  expectancy  which  are  contingent  or  defeasible  and  in  which  pro- 
ceedings for  the  determination  of  the  tax  have  not  been  taken  or  where  the 
taxation  thereof  has  been  held  in  abeyance,  shall  be  appraised  at  their  full, 
undiminished  value  when  the  persons  entitled  thereto  shall  come  into  the  bene- 
ficial enjoyment  or  possession  thereof,  without  diminution  for  or  on  account 
of  any  valuation  theretofore  made  of  the  particular  estates  for  purposes  of 
taxation,  upon  which  said  estates  in  expectancy  may  have  been  limited. 

§  4.  Requires  executors  or  administrators  to  deduct  the  tax  or  collect  it 
from  beneficiaries  to  whom  he  may  deliver  property  unless  the  tax  is  paid. 

§  5.  Provides  for  payment  to  county  treasurer  who  gives  a  receipt  which 
must  be  produced  to  entitle  executor  or  administrator  to  final  accounting. 

§  6.  Makes  the  tax  a  lien  and  executors,  administrators,  trustees  and  bene- 
ficiaries personally  liable.  , 

§  7.  If  tax  not  paid  within  one  year  7  per  cent  interest  charged  from  date 
of  death,  which  may  be  reduced  to  6  per  cent  in  case  of  unavoidable  delay. 

§  8.  Gives  power  of  sale  to  pay  tax. 

§  9.  Where  legacy  charged  on  real  estate  heir  must  deduct  tax. 

§  10.  Provides  for  refund  of  taxes  erroneously  paid  if  application  made 
within  three  years. 

§  11.  Provides  that  no  transfer  of  stock  or  obligation  within  state  by 
foreign  executor  or  administrator  shall  be  valid  unless  tax  is  paid.  Such 
property  can  only  be  transferred  on  consent  of  attorney-general,  who  gives  it 
only  when  tax  has  been  paid  or  no  tax  is  due.  Such  application  must  be 
made  on  affidavits  giving  copy  of  will  and  full  information  as  to  nature  and 
value  of  the  property,  and  on  this  information  he  may  determine  the  amount 
of  the  tax  or  that  none  is  due.  If  any  corporation  within  the  state  makes 
transfer  on  its  books  of  stock  owned  by  a  non-resident  decedent  without  the 
consent  of  the  attorney-general  it  is  liable  for  the  tax  plus  10  per  cent  to  be 
recovered  in  a  civil  action.  Any  person  aggrieved  by  the  finding  of  the 
attorney-general  may  appeal  to  the  district  court  of  Hennepin  or  Ramsey 
county  from  the  order  of  which  an  appeal  lies  by  either  party  to  the  supreme 
court. 

§  12.  Forbids  bond  and  safe  deposit  companies  holding  securities  of  dece- 
dent to  deliver  same  without  notice  to  county  treasurer,  who  may  examine 
them  and  require  that  delivery  be  deferred  ten  days.  Failure  to  notify  treas- 
urer makes  the  institution  liable  for  the  tax. 

§  13.  Provides  for  notice  to  county  treasurer  of  all  probate  proceedings. 

§§  13  to  19.  Provide  for  the  appointment  of  appraiser's  valuation  report 
and  rehearing  by  the  probate  court  closely  following  the  New  York  practice. 

§  20.  Provides  for  the  collection  of  delinquent  taxes  by  the  county  attorney. 

§  21.  Provides  for  the  keeping  of  transfer  tax  records  by  the  probate  court. 

§  21  (a).  Provides  for  compromise  of  uncertain  or  contingent  tax  claims 
by  the  attorney-general  on  consent  of  the  state  auditor. 

§  21  (b).  Authorizes  the  attorney-general  to  cite  any  person  believed  to 
have  information  concerning  taxable  decedent's  estate  to  appear  before  him 
and  examine  such  person  on  oath. 

§  21  (c).  Provides  for  proceedings  to  secure  refund  of  taxes  erroneously 
paid. 

§  21  (d).  Provides  for  the  payment  of  taxes  collected  by  county  treasurer 
to  the  state  treasurer. 

§  21  (e  and  f).  Provide  a  seal  for  the  attorney-general  and  authorizes  him 
to  employ  a  transfer  tax  assistant. 

Prior  Statutes:  1^.  1905,  ch.  288;  L.  1909,  Revised  Statutes,  sec.  1038.  Other 
prior  statutes  were  held  unconstitutional. 


INHERITANCE  TAXATION 


MISSISSIPPI 

Imposes  no  inheritance  tax. 

MISSOURI 

Taxes  all  property  of  non-residents  within  the  state. 
TABLE  OF  RATES  AND  EXEMPTIONS  UNDER  ACT  OF  1917,  IN  EFFECT  JUNE  18 


CLASS  OB  RELATIONSHIP 

Amount 
of 

exemp- 
tion 

Above 
exemp- 
tion 
to 
$20,000 

$20,000 
to 
$40,000 

$40,000 
to 

$80,000 

$80,000 
to 
$200,000 

$200,000 
to 

$400,000 

In 
excess 
of 
$400,000 

Husband  or  wife  

$15,000 

Lineal  ancestor,  lineal  de- 
scendant, adopted  child  or 
its  descendant  illegitimate 
child. 

$5,000 

1% 

2% 

3% 

4% 

5% 

6% 

Brother,  sister  or  their  de- 
ecendants,  son-in-law, 
daughter-in-law  . 

$500 

3% 

6% 

9% 

12% 

15% 

18% 

Aunt,  uncle  or  their  descend- 
ants. 

9250 

3% 

6% 

9% 

12% 

15% 

18% 

Brother  or  sister  of  grand- 
parents or  their  descend- 
ants. 

$100 

4% 

8% 

12% 

16% 

20% 

24% 

All  others  except  exempt 
charities,  etc. 

If  less  than 
$100  not 
taxed. 

5% 

10% 

15% 

20% 

25% 

30% 

Municipal,  charitable,  educa- 
tional or  religious  purposes, 
within  the  State. 

All  exempt. 

As  to  estates  of  decedents  dying  prior  to  June  18,  1917,  the  statute  in  force 
(Revised  Statutes  1909)  taxed  transfers  to  collaterals  and  strangers  only,  and. 
the  table  of  rates  and  exemptions  under  that  act  follows-: 


Parents,  husband,  wife,  adopted  child,  and  direct  lineal  descendants  

Exempt  altogether. 

Bequests  for  religious,  charitable  or  religious  purposes  exclusively  

Exempt  altogether. 

All  others  

5%  on  all. 

ACT  OF  1917  IN  EFFECT  JUNE  18,  1917. 

Section  1.  A  tax;  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any 
property,  real,  personal  or  mixed  or  any  interest  therein  or  income  therefrom,  in 
trust  or  otherwise,  to  persons,  institutions,  associations,  or  corporations,  not 
hereinafter  exempted,  in  the  following  cases :  When  the  transfer  is  by  will  or  by 
the  intestate  laws  of  this  state  from  any  person  dying  possessed  of  the  prop- 
erty while  a  resident  of  the  state.  When  the  transfer  is  by  will,  or  intestate 
law  of  property  within  the  state  or  within  the  jurisdiction  of  the  state  and 
decedent  was  a  non-resident  of  the  state  at  the  time  of  hi&  death.  When  the 
transfer  is  made  by  a  resident  or  by  a  non-resident  when  such  non-resident's 
property  is  within  this  state,  or  within  its  jurisdiction,  by  deed,  grant,  bar- 
gain, sale  or  gift  made  in  contemplation  of  the  death  of  grantor,  vendor  or 
donor,  or  intending  to  take  effect  in  possession  or  enjoyment  at  or  after  such 
death.  Every  transfer  by  deed,  grant,  bargain,  sale  or  gift  made  within  two 
years  prior  to  the  death  of  grantor,  vendor,  or  donor,  of  a  material  part  of 
his  estate  or  in  the  mature  of  a  final  disposition  or  distribution  thereof  without 


THE  STATE  STATUTES  725 

an  adequate  valuable  consideration  shall  be  construed  to  have  been  made  in 
contemplation  of  death  within  the  meaning  of  this  section.  Such  tax  shall  be 
imposed  when  any  person,  association,  institution  or  corporation  actually 
comes  into  the  possession  and  enjoyment  of  the  property,  interest  therein,  or 
income  therefrom,  whether  the  transfer  thereof  is  made  before  or  after  the 
passage  of  this  act ;  provided,  that  property  which  is  actually  vested  in  such 
persons  ox  corporations  before  this  act  takes  effect  shall  not  be  subject  to  the 
tax. 

§  2.  Whenever  any  person  or  corporation  shall  exercise  the  power  of 
appointment  derived  from  any  disposition  of  property  made  either  before  or 
after  the  passage  of  this  act,  such  appointment  when  made  shall  be  deemed  a 
transfer  taxable  under  the  provisions  of  this  act  in  the  same  manner  as 
though  the  property  to  which  said  appointment  relates  belonged  absolutely  to 
the  donee  of  such  power  and  had  been  bequeathed  or  devised  by  the  donor  by 
will;  and  whenever  any  person  or  corporation  possessing  such  power  of 
appointment  BO  derived  shall  omit  or  fail  to  exercise  the  same  within  the  time 
provided  therefor,  in  whole  or  in  part,  a  transfer  taxable  under  the  pro- 
visions of  this  act  shall  be  deemed  to  take  place  to  the  extent  of  such  omis- 
sion or  failure,  in  the  same  manner  as  though  the  persons  or  corporations 
thereoy  becoming  entitled  to  the  possession  or  enjoyment  of  the  property  to 
which  such  power  relates  had  succeeded  thereto  by  a  will  of  the  donee  of  the 
power  failing  to  exercise  such  power  taking  effect  at  the  time  of  such  omission 
or  failure.  The  tax  so  imposed  shall  be  determined  by  the  clear  market  value 
of  such  property  at  the  rate  hereinafter  prescribed  and  only  upon  the  excess 
over  the  exemptions  hereinafter  made. 

§§3  and  4.  Prescribe  the  rates  and  exemptions  of  the  foregoing  table. 

§  5.  Provides  for  the  valuation  of  life  estates  and  remainders  and  the 
immediate  taxation  of  the  latter  unless  the  remainderman  elects  to  file  a  bond 
in  three  times  the  amount  of  the  tax  with  an  inventory  of  the  property  and 
shall  renew  the  same  every  five  years. 

§  6.  Makes  tax  due  at  death,  no  interest  for  six  months,  after  that  6  per 
cent  from  date  of  death.  If  not  paid  in  one  year  executor  or  administrator 
must  file  a  bond.  Requires  the  executor  to  deduct  the  tax  from  a  money 
legacy  or  if  in  property  to  collect  it  from  the  beneficiary,  and  forbids  delivery 
without  payment  of  the  tax. 

JEt  imposes  the  same  duty  on  the  heir  when  a  legacy  is  charged  on  the  real 
estate,  makes  it  a  lien,  and  provides  for  its  enforcement  in  the  same  manner 
as  the  legacy. 

§  7.  Makes  executors  and  administrators  personally  liable  and  gives  them 
power  of  sale  in  the  same  manner  as  to  pay  debts. 

§  8.  Provides  for  receipts  which  must  be  produced  to  entitle  the  executor  or 
administrator  to  final  accounting. 

§  9.  Taxes  bequests  to  executors  in  lieu  of  commissions  when  in  excess  of 
reasonable  compensation. 

§  10.  Provides  for  a  proportionate  refund  when  debts  have  been  proved 
against  the  estate  after  distribution. 

H  11.  If  a  foreign  executor,  administrator,  or  trustee  shall  Rssign  or  transfer 
any  stock  or  obligation  in  this  state  standing  in  the  name  of  the  decedent  or  in 
trust  for  a  decedent  liable  for  any  such  tax,  the  tax  shall  be  paid  to  the  state 
treasurer  on  the  transfer  thereof.  No  safe  deposit  company,  trust  company, 
corporation,  bank  or  other  institution,  person  or  persons  having  in  possession 
or  under  control  securities,  deposits,  or  other  assets  belonging  to  or  standing 
in  the  name  of  a  decedent  who  is  a  resident  or  non-resident,  or  belonging 
to  or  standing  in  the  joint  names  of  such  a  decedent  and  one  or 
more  persons,  including  the  shares  or  capital  stock  or  other  interest  in  a  safe 
deposit  company,  trust  company,  corporation,  bank  or  other  institution 
making  a  delivery  or  transfer  herein  provided,  shall  deliver  or  transfer  the 
same  to  the  executor,  administrator,  or  legal  representatives  of  said  decedent 
or  the  survivor  or  survivors  when  in  the  joint  name  of  a  decedent  and  one 
or  more  persons  or  upon  their  order  or  request  unless  notice  of  the  time  and 
place  of  such  intended  delivery  or  transfer  be  served  upon  the  state  treasurer 
and  attorney-general  at  least  ten  days  prior  to  said  delivery  or  transfer;  nor 


726  INHERITANCE  TAXATION 

shall  any  safe  deposit  company,  trust  company,  corporation,  bank  or  other 
institution,  person  or  persons,  deliver  or  transfer  any  securities,  deposits,  or 
other  assets  belonging  to  or  standing  in  the  name  of  decedent  or  belong  to 
or  standing  in  the  joint  names  of  a  decedent  and  one  or  more  persons,  includ- 
ing the  shares  of  capital  stock  of  or  any  other  interest  in  the  safe  deposit 
company,  trust  company,  corporation,  bank  or  other  institution  making  the 
delivery  or  transfer  without  retaining  a  sufficient  portion  or  amount  thereof 
to  pay  any  tax  or  interest  which  may  thereafter  be  assessed  on  account  of  the 
delivery  or  transfer  of  such  securities,  deposits,  or  other  assets,  including  the 
shares  of  capital  stock  or  other  interest  in  the  safe  deposit  company,  trust 
company,  corporation,  bank  or  other  institution  making  the  delivery  or  trans- 
fer under  the  provisions  of  this  article  unless  the  state  treasurer  and  the 
attorney-general  consent  thereto  in  writing.  And  it  shall  be  lawful  for  the 
state  treasurer,  together  with  the  attorney-general,  personally  or  by  represen- 
tative, to  examine  said  securities,  deposits  or  assets  at  the  time  of  such  deliv- 
ery or  transfer.  Failure  to  serve  such  notice  or  failure  to  allow  such  examination 
or  failure  to  retain  a  sufficient  portion  or  amount  to  pay  such  tax  or  interest 
as  herein  provided  shall  render  said  safe  deposit  company,  trust  company, 
corporation,  bank  or  other  institution,  person  or  persons  liable  to  the  payment 
of  the  amount  of  the  tax  and  interest  due  or  thereafter  to  become  due  upon 
said  securities,  deposits,  or  other  assets,  including  the  charges  of  capital  stock 
of,  or  other  interest  in  the  safe  deposit  company,  trust  company,  corporation, 
bank  or  other  institution  making  the  delivery  or  transfer,  and  in  addition 
thereto  a  penalty  of  one  thousand  dollars;  and  the  payment  of  such  tax  and 
interest  thereon  or  the  penalty  above  prescribed  or  both  may  be  enforced  in 
an  action  brought  by  the  state  treasurer  in  any  court  of  competent  juris- 
diction. 

§  12.  Provides  for  refunds  of  taxes  erroneously  paid  when  the  application 
is  made  within  two  years  of  such  payntent. 

§  13.  Gives  the  probate  court  granting  letters  jurisdiction  of  the  tax  pro- 
ceedings and  for  the  appointment  of  an  appraiser  by  the  judge  on  his  own 
motion  or  on  the  application  of  the  estate  or  state  officers. 

§§  14  to  23.  Provide  for  proceedings  before  appraisers,  appeals  and  pro- 
ceedings to  fix  the  tax  where  no  administration  proceedings  are  pending,  and 
for  the  valuation  of  life  estates  and  remainders  by  the  superintendent  of  insur- 
ance on  the  5  per  cent  basis,  using  actuaries'  combined  experience  tables  of 
mortality. 

§  24.  In  determining  the  value  of  any  estate,  property,  interest  therein  or 
income  therefrom  to  the  beneficial  enjoyment  or  possession  whereof  there  are 
persons  or  corporations  presently  entitled,  no  allowance  shall  be  made  on 
account  of  any  contingent  encumbrance  thereon,  nor  on  account  of  any  con- 
tingency upon  the  happening  of  which  the  estate,  property,  interest  or  income 
or  some  part  thereof  or  interest  therein  might  be  abridged,  defeated  or 
diminished;  provided,  however,  that  in  the  event  of  such  encumbrance  taking 
effect  as  an  actual  burden  upon  the  interest  of  the  beneficiary,  or  in  the  event 
of  the  abridgment,  defeat  or  diminution  of  said  estate  or  property  or  interest 
therein  as  aforesaid,  a  return  shall  be  made  to  the  persons  properly  entitled 
thereto  of  a  proportionate  part  of  such  tax  on  account  of  the  encumbrance 
when  taking  effect,  or  so  much  as  will  reduce  the  same  to  the  amount  which 
would  have  been  assessed  on  account  of  the  actual  duration  or  extent  of  the 
estate  or  interest  enjoyed.  Such  return  of  tax  shall  be  made  in  the  manner 
provided  by  section  12  thereof  upon  order  of  the  court  having  jurisdiction. 

§  25.  Where  any  property  shall  after  the  passage  of  this  act,  be  trans- 
ferred subject  to  any  charge,  estate  or  interest,  determinable  by  the  death  of 
any  person,  or  at  any  period  ascertainable  only  by  reference  to  death,  the 
increase  accruing  to  any  person  or  corporation  upon  the  extinction  or  deter- 
mination of  such  charge,  estate  or  interest,  shall  be  deemed  a  transfer  of 
property  taxable  under  the  provisions  of  this  act  in  the  same  manner  as 
though  the  person  or  corporation  beneficially  entitled  thereto  had  then 
acquired  such  increase  from  the  person  from  whom  the  title  to  their  respect- 
ive estate  or  interests  is  derived.  When  the  property  is  transferred  in  trust 
or  otherwise,  and  the  rights,  interest  or  estates  of  the  transferees  are  wholly 


THE  STATE  STATUTES  727 

dependable  upon  contingencies  or  conditions  whereby  they  may  be  wholly  or 
in  part  created,  defeated,  extended  or  abridged,  a  tax  shall  be  imposed  upon 
said  transfer  at-  the  highest  rate  which,  on  the  happening  of  any  of  the  said 
contingencies  or  conditions,  would  be  possible  under  the  provisions  of  this  act, 
and  such  tax  so  imposed  shall  be  due  and  payable  forthwith  by  the  executor, 
administrator,  or  trustee  out  of  the  property  transferred;  provided,  however, 
that  on  the  happening  of  any  contingency  whereby  the  said  property,  or  any 
part  thereof,  is  transferred  to  a  person  or  corporation  exempt  from  taxation 
under  the  provisions  of  this  act,  or  to  any  person  taxable  at  a  rate  less  than, 
the  rate  imposed  and  paid,  such  person  or  corporation  shall  be  entitled  to  a 
return  of  so  much  of  the  tax  imposed  and  paid  as  is  the  difference  between 
the  amount  paid  and  the  amount  which  said  person  or  corporation  should  pay 
under  the  provisions  of  this  act.  Such  return  of  overpayment  shall  be  made 
in  the  manner  provided  by  section  12  of  this  act,  upon  the  order  of  the 
court  having  jurisdiction.  Estates  in  expectancy  which  are  contingent  or 
defeasible  and  in  which  proceedings  for  the  determination  of  the  tax  have 
not  been  taken  or  where  the  taxation  thereof  has  been  held  in  abeyance,  shall 
be  appraised  at  their  full,  undiminished  value  when  the  persons  entitled 
thereto  shall  come  into  the  beneficial  enjoyment  or  possession  thereof,  without 
diminution  for  or  on  account  of  any  valuation  theretofore  made  of  the  par- 
ticular estate  for  purposes  of  taxation,  upon  which  said  estates  in  expectancy 
may  have  been  limited.  Where  an  estate  for  life  or  for  years  can  be  divested 
by  the  act  or  omission  of  the  legatee  or  devisee  it  shall  be  taxed  as  if  there 
were  no  possibility  of  such  divesting. 

§  26.  Actions  may  be  brought  against  the  state  for  the  purpose  of  quieting 
the  title  to  any  property,  against  the  lien  or  claim  of  lien  of  any  tax  or 
taxes  under  this  act,  or  for  the  purpose  of  having  it  determined  that  any  prop- 
erty is  not  subject  to  any  lien  for  taxes  under  this  act.  In  any  such  action, 
the  plaintiffs  may  be  any  administrator,  or  executor  of  the  estate  or  will  of 
any  decedent  whether  the  said  estate  shall  have  been  fully  administered  and 
the  estate  settled  and  closed  or  not,  and  any  heir,  legatee,  devisee  of  any  such, 
decedent,  or  trustee  of  the  estate  or  of  any  part  of  the  estate  of  such  decedent, 
or  distributee  of  the  estate  or  of  any  part  of  the  estate  of  any  such  decedent, 
and  any  assignee,  grantee  or  successor  in  interest  of  any  such  persons,  and 
all  or  any  other  persons  who  might  be  made  parties  defendant  in  any  action 
brought  by  the  state  under  the  provisions  of  this  section,  and  notwithstanding 
that  all  or  any  of  the  persons  enumerated  in  this  section  shall  or  may  have 
assigned,  granted,  conveyed  or  otherwise  parted  with  all  or  any  interest  in  or 
title  to  the  property,  or  any  part  thereof,  involved  in  any  such  claim  or  lien 
before  the  commencement  of  such  act.  All  or  any  of  the  persons  in  this 
action  enumerated  may  be  joined  or  united  as  parties  plaintiff.  The  enumera- 
tion in  this  section  of  the  parties  who  may  be  made  parties  shall  not  be 
deemed  to  be  exclusive,  but  the  joinder  or  non-joinder  of  parties  except  when 
otherwise  herein  provided,  shall  be  governed  by  the  rules  in  equity  in  similar 
cases.  In  all  cases  any  person  who  might  properly  be  a  party  plaintiff  in  any 
such  action  who  refuses  to  join  as  plaintiff  may  be  made  a  defendant.  All 
actions  under  this  section  shall  be  commenced  in  the  circuit  court  of  the  county 
in  which  is  situated  any  part  of  any  real  property  against  which  any  lien  is 
sought  to  be  enforced,  or  to  which  title  is  sought  to  be  quieted  against  any  lien, 
or  claim  of  lien ;  but  if  in  said  action  no  lien  against  real  property  is  sought 
to  be  enforced,  the  action  shall  be  brought  in  the  circuit  court  of  the  county 
which  has  or  which  had  jurisdiction  of  the  administration  of  the  estate  of  the 
decedent  mentioned  herein.  Service  of  summons  in  the  actions  brought  against 
the  state  shall  be  made  on  the  state  treasurer  and  the  prosecuting  attorney  of 
the  county,  and  it  shall  be  the  duty  of  said  prosecuting  attorney  to  defend  for 
the  state.  The  procedure  and  practice  in  all  actions  brought  under  this  sec- 
tion, except  as  otherwise  provided  in  this  act,  shall  be  governed  by  the  pro- 
visions of  the  Code  of  Civil  Procedure  in  relation  to  civil  actions,  so  far  as 
the  same  shall  or  may  be  applicable,  including  all  provisions  relating  to 
motions  for  new  trials  and  appeals.  The  remedies  provided  in  this  section 
shall  be  in  addition  to  and  not  exclusive  of  any  remedies  provided  in  the 
sections  preceding  this  section. 


728 


INHERITANCE  TAXATION 


§§  27,  28  and  29.  Provide  for  reports  by  state  officers  and  impose  a  penalty 
for  neglect  of  duty  in  failing  to  enforce  the  statute. 

§  30.  When  any  property,  benefit  or  income  shall  pass  to  or  for  the  use  of 
any  hospital,  religious,  educational,  Bible,  missionary,  scientific,  benevolent  or 
charitable  purpose  in  this  state,  or  to  any  trustee,  association  or  corporation, 
bishop,  minister  of  any  church,  or  religious  denomination  in  this  state,  to  be 
held  and  used 'and  actually  held  and  used  exclusively  for  religious,  educational 
or  charitable  uses  and  purposes,  the  same  shall  not  be  subject  to  any  tax,  but 
this  provision  shall  not  apply  to  any  corporation  which  has  a  right  to  make 
dividends  or  distribute  profits  or  assets  among  its  members,  except  when  the 
property  is  transferred  to  any  of  the  above  named  parties  in  the  first  instance ; 
the  intent  being  to  exclude  and  exempt  from  the  tax  herein  provided  for,  all 
property  held  by  any  person  or  persons  as  the  trustee  or  other  legal-  repre- 
sentative of  any  religious,  charitable,  scientific,  or  educational  institutions, 
society  or  corporation,  when  by  death  the  title  to  property  passes  by  the  right 
of  succession  to  other  persons  as  trustee  or  legal  representatives  of  such  insti- 
tutions, societies  or  corporations. 

§  31.  When  property  or  any  interest  therein  or  income  therefrom  shall  pass 
to  or  for  the  use  of  any  pepson,  institution,  association  or  corporation  by  the 
death  of  another  by  deed,  instrument  or  memoranda  or  by  any  transfer  or 
passage  whatsoever  and  such  transfer  shall  be  deemed  a  transfer  within  the 
meaning  of  this  act  and  taxable  at  the  same  rates  and  be  appraised  in  the 
same  manner  and  subjected  to  the  same  duties  and  liabilities  as  any  other 
form  of  transfer  provided  in  this  act. 

§  32.  Makes  the  usual  definitions  as  to  estate  and  ^property. 

$  33.  Repeals  the  former  statutes  with  the  usual  saving  clause  as  to  the 
rights  of  the  state  to  taxes  already  accrued. 


Taxes  property  of  non-residents  within  the  state  except  real  estate  of  lineal 
descendants,  and  near  relatives. 


CLASS  OK  RELATIONSHIP 

Exemption 

Rate  of  tax 

Father,  mother,  husband,  wife,  lawful  issue,  sister, 
brother,  son-in-law,  daughter-in-law,  adopted  or 
mutually  acknowledged  child,  lineal  descendants, 
born  in  wedlock. 

Estate  valued  at 
less  than  $7,- 
500,  no  tax. 

1%  on  entire  value  of 
personal  property, 
if  over  $7,500  in 
value. 

All  others  

5%  on  all,  if  estate 

less  than  $500, 
not  taxed. 

over  $500. 

REVISED  CODES  OF  MONTANA  OF  1907,  AS  AMENDED  BY  CHAPTER 
40,  LAWS  OF   1917. 

§  7724.  After  the  passage  of  this  act,  all  property  which  shall  pass  by  will 
or  by  the  intestate  laws  of  this  state,  from  any  person  who  may  die,  seized  or 
possessed  of  the  same,  while  a  resident  of  this  state,  or  if  such  decedent  was 
not  a  resident  of  this  state,  at  the  time  of  his  death,  which  property  or  any 
part  thereof,  shall  be  within  this  state,  or  any  interest  therein  or  income 
therefrom,  which  shall  be  transferred  by  deed,  grant,  sale  or  gift  made  in 
contemplation  of  the  death  of  the  grantor  or  bargainer,  or  intended  to  take 
effect  in  possession  or  enjoyment  after  such  death  to  any  person  or  persons, 
or  to  any  body  politic  corporate,  in  trust  or  otherwise,  or  any  property,  which 
shall  be.  in  this  state  or  the  proceeds  of  all  property  outside  of  this  state, 
which  may  come  into  this  state,  and  which  may  be  or  should  be  distributed  in 
this  state  to  any  such  heirs,  devisees  or  legatees,  by  reason  whereof  any  person 


THE  STATE  STATUTES  729 

or  corporation  shall  become  beneficially  entitled  in  possession  or  expectancy, 
to  any  such  property,  or  to  the  income  thereof. 

The  section  then  fixes  the  rates  and  exemptions  shown  above,  makes  execu- 
tors and  administrators  personally  liable  until  the  tax  is  paid,  and  concludes 
as  follows: 

"Provided,  further,  that  said  tax  shall  be  levied  and  collected  upon  the 
increase  of  all  property  arising  between  the  date  of  death  and  the  date  of  the 
decree  of  distribution,  and  upon  all  estates  which  have  been  probated  before, 
and  shall  be  distributed  after  the  passage  and  taking  effect  of  this  act." 

NOTE. — (a)  A  serious  typographical  error  which  has  misled  text  writers 
is  corrected  in  a  re-publication  of  above  section  in  Montana  Revised  Codes 
of  1915.  Vol.  3  p.  781. 

(b)  The  unique  provision  taxing  increase  during  administration  is  con- 
strued to  include  increase  in  value  as  well  as  in  kind. 

Matter  of  Tuohy,  35  Mojat.  431. 

§  7725.  Provides  that  if  remaindermen  elect  to  defer  payment  until  they  get 
the  property  they  may  within  one  year  file  a  bond  in  twice  the  .amount  of  the 
tax  with  an  inventory  of  the  property  to  pay  it  with  interest  at  10  per  cent, 
and  must  renew  the  bond  every  three  years. 

§  7726.  Taxes  excess  over  reasonable  fees  of  bequest  to  executors  in  lieu  »f 
commissions. 

§  7727.  Makes  taxes  due  at  death.  If  paid  within  six  months  allows  dis- 
count of  3  per  cent.  Charges  interest  at  10  per  cent  after  ten  months,  and 
requires  executors  or  administrators  to  file  a  bond  for  payment. 

§  7728.  In  case  of  unavoidable  delay  no  interest  for  eighteen  months  and 
then  at  7  per  cent. 

§  7729.  Requires  the  executor  or  administrator  to  deduct  the  tax  from 
money  legacy  or  collect  it  from  the  legatee;  must  not  deliver  property  unless 
the  tax  is  paid. 

§  7730.  Gives  power  of  sale  to  pay  tax  as  in  case  of  debts. 

§  7731.  Provides  for  receipts  which  must  be  produced  on  accounting  to  pro- 
cure discharge. 

§  7732.  Makes  the  bond  of  executors  or  administrators  liable  for  the  tax. 

§  7733.  Executor  or  administrator  may  be  removed  and  his  bond  held  in 
case  of  failure  to  pay  tax. 

§  7734.  Makes  administrators  de  bonix  non.  liable  in  the  same  way  as  other 
admini  strators. 

§  7735.  Provides  for  proportionate  refund  where  debts  have  been  proved 
after  distribution. 

§  7737.  Foreign  executors.  Tax  on  stocks  or  loans.  Whenever  any  foreign 
executor  or  administrator  shall  assign  or  transfer  any  stocks  or  loans  in  this 
state,  standing  in  the  name  of  the  decedent,  or  held  in-  trust  for  a  decedent, 
which  shall  be  liable  to  the  said  tax,  such  tax  shall  be  paid  to  the  treasurer 
of  the  proper  county  on  the  transfer  thereof;  otherwise,  the  corporation  per- 
mitting such  transfer  shall  become  liable  to  pay  such  tax;  provided  that -such 
corporation  had  actual  or  constructive  knowledge  before  such  transfer  that 
said  stocks  or  loans  are  liable  to  said  tax. 

The  other  sections  provide  for  the  appraisal  of  the  estate,  appeal,  rehearing 
and  delinquent  collections,  substantially  following  the  New  York  practice. 

Life  estates  and  remainders  are  computed  on  mortality  tables  on  a  basis  of 
7  per  cent. 

THE  1917  AMENDMENT. 

Chapter  40,  L.  1917,  reads  as  follows: 

"  §  7731.  Every  sum  of  money  retained  by  an  executor,  administrator,  or 
trustee,  or  paid  into  his  hands  for  any  tax  on  property  shall  be  placed  in  a 
separate  account  and  within  ten  days  thereafter,  he  shall  obtain  an  order  of 
the  court  before  whom  the  probate  proceedings  are  pending,  setting  forth  the 
county  whereof  decedent  was  a  resident  at  the  time  of  his  death  and  showing 
the  county  or  counties  wherein  the  real  property  of  decedent  is  situate, 
together  with  the  amount  thereof  and  the  value  of  the  same,  as  given  by  the 
appraisers  of  decedent's  estate,  and  ordering  such  executor,  administrator,  or 


730 


INHERITANCE  TAXATION 


trustee,  to  pay  unto  the  several  county  treasurers  of  such  county  or  counties 
such  sum  or  sums  so  set  aside  in  the  following  proportion : 

"  First.  To  the  county  treasurer  of  the  county  whereof  decedent  was  a  resi- 
dent at  the  time  of  his  death  the  whole  amount  of  the  tax  due  on  the  personal 
property  of  said  decedent. 

"  Second.  To  each  county  treasurer  of  the  counties  wherein  decedent  owned 
real  property,  the  tax  due  on  the  amount  of  property  situate  in  such  county 
according  to  the  valuation  set  upon  the  same  by  the  appraisers  of  decedent's 
estate;  immediately  after  obtaining  the  aforesaid  order  such  executor,  admin- 
istrator, or  trustee  shall  pay  to  the  county  treasurer  or  treasurers  named 
therein  the  sum  or  sums  specified  in  such  order,  and  the  payment  of  said  tax 
to  every  county  treasurer  shall  be  accompanied  by  a  certified  copy  of  such 
order,  and  the  said  county  treasurer  or  treasurers  shall  give,  and  every 
executor,  administrator,  or  trustee  shall  take  duplicate  receipts  for  such  pay- 
ment, one  of  which  said  receipts  said  executor,  administrator  or  trustee 
shall  immediately  send  to  the  treasurer  of  the  state  whose  duty  it  shall  be  to 
charge  the  county  treasurer  so  receiving  the  tax  with  the  amount  thereof  due 
the  state,  and  state  treasurer  shall  seal  said  receipt  with  the  seal  of  his  office, 
if  he  have  one,  and  countersign  the  same,  and  return  it  to  the  executor, 
administrator  or  trustee,  whereupon  it  shall  be  a  proper  voucher  in  the  settle- 
ment of  his  accounts;  and  an  executor,  administrator  or  trustee  shall  not  be 
entitled  to  credits  in  his  accounts,  nor  be  discharged  from  liability  for  such 
tax,  nor  shall  said  estate  be  distributed  unless  he  shall  produce  a  receipt  so 
sealed  and  countersigned  by  the  state  treasurer,  or  a  copy  thereof  certified 
by  him." 

§  2.  This  act  shall  apply  to  all  estates  remaining  undistributed  at  the  time 
this  law  shall  take  effect  and  the  tax  shall  be  determined  and  collected  as  in 
other  cases. 

§  3.  All  acts  and  parts  of  acts  inconsistent  with  the  provisions  of  this  act 
are  hereby  repealed,  as  far  as  they  effect  the  provisions  hereof. 

§  4.  This  act  shall  take  effect  and  be  in  force  from  and  after  its  passage 
and  approval  by  the  Governor. 

NEBRASKA 

Taxes  property  of  non-residents  within  the  state. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OR  RELATIONSHIP 

Amount 
exempt 

Rates 

Father,  mother,  husband,  wife, 
child,  brother,  sister,  daughter- 
in-law,  son-in-law,  adopted  _  or 
mutually  acknowledged  child, 
lineal  descendant. 

$10,000 

1%  on  all  above  exemption. 

Aunt,  uncle,  niece,  nephew,  or 
their  lineal  descendants. 

$2,000 

2%  on  all  in  excess  of  exemption. 

AU  others  

Less 
than  $500, 
no  tax 

On  all 
up  to 
$5,000 

$5,000 
to 
$10,000 

$10,000     $20 
to              t 
$20,000     $50 

In 

000      excess 
o              of 
000     $50,000 

2% 

3% 

4% 

5%              6% 

REVISED  STATUTES  OF  1913,  AS  AMENDED  BY  CHAPTER  113,  LAWS 

OF  1915. 

§  6622.  All  property,  real,  personal  and  mixed  which  shall  pass  by  will  or 
by  the  intestate  laws  of  this  state  from  any  person  who  may  die  seized  or 
possessed  of  the  same  while  a  resident  of  this  state,  or,  if  decedent  was  not  a 


THE  STATE  STATUTES  731 

resident  of  this  state  at  the  time  of  his  death,  which  property  or  any  part 
thereof  shall  be  within  this  state,  or  any  interest  therein  or  income  therefrom, 
which  shall  be  transferred  by  deed,  grant,  sale  or  gift  made  in  contemplation  of 
the  death  of  the  grantor,  or  bargainer,  or  intended  to  take  effect,  in  possession 
or  enjoyment  after  such  death,  to  any  person  or  persons  or  to  any  body  politic 
or  corporate  in  trust  or  otherwise,  or  by  reason  thereof  any  person  or  body 
corporate  shall  become  beneficially  entitled  in  possession  or  expectation  to  any 
property  or  income  thereof,  shall  be  and  is  subject  to  a  tax,  at  the  rate  herein- 
after specified  to  be  paid  to  the  treasurer  of  the  proper  county  for  the  use  of 
the  state  and  all  heirs,  legatees  and  devisees,  administrators,  executors  and 
trustees  shall  be  liable  for  any  and  all  such  taxes  until  the  same  shall  have 
been  paid  as  hereinafter  directed. 

The  rest  of  the  section  prescribes  the  rates  and  exemptions  as  shown  in  the 
foregoing  table. 

§  6624.  All  taxes  imposed  by  this  act,  unless  otherwise  herein  provided  for, 
shall  be  due  and  payable  at  the  death  of  the  decedent,  and  interest  at  the 
rate  of  7  per  cent  per  annum  shall  be  charged  and  collected  therefrom  for 
such  time  as  such  taxes  are  not  paid;  provided,  that  if  said  tax  is  paid  within 
one  year  from  the  accruing  thereof,  interest  shall  not  be  charged  or  collected 
thereon,  and  in  all  cases  where  the  executors  and  administrators  or  trustees 
do  not  pay  such  tax  within  one  year  from  the  death  of  the  decedent  they 
shall  be  required  to  give  a  bond  in  the  form  and  to  the  effect  prescribed  in 
section  2  of  this  act,  for  the  payment  of  said  tax  together  with  interest. 

§  6625.  Requires  the  executor  or  administrator  to  deduct  the  tax  from 
money  or  collect  it  from  beneficiary  in  case  of  property,  which  must  not  be 
delivered  unless  the  tax  is  paid.  Requires  the  heir  to  deduct  the  tax  before 
paying  a  legacy  charged  on  real  estate.  When  property  is  given  for  a  limited 
period  the  court  apportions  the  tax. 

§  6626.  Gives  power  of  sale  for  payment  of  tax  in  the  same  way  as  in  case 
of  debts. 

§  6627.  Provides  for  receipts  which  must  be  produced  on  final  accounting. 

§  6628.  Whenever  any  of  the  real  estate  of  which  any  decedent  may  die  seized 
shall  pass  to  any  body  corporate  or  to  any  person  or  persons  or  in  trust  for 
them  or  some  of  them,  it  shall  be  the  duty  of  the  executor,  administrator  or 
trustee  of  such  decedent  to  give  information  thereof,  in  writing,  to  the  treas- 
urer of  the  county  where  said  real  estate  is  situated,  within  six  months  after 
they  undertake  the  execution  of  their  expected  duties,  or  if  the  facts  be  not 
known  within  that  period,  then  within  one  month  after  the  same  shall  have 
come  to  their  knowledge. 

§  6629.  Whenever  debts  shall  be  proved  against  the  estate  of  the  deceased 
after  distribution  of  legacies  from  which  the  inheritance  tax  had  been  deducted 
in  compliance  with  this  act,  and  the  legatee  is  required  to  refund  any  portion 
of  the  legacy,  a  proportion  of  the  said  tax  shall  be  paid  to  him  by  the  executor 
or  administrator;  if  the  said  tax  has  not  been  paid  into  the  county  treasury 
or  by  the  county  treasurer  if  it  has  been  so  paid. 

§  663<X  Whenever  any  foreign  executors  or  administrators  shall  assign  or 
transfer  any  stocks  or  loans  in  this  state  -standing  in  the  name  of  the  decedent, 
or  in  trust  for  a  decedent  which  shall  be  liable  to  the  said  tax,  such  tax  shall 
be  paid  to  the  treasury  or  treasurer  of  the  proper  county  on  the  transfer 
thereof;  otherwise  the  corporation  making  such  transfer  shall  become  liable 
to  pay  such  taxes,  provided  that  such  corporation  has  knowledge  before  such 
transfer  that  said  stocks  or  loans  are  liable  for  such  taxes. 

§  6631.  When  any  amount  of  the  said  tax  shall  have  been  paid  erroneously 
to  the  county  treasurer  it  shall  be  lawful  for  him,  on  satisfactory  proof  ren- 
dered to  him  of  said  erroneous  payment,  to  refund  and  pay  to  the  executor, 
administrator  or  trustee,  person  or  persons  who  have  paid  any  such  tax  in  error, 
the  amount  of  such  tax  so  paid  provided  that  all  applications  for  the  repay- 
ment of  the  said  tax  shall  be  made  within  two  years  of  the  date  of  said 
payment. 

The  rest  of  the  statute,  sections  6632  to  6641,  makes  the  usual  provisions 
for  appointment  of  appraisers,  valuation,  appeal  and  reports  of  state  officers. 


732 


IKHKRTTAKCE  TAXATION 


Under  the  1915  amendment  to  section  6632  the  county  court  is  empowered 
to  make  an  order  on  proper  proof  that  the  estate  is  not  subject  to  any  tax, 
thus  avoiding  unnecessary  appraisal  of  small  estates,  following  the  New  York 
practice. 

Prior  Statutes:  L.  1901,  ch.  54;  L,.  1905,  ch.  117;  L.  1907,  chs.  103  and  104, 
L.  1911,  ch.  107. 

NEVADA 

Taxes  all  property  of  non-residents  within  the  state. 

TABLE  OF   GRADED  RATES  AND  EXEMPTIONS 


CLASS  OB  RELATIONSHIP 

Amount 
of 
exemption 

Graded  rates 

Above 
exemp- 
tion 
up  to 
$25,000 

$25,000 
•to 
«50,OCO 

$50,000 

to 

$100,000 

$100,000 
to 
$500,000 

In 

excess 
of 
$500,000 

Husband,  wife,  lineal  issue,  lineal 
ancestor,  adopted  or  mutually 
acknowledged  child. 

$20,000          to 
widow        or 
minor  child; 
others,  $10,- 
000. 

1% 

2% 

3% 

4% 

5% 

Brother  or  sister  of  decedent  and 
their  descendants,  son-in-law, 
daughter-in-law. 

$10,000 

2% 

4% 

6% 

8% 

10% 

Aunt  or  uncle  of  their  descend- 
ants. 

$5,000 

3% 

6% 

9% 

12% 

15% 

Brother  or  sister  of  grandparents 
and  their  descendants. 

None 

4% 

8% 

12% 

16% 

20% 

All  others  

None 

5% 

10% 

15% 

20% 

25% 

LAWS  OF  1913,  CHAPTER  266.    BECAME  A  LAW  MARCH  26,     1913. 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  and  all 
property  within  the  jurisdiction  of  this  state,  and  any  interest  therein  or 
income  therefrom,  whether  belonging  to  the  inhabitants  of  this  state  or  not, 
and  whether  tangible  or  intangible,  not  hereinafter  exempted,  which  shall  pass 
in  trust  or  otherwise  by  will  or  by  the  statutes  of  inheritance  of  this  or  any 
other  state  or  by  deed,  grant,  sale  or  gift  made  without  valuable  and  adequate 
consideration  in  contemplation  of  the  death  of  the  grantor,  vendor,  assignor  or 
donor  or  intended  to  take  effect  in  possession  or  enjoyment  at  or  after  Buch 
death,  as  specified  in  this  act.  For  the  purposes  of  this  act,  the  ownership  of 
shares  of  stock  in  a  corporation  owning  property  in  this  state  shall  be  con- 
sidered as  the  ownership  of  such  interest  in  the  property  so  owned  by  such 
corporation,  as  the  number  of  shares  so  owned  shall  bear  to  the  entire  issued 
and  outstanding  capital  stock  of  such  corporation;  and  notes  and  other  evi- 
dences of  indebtedness  secured  by  mortgage  on  real  estate  situated  in  this 
state  are  and  shall  be,  upon  the  owner's  death,  subject  to  the  inheritance  tax 
hereinafter  provided. 

§§  2,  3  and  4.  Impose  the  rates  and  exemptions  shown  in  the  foregoing 
table, 

§  5.  Provides  that  remaindermen  may  elect  not  to  pay  the  tax  until  they 
get  the  property  by  filing  an  inventory  and  bond  within  one  year  in  twice  the 
amount  of  the  tax  and  renewing  the  bond  every  five  years. 

§  6.  Taxes  bequests  to  executors  in  lieu  of  commissions  when  in  excess  of 
reasonable  compensation. 


THE  STATE  STATUTES  733 

§  7.  Makes  all  taxes  due  at  death.  If  paid  within  six  months  allows  dis- 
count of  5  per  cent.  No  interest  until  after  eighteen  months,  then  10  per  cent 
from  date  of  death,  and  executor  or  administrator  must  file  a  bond. 

§  8.  In  case  of  unavoidable  delay  interest  after  eighteen  months  reduced  to 
7  per  cent. 

§  9.  Kequires  the  executor  or  administrator  to  collect  the  tax  from  bene- 
ficiary or  deduct  it  from  money  lagacy  or  share. 

§  10.  Gives- power  of  sale  to  pay  the  tax  and  no  final  accounting  allowed 
unless  tax  receipt  is  produced. 

|11.  Kequires  the  executor  or  administrator  to  pay  the  tax,  provides  for 
receipts  and  duplicate  copies  thereof. 

§  12.  Provides  for  proportionate  refund  of  tax  if  debts  are  proved  against 
estate  after  distribution. 

§  13.  Gives  jurisdiction  of  the  tax  proceedings  to  the  district  court  in  which 
the  probate  is  pending. 

§§  14  to  23.  Provide  for  the  appointment  of  appraisers  and  the  usual  pro- 
ceedings for  the  valuation  of  the  estate  and  collection  of  the  tax  closely  follow- 
ing the  New  York  practice. 

§  24.  Whenever  any  property  belonging  to  a  foreign  estate  which  estate,  in 
whole  or  in  part,  is  liable  to  pay  an  inheritance  tax  in  this  state,  the  said 
tax  shall  be  assessed  upon  the  market  value  of  said  property  remaining  after 
the  payment  of  such  debts  and  expenses  as  are  chargeable  to  the  property 
under  the  laws  of  this  state ;  in  the  event  that  the  executor,  administrator  or 
trustee  of  such  foreign  estate,  files  with  the  clerk  of  the  court  having  ancillary 
jurisdiction,  and  with,  the  state  treasurer,  duly  certified  statement*  exhibiting 
the  true  market  value  of  the  entire  estate  of  the  decedent  owner,  and  the 
indebtedness  for  which  the  said  estate  has  been  adjudged  liable,  which  state- 
ments shall  be  duly  attested  by  the  judge  of  the  court  having  original  juris- 
diction, the  beneficiaries  of  said  estate  shall  then  be  entitled  to  have  deducted 
such  proportion  of  the  said  indebtedness  of  the  decedent  from  the  value  of  the 
property  as  the  value  of  the  property  within  this  state  bears  to  the  value  of 
the  entire  estate. 

§  25.  If  a  foreign  administrator,  executor  or  trustee  shall  assign  or  transfer 
any  corporate  stock  or  obligations  in  this  state  standing  in  the  name  of  the 
decedent,  or  in  trust  for  a  deced«nt  and  liable  to  the  tax  herein  provided,  the 
tax  must  be  paid  to  the  county  treasurer  of  the  county  in  which  such  transfer 
i»  made  before  the  transfer  thereof;  otherwise  the  corporation  permitting  its 
stock  to  be  so  transferred  shall  be  liable  to  pay  such  tax,  and  it  is  the  duty 
of  the  state  controller  and  the  district  attorney  of  the  proper  county  to 
enforce  the  payment  thereof. 

§§  26—29.  Provide  for  the  collection  of  delinquent  taxes. 

§  30.  The  words  "  estate "  and  "  property "  as  used  in  this  act  shall  be 
taken  to  mean  the  real  and  personal  property  or  interest  therein  of  the 
testator,  intestate,  grantor,  bargainer,  vendor,  or  donor  passing  or  trans- 
ferred to  individual  legatees,  devisees*  heirs,  next  of  kin,  grantees,  donees, 
vendees,  or  successors,  and  shall  include  all  personal  property  within  or 
without  the  state.  The  word  "  transfer  "  as  used  in  this  act  shall  be  taken 
to  include  the  passing  of  property  or  any  interest  therein,  in  possession  or 
enjoyment,  present  or  future,  by  inheritance,  descent,  devise,  succession, 
bequest,  grant,  deed,  bargain,  sale,  gift,  or  appointment  in  the  manner  herein 
described.  The  word  "  decedent  "  as  used  in  this  act  shall  include  the  testator, 
intestate,  grantor,  bargainer,  vendor,,  or  donor. 

The  words  "  contemplation  of  death  "  as  used  in  this  act  shall  be  taken  to 
include  that  expectancy  of  death  which  actuates  the  mind  of  a  person  on  the 
execution  of  his  will,  and  in  nowise  shall  said  words  be  limited  and  restricted 
to  that  expectancy  of  death  which  actuate*  the  mind  of  a  person  in  making 
a  gift  causa  mortis,  and  it  is  hereby  declared  to  be  the  intent  and  purpose  of 
this  act  to  tax  any  and  all  transfers  which  are  made  in  lieu  of  or  to  avoid 
the  passing  of  the  property  transferred  by  testate  or  intestate  laws. 

§  31.  This  act  shall  take  effect  thirty  days  from  and  after  the  date  of  its 
approval. 

Prior  Statutes:  None  prior  to  above  act. 


734 


INHERITANCE  TAXATION 


NEW  HAMPSHIRE 

Taxes  only  collaterals  and  strangers  and  when  they  are  non-residents  only 
real  property  within  the  state,  since  April  7,  1915. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OR  RELATIONSHIP 

Amount  exempt 

Rates 

Father,  mother,  husband,  wife,  brother,  sister, 

Wholly  exempt  

lineal  descendant,  adopted  child,  the  lineal 
descendant  of  any  adopted  child,  the  wife  or 
widow   of  a  son,  or  the  husband  of  a  daugh- 
ter, of  a  decedent,  or  to  or  for  the  use  of 
educational,    religious,    cemetery,   or  other 
institution,  societies,  or  associations  of  pub- 
lic charity  in  this  state,  or  for  or  upon  trust 
for  any  charitable  purpose  in  the  state,  or 
for  the  care  of  cemetery  lots,  or  to  a  city  or 
town  in  this  state  for  public  purposes. 

On  real  estate  within  the  State 

5% 

All  others  when  residents  

5%  on  all. 

LAWS  OF  1905,  CHAPTER  40,  AS  AMENDED  BY  LAWS  OF  1907,  CHAPTER 
68;  LAWS  OF  1911,  CHAPTER  42;  LAWS  OF  1913,  CHAPTER  202; 
LAWS  OF  1915,  CHAPTER  106  AND  CHAPTER  116. 

Section  1.  All  property  within  the  jurisdiction  of  the  state,  real  or  personal, 
and  any  interest  therein,  belonging  to  inhabitants  of  the  state,  and  all  real 
estate  within  the  state,  or  any  interest  therein,  belonging  to  persons  who  are 
not  inhabitants  of  the  state,  which  shall  pass  by  will,  or  by  the  laws  regulat- 
ing intestate?  succession,  or  by  deed,  grant,  bargain,  sale,  or  gift,  made  in 
contemplation  of  death,  or  made  or  intended  to  take  effect  in  possession  or 
enjoyment  at  or  after  the  death  of  the  grantor  or  donor,  to  any  person, 
absolutely  or  in  trust. 

The  section  then  prescribes  the  rates  and  exemptions  of  the  foregoing  table 
and  concludes:  administrators,  executors,  and  trustees,  and  any  such  grantees 
under  a  conveyance  made  during  the  grantor's  life,  shall  be  liable  for  such 
taxes,  with  interest,  until  the  same  have  been  paid.  An  institution  or  society 
shall  be  deemed  to  be  in  this  state,  within  the  meaning  of  this  act,  when  its 
sole  object  and  purpose  is  to  carry  on  charitable,  religious,  or  educational 
work  within  the  state,  but  not  otherwise. 

§  2.  Provides  for  the  computation  of  life  estates  on  mortality  tables  on  the 
4-per  cent,  basis.  Contingent  remainders  are  presently  taxed  against  the 
legacy  but  if  they  ultimately  pass  to  an  exempt  class  application  for  a  refund 
with  interest  at  3  per  cent,  may  be  made  within  one  year. 

§  3.  Taxes  bequests  to  executors  in  lieu  of  commissions  in  excess  of  reason- 
able compensation. 

§  4.  Makes  taxes  due  two  years  -from  giving  bonds  by  executors  or  admin- 
istrators after  that  10  per  cent,  and  tax  is  made  a  lien  on  the  property  until 
paid. 

§  5.  Requires  executors  or  administrators  to  deduct  the  tax  or  collect  it 
from  beneficiaries  and  gives  them  power  of  sale. 

The  section  provides  further: 

When  a  conveyance  made  by  a  decedent  in  his  lifetime  is  subject  to  said 
tax,  and  the  property  thus  conveyed,  being  personal  property  is  without  the 
state,  or  is  removed  from  the  state  before  the  tax  is  paid,  such  tax  shall 
become  a  lien  upon  all  the  property  of  the  decedent  and  shall  be  chargeable 
as  an  expense  of  administration;  and  the  executor  or  administrator  shall 
collect  taxes  due  on  account  of  such  conveyances  and  may  be  authorized  to 
sell  any  property  subject  to  the  lien  of  such  tax,  for  the  payment  thereof,  as 
in  other  cases. 


THE  STATE  STATUTES  735 

§  6.  Requires  the  heir  to  deduct  the  tax  before  paying  legacy  charged  on 
real  estate,  makes  the  tax  a  lien  until  paid  and  payment  may  be  enforced  in 
the  same  way  as  payment  of  the  legacy. 

§§  7,  8.  Give  power  of  sale  of  property  and  real  estate  to  pay  the  tax  if  not 
paid  by  beneficiaries  when  due. 

§  9.  Requires  the  executor  or  administrator  within  three  months  of  appoint- 
ment to  file  an  inventory  and  appraisal  with  a  penalty  of  $1,000  for  neglect 
or  refusal  and  removal  from  office. 

§  10.  Requires  the  register  of  probate  to  send  copies  of  the  inventory  and 
of  the  will  to  the  state  treasurer. 

§  11.  Requires  the  executor  or  administrator  to  notify  the  state  treasurer 
of  any  real  estate  passing  so  as  to  be  liable  to  the  tax. 

§  12.  Requires  the  state  treasurer  to  determine  the  amount  of  the  tax  and 
provides  further:  The  amount  due  upon  the  claim  of  any  creditor  against 
the  estate  of  a  deceased  person  arising  under  a  contract  made  after  the 
passage  of  this  act,  if  payable  by  the  terms  of  such  contract  at  or  after  the 
death  of  the  deceased  shall  be  subject  to  the  same  tax  imposed  by  this  chapter 
upon  a  legacy  of  like  amount.  The  value  of  legacies  or  distributive  shares  in 
the  estates  of  deceased  persons  for  the  purpose  of  the  legacy  or  succession  tax 
shall  not  be  diminished  by  reason  of  any  claim  against  the  estate  based  upon 
such  a  contract  in  favor  of  the  persons  entitled  to  such  legacies  or  distribu- 
tive shares,  except  in  so  far  as  it  may  be  shown  affirmatively  by  competent 
evidence  that  such  claim  was  legally  due  and  payable  in  the  lifetime  of  the 
decedent.  Payment  of  the  amount  so  certified  shall  be  a  discharge  of  the 
tax.  An  executor,  administrator,  trustee  or  grantee,  who  is  aggrieved  by 
any  such  determination  of  the  state  treasurer  and  who  pays  the  tax  assessed 
without  appeal,  may,  within  one  year  after  the  payment  of  such  tax  to  the 
treasurer,  but  not  afterwards,  apply  to  the  probate  court  having  jurisdiction 
of  the  estate  of  the  decedent  for  the  abatement  of  said  tax  or  any  part 
thereof,  and  if  the  court  adjudges  -that  said  tax  or  any  part  thereof  was  wrong- 
fully exacted  it  shall  order  an  abatement  of  such  portion  of  said  tax  as  was 
assesstd  without  authority  of  -law,  which  said  order  or  decree  shall  be  sub- 
ject to  appeal  as  in  other  cases.  Upon  a  final  decision  ordering  an  abatement 
of  any  portion  of  said  tax,  the  state  treasurer  shall  repay  the  amount 
adjudged  to  have  been  illegally  exacted  without  any  further  act  or  resolve 
making  appropriation-  therefor.  Whenever  a  specific  bequest  of  household 
furniture,  wearing  apparel,  personal  ornaments,  or  similar  articles  of  small 
value  is  subject  to  a  tax  under  the  provisions  of  this  act,  the  state  treasurer 
in  his  discretion  may  abate  such  tax  if  in  his  opinion  the  tax  is  not  of  suffi- 
cient amount  to  justify  the  labor  and  expense  of  its  collection. 

§  13.  Provides  for  the  appointment  of  appraisers  by  state  treasurer  if  the 
estate  fails  to  make  one  or  he  is  dissatisfied  with  that  made,  for  reappraisal 
on  application  to  the  probate  court  and  for  appeal. 

§  14.  Gives  right  of  appeal  to  the  probate  court  to  the  executor  or  admin- 
istrator if  dissatisfied  with  finding  of  the  state  treasurer. 

§  15.  The  state  treasurer  may  apply  for  administration  of  an  estate  liable 
to  tax  if  no  proceedings  for  probate  or  administration  are  begun  within  four 
months  of  death. 

§  16.  Executor  or  administrator  must  show  that  the  tax  has  been  paid  or 
that  none  is  due  before  being  entitled  to  final  accounting. 

§  17.  Authorizes  the  state  treasurer  to  require  the  production  of  books  and 
papers. 

§  18.  When  real  estate  within  the  state,  or  any  interest  therein,  belonging 
to  a  person  who  is  not  an  inhabitant  of  the  state,  shall  pass  by  will  or  other- 
wise so  that  it  may  be  subject  to  tax  under  the  provisions  of  section  1,  and 
an  executor  or  administrator  of  the  estate  of  said  decedent  is  appointed  by  a 
probate  court  of  this  state  upon  ancillary  proceedings,  or  otherwise,  such 
executor  or  administrator  shall,  for  the  purposes  of  this  act,  have  the  same 
powers  and  be  subject  to  the  same  duties  and  liabilities  with  reference  to 
such  real  estate  as  though  the  decedent  had  been  a  resident  of  this  state;  but 
the  provisions  of  this  act,  in  so  far  as  they  refer  to  personal  property,  shall 
not  apply  to  such  executor  or  administrator. 


736 


INHERITANCE  TAXATION 


§  19.  In  the  absence  of  administration  in  this  state  upon  the  estate  of-  a 
non-resident,  the  state  treasurer  may,  at  the  request  of  an  executor  or  admin- 
istrator duly  appointed  and  qualified  in  the  state  of  the  decedent's  domicile, 
or  of  a  grantee  under  a  conveyance  made  during  the  grantor's  lifetime,  and 
upon  satisfactory  evidence  furnished  him  by  such  executor,  administrator,  or 
grantee,  or  otherwise,  determine  whether  or  not  any  real  estate  of  said 
decedent  within  this  state  is  subject  to  tax  under  the  provisions  of  this  act, 
and  if  so,  may  determine  the  amount  of  such  tax  and  adjust  the  same  with 
such  executor,  administrator,  or  grantee,  and  for  that  purpose  may  appoint 
an  appraiser  to  -appraise  said  property  as  provided  in  section  13,  and  the 
expense  of  such  appraisal  shall  be  a  charge  upon  said  real  estate  in  addition 
to  the  tax.  The  treasurer's  certificate  as  to  the  amount  of  such  tax  and  his 
receipt  for  the  amount  therein  certified  may  be  filed  in  the  probate  office  in 
the  county  where  the  real  estate  is  located,  and  when  so  filed  shall  be  con- 
clusive evidence  of  the  payment  of  the  tax,  to  the  extent  of  such  certification, 
as  provided  in  section  16.  Whenever  in  such  a  case  the  tax  is  not  adjusted 
within  four  months  after  the  death  of  the  decedent,  the  proper  probate  court, 
upon  application  of  the  state  treasurer,  shall  appoint  an  administrator  in 
this  state  as  provided  in  section  15. 

$  20.  The  state  treasurer  shall  be  entitled  to  appear  in  any  proceeding  in 
any  court  in  which  the  decree  may  in  any  way  affect  the  tax ;  and  no  decree 
in  any  such  proceeding,  or  upon  appeal  therefrom,  shall  be  binding  upon 
the  state  unless  personal  notice  of  such  proceeding  shall  have  been  given  to 
the  state  treasurer. 

§  21.  Requires  books  and  blanks  to  be  furnished  by  the  state  treasurer. 

NOTE. —  Prior  to  the  1915  amendment  all  personal  property  of  non-residents 
collaterals  and  strangers  within  the  State  was  also  subject  to  the  tax. 


NEW  JEESEY 

As  to  non-residents  taxes  real  property,  goods,  wares  and  merchandise 
within  the  state,  stock  in  New  Jersey  corporations,  and  of  national  banking 
associations,  located  within  the  state. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OH  RELATIONSHIP 

Amount 
of  ex- 
emption 

In  excess 
of  $5,000 
to  $50,000 

$50,000 
to 
$150,000 

$150,000 
to 
$250,000 

In  exceoo 
of 
$250,000 

Husband,  wife,  child,  lineal  issue, 
adopted  or  mutually  acknowledged 
child  and  its  issue. 

$5,000 

1% 

1}% 

2% 

3% 

Father,  mother,  brother,  sister,  daugh- 
ter-in-law, son-in-law. 

$5,000 

2% 

2i% 

3% 

4% 

Churches,  hospitals,  orphan  asylums, 
public  libraries,  Bible  and  tract  socie- 
ties, religious,  benevolent  and  chari- 
table institutions  operating  solely 
within  the  State  or  organized  under 
its  laws. 

All  exempt 

No  tax 

All  others  

$500 

5%  on  all  in  excess  of  exemption. 

CHAPTER  228,  LAWS  OF  1909,  AS  AMENDED  BY  CHAPTER  28,  LAWS 
OF  1910;  CHAPTER  226,  LAWS  OF  1912;  CHAPTER  151,  LAWS  OF 
19x4,  AND  CHAPTER  58,  LAWS  OF  1914. 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any 
property,  real  or  personal,  of  the  value  of  five  hundred  dollars  or  over,  or  o*f 
any  interest  therein  or  income  therefrom,  in  trust  or  otherwise,  to  persons 
or  corporations,  except  as  hereinafter  provided,  in  the  following  cases: 


THE  STATE  STATUTES  737 

First.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state 
from  any  person  dying  seized  or  possessed  of  the  property  while  a  resident 
of  the  state. 

Second.  When  the  transfer  is  by  will  or  intestate  law,  of  real  property 
within  this  state,  or  of  goods,  wares  and  merchandise  within  this  state,  or  of 
shares  of  stock  of  corporations  of  this  state,  or  of  national  banking  associa- 
tions located  in  this  state,  and  the  decedent  was  a  non-resident  of  the  state  at 
the  time  of  his  death. 

Third.  When  the  transfer  is  of  property  made  by  a  resident,  or  is  of  real 
property  within  this  state,  or  of  goods,  wares  and  merchandise  within  this 
state,  or  of  shares  of  stock  of  corporations  of  this  state  or  of  national  bank- 
ing associations  located  in  this  state,  made  by  a  non-resident,  by  deed,  grant, 
bargain,  sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor, 
vendor  or  donor,  or  intended  to  take  effect,  in  possession  or  enjoyment  at  or 
after  such  death. 

Fourth.  When  any  person  or  corporation  comes  into  the  possession  or 
enjoyment,  by  a  transfer  from  a  resident  or  from  a  non-reeident  decedent, 
when  such  non-resident  decedent's  property  consists  of  real  property  within 
this  state  or  of  shares  of  stock  of  corporations  of  this  state  or  of  national 
banking  associations  located  in  this  state,  of  an  estate  in  expectancy  of  any 
kind  or  character  which  is  contingent  or  defeasible,  transferred  by  an  instru- 
ment taking  effect  after  the  passage  of  this  act,  or  of  any  property  trans- 
ferred pursuant  to  a  power  of  appointment  contained  in  any  instrument  taking 
effect  after  the  passage  of  this  act. 

All  taxes  imposed  by  this  act  shall  be  at  the  rate  of  5  per  centum  upon 
the  clear  market  value  of  such  property,  except  as  hereinafter  provided,  to  be 
paid  to  the  treasurer  of  the  state  of  New  Jersey,  for  the  use  of  said  state, 
acd  all  administrators,  executors,  trustees,  grantees,  donees  or  vendees,  shall 
be  personally  liable  for  any  and  all  such  taxes  until  the  same  shall  have 
been  paid  as  .hereinafter  directed,  for  which  an  action  of  debt  shall  lie  in 
the  name  of  the  state  of  New  Jersey. 

The  rest  of  the  section  prescribes  the  rates  and  exemptions  as  given  in  the 
foregoing  table. 

§  2.  When  any  person  shall  bequeath  or  devise,  convey,  grant,  sell  or  give 
any  property  or  interest  therein,  or  income  therefrom,  to  any  person  or  cor- 
poration for  life  or  for  a  term  of  years,  and  a  vested  interest  in  the  remainder 
or  corpus  of  said  property  to  any  person,  or  to  anybody  politic  or  corporate, 
the  whole  of  said  property,  so  transferred  as  aforesaid,  shall  be  appraised 
immediately  at  its  clear  market  value,  and  after  deducting  from  such  appraise- 
ment the  value  of  the  estate  for  life  or  estate  for  a  term  of  years,  the  tax  on 
such  life  estate  or  for  a  term  of  years,  if  taxable  under  this  act,  shall  be 
immediately  levied  and  assessed,  and  the  tax  on  the  remainder  of  the  prop- 
erty so  as  aforesaid  transferred,  if  such  property  is  taxable  under  this  act, 
shall  be  levied  and  assessed  immediately,  but  such  tax  shall  not  become  due 
or  payable  until  the  time  or  period  arrives  when  said  remainderman,  or  his 
representatives,  shall  become  entitled  to  the  actual  possession  or  enjoyment 
of  such  property,  and  shall  then  become  due  and  payable  immediately,  and, 
if  not  paid  within  thirty  days,  interest  at  the  rate  of  ten  per  centum  per 
annum  shall  be  charged  and  collected  from  the  time  when  said  tax  became 
due  and  payable.  If  the  property  passing  to  a  remainderman,  as  hereinabove 
provided,  be  personal  property,  such  remainderman,  or  the  executor  or  trus- 
tee of  the  estate,  shall  give  a  bond  to  the  state  of  New  Jersey  in  double 
the  amount  of  the  tax  on  the  property  of  such  remainderman,  conditioned  to 
pay  said  tax,  and  any  interest  which  may  fall  due  thereon,  said  bond  to  be 
approved  as  to  the  form  and  sufficiency  thereof  by  the  attorney-general  of  this 
state,  and  any  executor  or  trustee  who  shall  assign  or  deliver  to  any  such 
remainderman  any  personal  property  liable  to  a  tax  under  this  act,  unless 
a  bond  be  given  as  specified  in  this  section,  or  said  tax  be  paid,  shall  be  per- 
sonally liable  for  said  tax  and  all  interest  due  thereon,  which  liability  may 
be  enforced  in  an  action  of  debt  in  the  name  of  the  state  of  New  Jersey. 

§  3.  W7here  an  instrument  creates  an  executory  devise,  or  an  estate  in 
expectancy  of  any  kind  or  character  which  is  contingent  or  defeasible,  the 

24 


738  INHERITANCE  TAXATION 

property  transferred  in  accordance  with  such  executory  devise  or  the  prop- 
erty in  which  such  contingent  or  defeasible  interest  is  created  by  any  such 
instrument,  shall  be  appraised  immediately  at  its  clear  market  value,  and 
after  deducting  from  such  appraisement  the  value  of  the  life  estate  or  estate 
for  a  term  of  years,  created  by  such  instrument,  the  tax  on  such  life  estate 
or  estate  for  a  term  of  years,  if  taxable  under  this  act,  shall  be  immediately 
levied  and  assessed,  but  the  tax  on  the  balance  of  said  appraised  value  of  such 
estate  shall  not  be  levied  or  assessed  until  the  person  or  corporation  entitled 
to  said  property  comes  into  the  beneficial  enjoyment,  seizin  or  possession 
thereof,  and  if  taxable,  shall  then  be  taxed.  Where  an  instrument  creates 
a  power  of  appointment,  the  life  estate,  or  estate  for  a  term  of  years,  created 
and  transferred  by  such  instrument,  if  taxable,  shall  be  immediately  appraised 
and  taxed  at  its  clear  market  value,  but  the  appraisal  and  taxation  of  the 
interest  or  interests  in  remainder  to  be  disposed  of  by  the  donee  of  power 
shall  be  suspended  until  the  exercise  of  the  power  of  appointment,  and  shall 
then  be  taxed,  if  taxable,  at  the  clear  market  value  of  such  property,  which 
value  of  such  property  shall  be  determined  as  of  the  date  of  the  death  of  the 
creator  of  the  power. 

A  tax  on  an  estate  for  life  or  on  an  estate  for  a  term  of  years,  levied  and 
assessed  as  directed  in  this  section,  shall  be  due  and  payable  as  provided  in 
.section  five  of  this  act.  All  other  taxes  levied  and  assessed  as  directed  in 
this  section  and  all  taxes  on  any  property  which  may  be  transferred  to  the 
residuary  legatees,  heir  or  next  of  kin  of  any  decedent,  or  which  may  revert 
to  the  heir  of  any  decedent  by  reason  of  the  failure  of  any  contingency  upon 
which  any  remainder  may  be  limited,  shall  be  due  and  payable  within  two 
months  after  the  person  entitled  to  the  property  shall  come  into  the  enjoy- 
ment, seizin  or  possession  thereof,  and  if  not  paid  shall  thenceforth  bear 
interest  at  the  rate  of  ten  per  centum  per  annum  until  paid.  No  executor 
or  trustee  shall  turn  over  any  property  of  an  estate  mentioned  in  this  sec- 
tion until  the  tax  due  thereon,  and  interest,  if  any,  shall  have  been  paid  to 
the  treasurer  of  this  state,  and  any  executor  or  trustee  who  shall  turn  over 
any  property  prior  to  the  payment  of  the  tax  due  thereon,  together  with 
interest,  shall  be  personally  liable  for  such  tax  and  interest,  which  said  lia- 
bility may  be  enforced  by  an  action  of  debt  in  the  name  of  the  state  of  New 
Jersey. 

The  comptroller  of  the  treasury  of  this  state,  by  and  with  the  consent  of 
the  attorney-general,  expressed  in  writing,  is  hereby  empowered  and  author- 
ized to  enter  into  an  agreement  with  the  executors  or  trustees  of  any  estate 
in  which  remainders  or  expectant  estates  have  been  of  such  a  nature,  or  so 
disposed  and  circumstanced  that  the  taxes  therein  were  held  not  presently 
payable,  or  where  the  interest  of  the  legatees  or  devisees  were  not  ascertain- 
able  at  the  death  of  the  testator,  grantor,  donor  or  vendor,  and  to  compound 
such  taxes  upon  such  terms  as  may  be  deemed  equitable  and  expedient;  and 
to  grant  discharge  to  said  executors  and  trustees  upon  the  payment  of  the 
taxes  provided  for  in  such  composition ;  provided,  however,  that  no  such  com- 
position shall  be  conclusive  in  favor  of  said  executors  or  trustees  as  against 
the  interest  of  such  cestuis  que  trust  as  may  possess  either  present  rights  of 
enjoyment,  or  fixed,  absolute  or  indefeasible  rights  of  future  enjoyment,  of 
or  such  as  would  possess  such  rights  in  the  event  of  the  immediate  termina- 
tion of  particular  estates,  unless  they  consent  thereto,  either  personally,  when 
competent,  or  by  guardian  or  committee. 

§  4.  Taxes  bequest  to  executors  in  lieu  of  commissions  where  in  excess  of 
reasonable  compensation  to  be  fixed  by  orphan's  court  having  jurisdiction. 

§  5.  Makes  taxes  due  at  death.  If  paid  within  six  months  gives  discount  of 
5  per  cent.  After  one  year  10  per  cert,  interest  charged  and  executors  or 
administrators  must  give  bond  for  payment  —  makes  tax  a  lien  on  real 
estate  until  paid. 

§  6.  In  case  of  unavoidable  delay  only  6  per  cent,  interest  is  charged  from 
end  of  year. 

§  7.  Requires  the  executor  or  administrator  to  deduct  the  tax  or  collect 
it  from  beneficiary  and  may  not  deliver  property  until  the  tax  is  paid.  Then 
heir  must  deduct  the  tax  before  paying  a  legacy  charged  on  real  estate  and 


THE  STATE  STATUTES  739 

the  tax  may  be  enforced  against  him  in  the  same  way  as  the  legacy.  If 
bequest  is  in  property  for  a  limited  period  court  must  make  an  apportion- 
ment of  the  tax  due  from  the  different  legatees. 

§  8.  Gives  power  of  sale  to  pay  the  tax  in  the  same  manner  as  in  case  of 
debts. 

§  9.  Provides  for  receipts  which  must  be  produced  as  vouchers  on  final 
accounting  and  for  duplicate  receipts  as  to  real  estate  to  be  recorded. 

§  12.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  trans- 
fer any  stock  or  obligations  in  this  state  standing  in  the  name  of  a  decedent, 
or  standing  in  the  joint  names  of  such  decedent  and  one  or  more  persons,  or 
in  trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the 
treasurer  of  this  state  on  the  transfer  thereof.  No  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution,  person  or  persons 
having  in  possession  or  under  control  securities,  deposits  or  other  assets 
belonging  to  or  standing  in  the  name  of  a  decedent  who  was  a  resident,  or 
belonging  to  or  standing  in  the  joint  names  of  such  a  resident  decedent  and 
one  or  more  person's,  including  the  shares  of  the  capital  stock  of,  or  other 
interests  in,  safe  deposit  company,  trust  company,  corporation,  bank  or  other 
institution  making  the  delivery  or  transfer  herein  provided,  shall  deliver 
or  transfer  the  same  to  the  executors,  administrators  or  legal  representatives 
of  said  decedent,  or  to  the  survivor  or  survivors  when  held  in  the  joint  names 
of  a  decedent  and  one  or  more  persons,  or  upon  their  order  or  request,  unless 
notice  of  the  time  and  place  of  such  intended  delivery  or  transfer  be  served 
upon  the  comptroller  of  the  treasury  of  this  state  at  least  ten  days  prior  to 
said  delivery  or  transfer;  nor  shall  any  such  safe  deposit  company,  trust 
company,  corporation,  bank  or  other  institution,  person  or  persons  deliver 
.  or  transfer  any  securities,  deposits  or  other  assets  belonging  to  or  standing 
in  the  name  of  a  resident  decedent,  or  belonging  to  or  standing  in  the  joint 
names  of  a  resident  decedent  and  one  or  more  persons,  including  the  shares  of 
the  capital  stock  of,  or  other  interests  in,  the  safe  deposit  company,  trust 
company,  corporation,  bank  or  other  institution  making  the  delivery  or  trans- 
fer, without  retaining  a  sufficient  portion  or  amount  thereof  to  pay  any  tax 
and  interest  which  may  thereafter  be  assessed  on  account  of  the  delivery  or 
transfer  of  such  securities,  deposits,  shares  of  stock,  or  other  assets,  including 
the  shares  of  capital  stock  of,  or  other  interests  in,  the  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution,  making  the  delivery  or 
transfer,  under  the  provisions  of  this  act,  unless  the  comptroller  of  the  treas- 
ury consents  thereto  in  writing.  And  it  shall  be  lawful  for  the  said  comp- 
troller of  the  treasury,  either  personally  or  by  representative,  to  examine 
said  securities,  deposits  or  assets  of  a  resident  decedent,  at  the  time 
of  such  delivery  and  transfer.  Failure  to  serve  such  notice  or  failure  to 
allow  such  examination,  or  failure  to  retain  a  sufficient  portion  or  amount  to 
pay  such  tax  and  interest  as  herein  provided  shall  render  said  safe  deposit 
company,  trust  company,  corporation^  bank  or  other  institution,  person  or 
persons  liable  to  the  payment  of  the  amount  of  the  tax  and  interest  due  or 
thereafter  to  become  due  upon  said  securities,  deposits,  shares  of  stock,  or 
other  assets,  including  the  shares  of  capital  stock  of,  or  other  interests  in, 
the  safe,  deposit  company,  trust  company,  corporation,  bank  or  other  institu- 
tion making  the  delivery  or  transfer,  and  in  addition  thereto  a  penalty  of 
one  thousand  dollars ;  which  liability  for  such  tax  and  interest,  or  the  penalty 
above  described,  or  both,  shall  be  enforced  in  an  action  of  debt  in  the  name  of 
the  state  of  New  Jersey,  and  the  same,  when  recovered,  shall  be  paid  into  the 
treasury  of  the  state  of  New  Jersey,  for  the  use  of  the  state. 

No  corporation  of  this  state  shall  transfer  any  stock  of  said  corporation 
standing  in  the  name  of  or  belonging  to  a  decedent,  resident  or  non-resident, 
or  in  the  joint  names  of  a  decedent  and  one  or  more  persons,  or  in  trust  for  a 
decedent,  unless  notice  of  the  time  of  such  intended  transfer  be  served  upon 
the  comptroller  of  the  treasury  of  this  state  at  least  ten  days  prior  to  such 
transfer,  nor  until  said  comptroller  shall  consent  thereto  in  writing.  Any 
corporation  making  such  a  transfer  without  first  obtaining  the  consent  of  the 
comptroller  of  the  treasury  as  aforesaid  shall  be  liable  for  the  amount  of  any 
tax  which  may  thereafter  be  assessed  on  account  of  the  transfer  of  such  stock, 


740  -INHERITANCE  TAXATION 

together  with  the  interest  thereon,  and  in  addition  thereto  a  penalty  of  one 
thousand  dollars,  which  liability  for  such  tax.  and  interest  and  the  said  penalty 
prescribed  may  be  enforced  in  an  action  of  debt  in  the  name  of  the  state  of 
New  Jersey,  said  penalty,  when  recovered,  to  be  paid  into  the  treasury  of  the 
state  of  New  Jersey. 

A  tax  shall  be  assessed  on  the  transfer  of  property  made  subject  to  tax  as 
aforesaid,  in  this  state  of  a  non-resident  decedent  if  all  or  any  part  of  the 
estate  of  sueh  decedent,  wherever  situated,  shall  pass  to  persons  or  corpora- 
tions taxable  under  this  act,  which  £ax  shall  bear  the  same  ratio  to  the  entire 
tax  which  the  said  estate  would  have  been  subject  to  under  this  act  if  such 
non-resident  decedent  had  been  a  resident  of  this  state,  and  all  his  property, 
real  and  personal,  had  been  located  within  this  state,  as  such  taxable  property 
within  this  state  bears  to  the  entire  estate,  wherever  situated ;  provided,  that 
nothing  in  this  clause  contained  shall  apply  to  any  specific  bequest  or  devise  of 
any  property  in  this  state. 

§  13.  The  comptroller  of  the  treasury  of  this  state,  either  personally  or  by 
any  of  his  employees,  may  investigate  the  question  of*the  liability  of  any 
property  to  any  tax  due  prior  to  the  passage  of  this  act,  and  if  said  comp- 
troller is  satisfied  that  any  taxes  are  due  this  state,  he  shall  report  such  fact 
to  the  register  of  the  prerogative  court,  or  surrogate  of  the  proper  county, 
whereupon  said  register  or  surrogate  shall  cause  said  property  to  be  taxed. 

§  14.  Provides  that  life  estates  are  to  be  computed  by  American  experience 
tables  on  basis  of  5  per  cent. 

§  15.  Provides  for  the  refund  of  taxes  erroneously  paid  if  application  made 
to  comptroller  of  the  treasury  within  two  years. 

§  16.  Requires  the  register  of  the  prerogative  court  and  all  surrogates  to 
notify  the  comptroller  within  ten  days  of  all  probate  proceedings. 

§  17-  Empowers  the  comptroller  to  examine  all  papers,  documents  and  files 
in  possession  of  private  or  public  corporations  or  persons. 

§  18.  Provides  for  the  appointment  of  an  appraiser,  the  valuation  of  the 
property  and  appeal  on  filing  a  bond  to  pay  the  tax. 

§  .19.  Provides  compensation  of  appraisers  and  imposes  a  penalty  for 
accepting  fee  or  reward. 

§  .20.  Gives  the  ordinary  of  the  state  jurisdiction  in  all  transfer  tax 
matters. 

§§  21  and  25.  Provide  for  the  keeping  of  records  and  the  collection  of 
delinquent  taxes. 

§  26.  The  words  "  estate  "  and  "  property,"  wherever  used  in  this  act,  except 
where  the  subject  or  context  is  repugnant  to  such  construction,  shall  be  con- 
strued to  mean  the  interest  of  the  testator,  intestate,  grantor,  bargainer  or 
vendor,  passing  or  transferred  to  the  individual  or  specific  legatee,  devisee, 
ieir,  next  of  kin,  grantee,  donee  or  vendee,  not  exempt  under  the  provisions 
of  this  act,  whether  such  property  be  situated  within  or  without  this  state. 
The  word  "  transfer,"  as  used  in  this  act,  shall  be  taken  to  include  the  passing 
of  property,  or  any  interest  therein,  in  possession  or  enjoyment,  present  or 
future,  by  distribution  by  statute,  descent,  devise,  bequest,  grant,  deed,  bar- 
gain, sale  or  gift. 

§  27.  Provides  that  if  any  section  is  held  unconstitutional  it  shall  not 
affect  the  rest  of  the  act. 

§  28.  Repeals  prior  ;acts  with  a  saving  clause  as  to  prior  taxes  and 
remedies. 

Amendment  by  chapter  58,  L.  1914. 

1.  Whenever  a  foreign  executor,  administrator  or  trustee  shall  desire  to 
transfer  stock  in  a  New  Jersey  corporation,  owned  by  a  non-resident  decedent, 
it  shall. and  may  be  lawful  for  the  comptroller  of  the  treasury  of  this  state  to 
issue  a  waiver  for  the  transfer  of  said  stock  upon  such  foreign  executor, 
administrator  or  trustee  paying  to  the  comptroller  of  the  treasury  a  five  per 
eentum  tax,  based  upon  the  iull  value  of  the  said  shares  of  stock  or  property. 
If  after  said  transfer  it  shall  be  ascertained  by  the  comptroller  of  the  treasury 
that  the  said  stock  or  property  was  not  liable  to  said  full  five  per  centum  tax, 
said  comptroller  of  the  treasury  shall  by  his  check  pay  to  said  executor, 
administrator  or  trustee  the  amount  overpaid  to  the  state  comptroller.  For 


THE  STATE  STATUTES 


741 


the  purpose  of  carrying  into  effect  the  provisions  of  his  act,  the  comptroller  of 
the  treasury  is  hereby  expressly  authorized  to  maintain  a  separate  fund  into 
which  shall  be  paid  the  amount  of  taxes  as  aforesaid,  and  when  the  exact  or 
precise  tax  which  the  stock  or  property  in  New  Jersey  is  liable  for  shall  have 
been  ascertained,  the  comptroller  of  the  treasury  shall  pay  to  the  treasurer  of 
the  state  of  New  Jersey,  the  amount  of  said  tax  so  ascertained  to  be  due. 

Prior  Statutes:  L.  1892,  ch.  122;  L,.  1893,  ch.  210;  L,.  1894,  ch.  210;  L.  1898, 
ch.  62;  L.  1902,  ch.  217;  L.  1903,  ch.  90;  L.  1906,  chapters  227  and  228;  L.  1908, 
ch.  131;  L.  1909,  chapters  156  and  209. 


NEW  MEXICO 


Levies  no  inheritance  tax. 


NORTH  CAROLINA 

Taxes  all  property  of  non-residents  within  the  state. 

TABLE  OF   RATES  AND  EXEMPTIONS 


CLASS  OR  RELATIONSHIP 

Amount  of  exemption 

Graded  rates 

Above 
exemp- 
tion to 
$25,000 

$25,000 
to 
$100,000 

$100,000 
to 
$250,000 

$250:000 
to 

$500,000 

In 
excess  of 
$500,000 

Lineal  issue,  lineal  an- 
cestor, adopted  child, 
husband  or  wife. 

Widow,  $10,000.  Each 
minor  child,  $5,000; 
others,  $2,000; 
grandchildren  divide 
parents'  exemption. 

1% 

2% 

3% 

4% 

5% 

Brother  or  sister  and  their 
descendants. 

II  less  than  $200  no 
tax. 

3% 

4% 

5% 

6% 

7% 

Other  collaterals  or 
strangers. 

If  less  than  $200  no 
tax. 

5% 

6% 

7% 

8% 

9% 

Religious,  charitable  or 
educational  corpo- 
rations within  the  State. 

All. 

LAWS  OF  1913,  CHAPTER  203,  AS  AMENDED  BY  LAWS  OF  1915,  CHAP- 
TER 285,  AND  BY  THE  REVENUE  ACT  OF  1917. 

Section  6.  From  and  after  the  passage  of  this  act,  all  real  and  personal 
property  of  whatever  kind  and  nature  which  shall  pass  by  will  or  by  the 
intestate  laws  of  this  state  from  any  person  who  may  die  seized  or  possessed 
of  the  same  while  a  resident  of  this  state,  whether  the  person  or  persons  dying 
seized  thereof  be  domiciled  within  or  out  of  the  state,  or  if  the  decedent  was 
not  a  resident  of  this  state  at  the  time  of  his  death,  such  property  or  any 
part  thereof  within  this  state,  or  any  interest  therein,  or  income  therefrom 
which  shall  be  transferred  by  deed,  grant,  sale  or  gift,  made  in  contemplation 
of  the  death  of  the  grantor,  bargainer,  donor  or  assignor,  or  intended  to  take 
effect,  in  possession  or  enjoyment  after  such  death,  to  any  person  or  persona 
or  to  bodies  corporate  or  politic,  in  trust  or  otherwise,  or  by  reason  whereof 
any  person  or  body  corporate  or  politic  shall  become  beneficially  entitled  in 
possession  or  expectancy  to  any  property  or  the  income  thereof,  shall  be  and 
hereby  is  made  subject  to  a  tax  for  the  benefit  of  the  state,  as  follows,  that  is 
to  say: 

The  rest  of  the  section  prescribes  the  rates  and  exemptions  of  the  foregoing 
table,  and  requires  the  clerk  of  the  superior  court  to  appraise  the  estate  and 
fix  the  tax  when  an  estate  is  divided  among  the  heirs  without  the  appointment 
of  a  personal  representative  of  the  deceased. 


742  INHERITANCE  TAXATION 

§  7.  Provides  that  beneficiaries,  executors,  administrators  can  only  be  dis- 
charged from  liability  for  the  tax  by  paying  it. 

§  8.  All  taxes  imposed  by  this  act  shall  be  due  and  payable  at  the  death  of 
the  testator,  intestate,  grantor,  donor  or  vendor,  unless  in  this  act  otherwise 
provided,  and  if  the  same  are  paid  within  six  months  from  the  date  of  the 
death  of  the  testator,  intestate,  grantor,  donor  or  vendor,  a,  discount  of  two 
and  one-half  per  centum  shall  be  allowed  and  deducted  from  such  taxes;  if 
not  paid  within  one  year  from  the  date  of  the  death  of  the  testator,  intestate, 
grantor,  donor  or  vendor,  such  tax  shall  bear  inerest  at  the  rate  of  six  per 
centum  per  annum,  to  be  computed  from  the  expiration  of  one  year  from  the 
date  of  the  death  of  such  testator,  intestate,  grantor,  donor  or  vendor,  for  a 
period  of  one  year,  and  ten  per  centum  per  annum  thereafter  until  the  same 
is  paid.  [As  amended  by  revenue  act  of  19 17.'] 

§  8    (a) .  Collection  to  be  made  by  sheriff  if  not  paid  in  two  years. 

If  taxes  imposed  by  this  act  are  not  paid  within  two  years  after  the  death 
of  the  decedent,  it  shall  be  the  duty  of  the  clerk  to  certify  to  the  sheriff  the 
amount  of  tax  due  upon  such  inheritance,  and  the  sheriff  shall  collect  the 
same  as  other  taxes,  with  an  addition  of  two  and  one-half  per  cent  as  sheriff's 
fees  for  collecting  same;  and  the  sheriff  is  hereby  given  the  same  rights  of 
levy  and  sale  upon  any  property  upon  which  the  said  tax  is  payable  as  is 
given  in  the  machinery  act  for  the  collection  of  other  taxes.  The  sheriff  shall 
make  return  to  the  clerk  of  the  superior  court  of  all  such  taxes  within  thirty 
days  after  collection,  to  be  accounted  for  by  the  clerk  in  monthly  settlement 
with  the  state  auditor  and  treasurer  as  provided  by  law:  Provided,  that  time 
for  payment  and  collection  of  such  tax  may  be  extended  by  the  state  tax 
commission  for  good  reason  shown.  [As  amended  by  Revenue  Act  of  1917.] 

§  9.  Requires  the  executor  or  administrator  to  deduct  the  tax  or  collect  it 
from  beneficiary  and  gives  power  of  sale  in  case  of  refusal  of  beneficiary  to 
pay. 

§  10.  Requires  the  court  to  apportion  the  tax  between  life  tenants  and 
remaindermen. 

§  11.  Requires  the  heir  to  deduct  the  tax  when  a  legacy  is  made  a  charge 
on  real  estate. 

§  12.  Provides  for  receipts  which  must  be  produced  on  final  accounting. 

§  13.  Whenever  any  foreign  executor  or  administrator  or  trustee  shall 
assign  or  transfer  any  stocks  or  bonds  in  this  state  standing  in  the  name  of 
the  decedent  or  in  trust  for  a  decedent,  which  shall  be  liable  for  the  said  tax, 
such  tax  shall  be  paid  on  the  transfer  thereof  to  the  clerk  of  the  court  of  the 
county  where  such  transfer  is  made ;  otherwise  the  corporation  permitting  such 
transfer  shall  become  liable  to  pay  such  tax. 

§  14.  Whenever  debts  shall  be  proven  against  the  estate  of  a  decedent,  after 
the  distribution  of  legacies  from  which  the  inheritance  tax  has  been  deducted 
in  compliance  with  this  act,  and  the  legatee  is  required  to  refund  any  portion 
of  the  legacy,  a  proportion  of  the  said  tax  shall  be  repaid  to  him  by  the 
executor  or  administrator  if  the  said  tax  has  not  been  paid  into  the  state 
treasury,  or  shall  be  refunded  by  the  state  treasurer  if  it  has  been  so  paid  in. 

§§  15  to  21.  Make  the  usual  provisions  for  the  appointment  of  appraisers, 
the  valuation  of  the  estate  and  the  collection  of  delinquent  taxes. 

Prior  Statutes:  Collateral  inheritances  have  been  taxed  since  1847  Statutes 
for  the  last  twenty  years  are  as  follows:  Code  of  1883,  §  3867;  L.  1897,  ch. 
168;  L.  1901,  ch.  9;  L.  1903,  Revenue  Act,  ch.  247;  L.  1905,  ch.  588;  L.  1907, 
ch.  256;  L.  1909,  ch.  438;  L.  1911,  ch.  46. 


THE  STATE  STATUTES 


743 


NORTH  DAKOTA 

Taxes  all  property  of  non-residents  within  the  state  but  exempts  tangible 
property  of  residents  located  in  another  state  provided  said  state  makes  a 
like  exemption. 

TABLE  OF  GRADED  RATES  AND  EXEMPTIONS  UNDER  STATUTE  OF  1917 


CLASS  OB  RELATIONSHIP 

Amount 
exempt 

Rates  of  tax 

Above 
exemp- 
tion to 
$25,000 

$25,000 
to 
$50,000 

$50,000 
to 
$100,000 

$100,000 
to 
$500,000 

In  excess 
of 
$500,000 

$10,000 

1 
1% 

U% 

2% 

21% 

3% 

Lineal  issue,  lineal  ancestor,  adopted  or 
mutually  acknowledged  child. 

$2.000 

Brother  or  sister  or  their  descendants, 
son-in-law,  daughter-in  law. 

$500 

H% 

2i% 

3% 

3|% 

71% 

Aunt  or  uncle  or  their  descendants  .... 

$250 

3% 

41% 

6% 

71% 

9% 

Brother  or  sister  of  grandparents  or 
their  descendants. 

$150 

4% 

6% 

8% 

10% 

12% 

All  others  except  exempt  corporations.  . 

$100 

5% 

71% 

10% 

121% 

15% 

Municipal  corporations  within  the  State 
for  strictly  municipal  purposes,  relig- 
ious, charitable  and  educational  in- 
stitutions or  organized  by  the  laws  of 
the  State  for  such  purposes  within  the 
State. 

All 

No  tax 

TABLE  OF  RATES  AND  EXEMPTIONS  FROM  MARCH  15,  1913,  TO  MAY  1,  1917 


CLASS  OR  RELATIONSHIP 

Amount 
of  ex- 
emption 

Graded  rates 

Above 
exemption  up  to 
$100,000 

$100,000 
to 
$250.000 

$250,000 
to 
$500,000 

In  excess 
of 
$500,000 

$20,000 

1% 

2% 

21% 

3% 

Father,  mother,  lineal  descendant, 
adopted  child  or  its  lineal  descendant. 

$10,000 

Brother,  sister,  son-in-law,  daughter- 
in-law. 

$500 

Above 
exemp- 
tion to 
$25,000 

$25,000 
to 
$50,000 

$50,000 
to 
$100,000 

$100,000 
to 
$500,000 

In  excess 
of 
$500,000 

11% 

2i% 

3% 

3i% 

41% 

Aunt  or  uncle  and  their  descendants  .  .  . 

None 

3% 

41% 

6% 

7}% 

9% 

All  others  except  aliens,  nonresidents 
and  charitable  bequests  exempted  by 
section  24. 

None 

5% 

6% 

9% 

12% 

15% 

Collaterals  or  strangers  who  are  aliens 
not  residing  in  the  United  States,  or 
corporations  with  alien  charters. 

None 

25%  on  entire  legacy. 

NOTE. —  As  to  aliens  probably  unconstitutional,  repealed  by  act  of  1917. 


744  IXHEKITAXCE   TAXATION 

This  present  year,  1917,  North  Dakota  adopted  an  entirely  new  inheritance 
tax  law.     The  prior  statute,  chapter  185,  L.   1913,  in  force  since  March   15, 
^  was  not  greatly  changed  except  as  to  graded  rates  and  exemptions. 


THE  PRESENT  ACT  BECAME  A  LAW  IN  MAY,  1917. 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any 
property  or  any  interest  therein  or  income  therefrom  in  trust  or  otherwise, 
to  any  person,  association,  or  corporation  except  county,  town  or  municipal 
corporations  within  the  state  for  strictly  county,  town  or  municipal  pur- 
poses and  corporations  of  this  state  organized  under  its  laws  solely  for 
religious,  charitable  or  educational  purposes  which  shall  use  the  property  so 
transferred  exclusively  for  the  purpose  of  their  organization  within  the  state, 
provided  : 

1.  By  a  resident  of  the  state.  When  the  transfer  is  by  will  or  by  the  intes- 
tate laws  of  this  state  from  any  person  dying  possessed  of  the  property  while 
a  resident  of  the  state. 

2..  Non-resident's  property  within  the  state.  When  the  transfer  is  by  will 
or  intestate  law  of  property  within  this  state  or  within  its  jurisdiction  and 
the  decedent  was  a  non-resident  of  the  state  at  the  time  of  his  death. 

3.  In  Contemplation  of  Death.    When  the  transfer  is  of  .  property  made  by  a 
resident  or  by  a  non-resident  when  such  non-resident's  property  is  within  the 
state,  or  within  its  jurisdiction,  by  deed,  grant,  bargain,  sale  or  gift,  made  in 
contemplation  of  the  death  of  the  grantor,  vendor  or  donor,  or  intended  to 
take  effect  in  possession  or  enjoyment  at  or  after  such  death.-    Every  transfer  • 
by  deed,  grant,  bargain,  sale  or  gift,  made  within:  six  years  prior  to  the  death 
of  the  grantor,  vendor,  or  donor,  of  a  material  part  of  his  estate,  or  in  the 
nature  of  a  final  disposition  or  distribution  thereof,  and  without  an  adequate 
valuable  consideration,  shall  be  construed  to  have  been.  made  in  contemplation 
of  death  within  the  meaning  of  this  section. 

4.  When  Imposed.     Such  tax  shall  be  imposed  when,  any  such,  person  o>' 
corporation  becomes  beneficially  entitled,  in  possession  or  expediency,  to  any 
property  or  the  income  thereof,  by  any  such  transfer  whether  made  before  or 
after  the  passage  of  this  act. 

5.  Transfer  Under  Power  of  Appointment.    Whenever  any  person  or  cor- 
poration shall  exercise  a  power  of  appointment  derived,  from  any  disposition 
of  property,  made  either  before  or  after  the  passage  oi  this  act,  such_  appoint- 
ment, when  made,  shall  be  deemed  a  transfer  taxable  under  .the  provisions  of 
this  act,  in  the  same  manner  as  though  the  property  to  which  such  appoint- 
ment relates  belonged  absolutely  to  the  donee  of  such  power,  and  had  been 
bequeathed  or  devised,  by  such  donee  by  will;   and  whenever  any  person  or 
corporation  possessing  such  a  power  of  appointment  so  derived  shall  omit  or 
fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole  or  in  part, 
a  transfer  taxable  under  the  provisions  of  this  act  shall  be-deemed  to  take 
place  to  the  extent  of  such  omission  or  failure,  in  the  manner  as  though 
the  persons  or  corporations  thereby  becoming  entitled  to  the  possession,  or 
enjoyment  of  the  property  to  which  such  power  related  had  succeeded  thereto 
by  a  will  of  the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect 
at  the  time  of  such  omission  or  failure. 

6.  On  Clear  Market  Value.     The  ta«  so  imposed  shall  be  upon  the  clear 
market  value  of  such  property  at  the  rates  hereinafter  prescribed  and  only 
upon  the  excess  of  the  exemptions  hereinafter  grantetL 

§§  2,  3  and  4.  Prescribe  the  rates  and  exemptions  of  the  foregoing  table. 
Subdivision,  7,  section  4,  is  as  follows: 

7.  Property  Without  the  State  Exempt.  —  When:     No  tax  shall  be  imposed 
upon  any  tangible  personal  property  of  a  resident  decedent  when  such  prop- 
erty is  located  without  this  state,  and  when  the  transfer  of  such  property  is 
subject  to  an  inheritance  or  transfer  tax  in  the  state  where  located  and  which 
tax  has  actually  been  paid,  provided  such  property  is  not  without  this  state 
temporarily  nor  for  the  sole  purpose  of  deposit  or  safe-keeping;    and  pro- 
vided the  laws  of  the   state  where  such   property  is  located   allow  a  like 
exemption  in  relation  to  such  property  left  by  a  resident  of  that  state  and 
located  in  this  state. 


THE  STATE  STATUTES-  745 

§  5.  Makes  the  tax  due  at  the  thne  of  the  transfer  and  a  lien  upon  .the 
property  transferred  until  paid., 

§  6.  Provides  for  receipts  to  be  given  by  county  treasurers. 

§  7.  Requires  the  executor  or  administrator  to  produce  such  a  receipt 
before  his  is  entitled  to  final  accounting. 

§  8.  Provides  that  if  the  tax  is  not  paid  within  one  year  interest  shall  be 
charged  at  the  rate  of  10  per  cent,  from  date  of  accrual,  except  in  case  of 
unavoidable  delay,  when  interest  may  be  reduced  to  6  per  cent  until  the  cause 
of  delay  is  removed,  after  that  10  per  cent. 

§  9.  Gives  executor  or  administrator  power  of  sale  in  the  same  way  as  to 
pay  debts.  Requires  them  to  collect  the  tax  from  the  legatee  or  to  deduct  it 
from  the  legacy,  if  in  money,  and  forbids  delivery-  of  the  legacy  until  pay- 
ment of  the  tax. 

§  10.  Provides  for  a  proportionate  refund  in  case  debts  are  subsequently 
proved  against  the  estate. 

§  11.  Makes  further  provision  for  refunds  but  provides  that  applications 
must  be  made  within  one  year  from  payment  or  one  year  after  reversal,  or 
modification  of  an  order  fixing  such  tax. 

§  12.  Taxes  bequests  to  executors  in  lieu  of'  commissions  in  excess  of  reason- 
able value  of  services. 

§  13.  Requires  executors  or  administrators  of  non-resident  estates  to  file 
an  inventory  with  the  state  tax  commission  unless  ancillary  proceedings  are 
brought  within  the  state. 

§  13-a.  Contents  of  report.  Time  of  filing.  Duty  of  state  tax  commission. — 
Said  list  shall  be  in  the  form  of  an  affidavit  and  shall  be  sworn  to  by  the 
executor  or  administrator  of  said  estate,  and  shall  contain  a  detailed  descrip- 
tion of  the  property  and  the  value  thereof,  owned  by  said  non-resident  dece- 
dent in  this  state  as  of  the  date  of  his  death.  If  such  property  consists  in* 
whole  or  in  part  of  mortgages  secured  upon  real  or  personal  property  situated  - 
in  this  state  such  list  shall  enumerate  each  mortgage  separately,  stating  the 
name  and  post  office  address  of  the  mortgagor,  the  county  in  which  the  mort- 
gaged property  is  situated,  the  date  of  the  execution  of  said  mortgage,  the 
amount  for  which  such  mortgage  was  given,  the  rate  of  interest  and  the 
amount  due  on  said  mortgage  at  the  time  of  the  death1  of  the  decedent  and, 
inr  addition,  if  said  mortgaged  property  consists  of  real  estate,  the  legal 
description  of  the  same  shall  be  given.  If  such  property  consists  in  whole  or 
in1  part  of  debt  evidenced  in  any  other  manner  than  by  mortgages  secured  on 
real  or  personal  property,  said  list  shall  contain  the  name  of  the  debtor,  the 
amount  of  the  debt,  as  of  the  date  of  the  death  of  the  decedent,  and  the  nature 
of  said  debt;  Said  list  shall  be  filed  with  the  state  tax  commission  within  thirty 
days  of  the  issuing  of  the  letters  testamentary-or  letters  of  administration,  as 
the-case  may  be.  Upon  receipt  of  said  list  in  proper  form  the  state  tax  commis- 
sion shall  proceed  to  determine  the- amount  of  the- inheritance  tax,  if  any; 
due  the  state  of •  North  Dakota  from  said  estate;  and  upon  such  determination 
shall  notify  the  administrator  or  executor  of  said  estate  immediately  whether 
the  same  is  taxable  or  exempt  and,  if  taxable,  the  amount  for  which  said 
estate  is  liable,  also  the  manner  in. which  the  tax  shall  be  paid. 

§  13-b.  State  treasurer  shall  issue  receipt  and  certified  statement. — The 
state  treasurer  shall,  upon  receipts  of  the  total  amount  of  the  tax  due  from 
said  estate  issue  to  the  administrator  or  executor,  paying  the  same,  his  receipt 
therefor,  and  in' addition  to  said  receipt,  shall  at  the  same  time  issue  to  said 
administrator  or  executor  a  certified  statement  bearing  the  seal  of  his  office 
to  the  effect  that  the  full  amount  of  the  inheritance  tax  due  from  the  said 
estate  to  the  state  of  Xorth  Dakota  has  been  paid. 

§  13-c.  State  tax  commission  shall  issue  certified  statements  when. —  The 
state  tax  commission  shall,  upon  determining  that  any-  such  estate  is  exempt 
from  the  payment  of  any  inheritance  tax  to  the  state  of  North  Dakota,  cause  a 
certified  statement  of  such  fact  to  be  executed  by  one  of  its  members  in  the 
name  of  the  state  tax  commission  and  shall  send  such  certified  statement  to 
the  executor  or  administrator  of  said  estate. 

§  14.  Duty  of  register  of  deeds  as  to  satisfactions  and  assignments. —  Xo 
register  of  deeds  shall  cause  to  be  recorded  or  filed  in  Jiis  office  any  satisfaction 


746  INHERITANCE  TAXATION 

or  assignment  of  any  real  or  personal  property  mortgage  executed  by  a  foreign 
executor  or  administrator  unless  said  satisfaction  or  assignment  shall  be 
accompanied,  for  his  inspection,  by  either  the  certified  statement  of  the  state 
treasurer  that  the  inheritance  tax  due  the  state  of  North  Dakota  from  such 
estate  has  been  paid,  or  by  the  certified  statement  of  the  state  tax  commission 
that  said  estate  has  been  determined  to  be  exempt  from  the  payment  of  any 
inheritance  tax  to  the  state  of  North  Dakota. 

§  14-a.  Transfer  of  assets  by  foreign  executor  or  administrator. —  No  safe 
deposit  company,  trust  company,  corporation,  bank  or  other  institution,  person 
or  persons  having  in  their  possession  or  under  their  control  securities,  deposits 
or  other  assets  belonging  to  the  estate  of  such  non-resident  decedent  shall 
deliver  or  transfer  any  assets  belonging  to  the  estate  of  such  non-resident 
decedent  to  the  administrator  or  executor  of  such  estate  or  to  any  other  per- 
son or  persons  upon  the  order  of  said  administrator  or  executor  unless  said 
administrator  or  executor  or  such  other  person  holding  such  order  for  the 
transfer  or  delivery  of  such  assets  shall  submit  to  said  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution,  person  or  persons,  hav- 
ing in  their  possession  or  under  their  control  such  assets  belonging  to  the 
estate  of  the  decedent  either  the  certified  statement  of  the  state  treasurer  to 
the  effect  that  the  inheritance  tax  due  the  state  of  North  Dakota  from  said 
estate  has  been  paid,  or  the  certified  statement  of  the  state  tax  commission  to 
the  effect  that  said  estate  is  exempt  from  paying  any  inheritance  tax  to  the 
state  of  North  Dakota. 

§  14-b.  Penalty. — Any  register  of  deeds,  safe  deposit  company,  trust  com- 
pany, corporation,  bank  or  other  institution,  person  or  persons,  violating  the 
provisions  of  this  act  shall  be  liable  to  the  state  for  the  amount  of  the  tax. 

§  15.  Corporate  property  to  be  apportioned. —  Where  stocks,  bonds,  mort- 
gages, or  other  securities  of  corporations  organized  under  the  laws  of  this 
state  shall  have  been  transferred  by  a  non-resident  decedent,  the  tax  shall  be 
upon  such  proportion  of  the  value  thereof  as  the  property  of  such  corporation 
in  this  state  bears  to  the  total  property  of  the  corporation  issuing  such  stocks, 
bonds,  mortgages,  or  other  securities. 

§  16.  Holding  company. —  Apportionment. —  If  any  stocks,  bonds,  mortgages, 
or  other  securities  of  a  holding  company  or  other  corporation  are  based  upon 
or  represent  in  whole  or  in  part  the  value  of  any  stocks,  bonds,  mortgages,  or 
other  securities  of  a  North  Dakota  corporation,  either  directly  or  indirectly, 
the  transfer  of  the  stocks,  bonds,  mortgages,  or  other  securities  of  such  hold- 
ing company  or  other  corporation  shall  be  subject  to  the  inheritance  tax  in 
the  proportion  which  the  North  Dakota  property  bears  to  the  total  property 
represented  by  or  subject  to  the  total  stocks,  bonds,  mortgages,  or  other 
securities  of  which  those  so  transferred  are  a  part. 

§  17.  Debts,  exemptions,  etc. —  To  be  apportioned.  Whenever  a  tax  is  due 
from  any  resident  or  non-resident  upon  the  transfer  of  any  property  or  estate 
which  is  partly  within  and  partly  without  the  state,  or  upon  any  stocks,  bonds, 
mortgages,  or  other  securities  representing  any  such  property  partly  within 
and  partly  without  this  state,  such  person  shall  be  entitled  to  deduct  from  the 
value  of  such  property  so  transferred  only  a  proportion  of  the  debts,  expenses 
of  administration  and  exemptions,  equal  to  the  proportion  which  the  North 
Dakota  property  bears  to  the  entire  estate  of  the  decedent. 

§  18.  Provides  for  rules  and  regulations  by  the  tax  commissions  and  forbids 
any  local  corporation  to  transfer  any  non-resident  securities  without  retain- 
ing sufficient  funds  to  pay  the  tax. 

§  19.  Makes  corporations  violating  provisions  of  the  act  liable  for  the  tax 
and  for  a  wilful  violation  may  forfeit  their  charters. 

§  20.  Gives  the  county  court  having  jurisdiction  to  issue  letters  upon  the 
estate  jurisdiction  in  tax  matters. 

§  21.  Provides  for  petition  for  ancillary  letters. 

§  22.  Gives  the  county  court  at  the  seat  of  government  jurisdiction  of 
delinquent  non-resident  taxes. 

The  remaining  sections,  23  to  47,  relate  to  the  appointment  of  appraisers 
and  the  usual  provisions  as  to  procedure. 

Prior  Statutes:     L.  1903,  ch.  171.  L.  1905,  ch.  10,  L.  1913,  ch.  185. 


THE  STATE  STATUTES 


747 


OHIO 

Taxes  property  of  non-residents  within  the  state  on  transfers  to  collaterals 
and  strangers. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OR  RELATIONSHIP 

Amount  exempt 

Rate  of  tax 

Father    mother,  husband,  wife,  lineal  descendant,  adopted 

All  

No  tax 

child. 

All 

No  tax 

purposes,  public  institutions  of  learning,  charity  or  other 
exclusive  public  purpose. 

If  less  than  $500. 

5%  on  all 

GENERAL  CODE  OF  1910,  AS  AMENDED  BY  STATUTE  OF  1913,  PAGE  463. 

Section  5331.  All  property  within  the  jurisdiction  of  this  state,  and  any 
interests  therein,  whether  belonging  to  inhabitants  of  this  state  or  not,  and 
whether  tangible  or  intangible,  which  pass  by  will  or  by  the  intestate  laws  of 
this  state,  or  by  deed,  grant,  sale  or  gift,  made  or  intended  to  take  effect  in  pos- 
session or  enjoyment  after  the  death  of  the  grantor,  to  a  person  in  trust,  or 
otherwise,  other  than  to  or  for  the  use  of  the  father,  mother,  husband,  wife, 
lineal  descendant  or  adopted  child,  shall  be  liable  to  a  tax  of  five  per  cent  of 
its  value  above  the  sum  of  five  hundred  dollars.  Fifty  per  cent  of  such  tax 
shall  be  for  the  use  of  the  state ;  and  fifty  per  cent  of  such  tax  shall  go  to  the 
city,  village  or  township  in  which  said  tax  originates.  All  administrators, 
executors  or  trustees,  and  any  such  grantee  under  a  conveyance  made  during 
the  grantor's  life,  shall  be  liable  for  all  such  taxes,  with  lawful  interest  as 
hereinafter  provided,  until  they  have  been  paid,  as  hereinafter  directed.  Such 
taxes  shall  become  due  and  payable  immediately  upon  the  death  of  the  dece- 
dent and  shall  at  once  become  a  lien  upon  the  property,  and  be  and  remain  a 
lien  until  paid. 

§  5332.     Prescribe  the  exemptions  to  institutions  as  above. 

§  5333.  When  a  person  bequeaths  or  devises  property  to  or  for  the  use  of 
father,  mother,  husband,  wife,  lineal  descendant,  or  adopted  child,  during  life 
or  for  a  term  of  years,  and  the  remainder  to  a  collateral  heir  or  to  a  stranger 
to  the  blood  the  value  of  the  prior  estate,  shall  be  appraised,  within  sixty 
days  after  the  death  of  the  testator,  in  the  manner  hereinafter  provided,  and 
deducted,  together  with  the  sum  of  five  hundred  dollars,  from  the  appraised 
value  of  such  property. 

§  5334.  Taxes  bequests  to  executors  in  lieu  of  commissions,  where  in 
excess  of  reasonable  compensation. 

§  5335.  Requires  taxes  to  be  paid  within  one  year  with  a  discount  of  1 
per  cent  per  full  month  that  payment  is  made  prior  to  expiration  of  a  year, 
after  one  year  interest  is  charged  at  8  per  cent  and  after  eighteen  months  the 
prosecuting  attorney  is  required  to  bring  proceedings  on  notice  from  the 
probate  judge  that  the  tax  remains  unpaid. 

§  5336.  Requires  the  executor  or  administrator  to  deduct  the  tax  or  collect 
it  from  the  beneficiary  and  must  not  deliver  property  until  the  tax  has  been 
paid. 

§  5337.  Requires  the  heir  to  deduct  the  tax  where  a  legacy  is  charged  on 
real  estate  makes  the  tax1  a  lien  and  enforceable  in  the  same  way  as  the 
legacy. 

§  5338.  Where  gift  of  property  for  a  limited  period  tax  is  to  be  appor- 
tioned by  the  court,  if  in  money  tax  is  required  to  be  deducted. 

§  5339.  Gives  power  of  sale  to  pay  the  tax  in  the  same  manner  as  to  pay 
debts. 


748  INHERITANCE  TAXATION 

§  5340.  Within  ten  days  after  the  filing  of  the  inventory  of  every  such, 
estate,  any  part  of  which  may  be  subject  to  a  tax  under  the  provisions  of  this 
subdivision  of  this  chapter,  the  judge  of  the  probate  court,  in  which  such 
inventory  is  filed,  shall  make  and  deliver  to  the  county  auditor  of  such  county 
a  copy  of  the  inventory;  or,  if  it  can  be  conveniently  separated,  a  copy  of  such 
part  of  the  estate,  with  the  appraisal  thereof.  The  auditor  shall  certify  the 
value  of  the  estate,  subject  to  taxation  hereunder  and  the  amount  of  taxes  due 
therefrom,  to  the  county  treasurer,  who  shall  collect  such  taxes,  and  there- 
upon place  twenty-five  per  cent  thereof  to  the  credit  of  the  county  expense 
fund,  and  pay  seventy-five  per  cent  thereof  into  the  state  treasury,  to  the 
credit  of  the  general  revenue  fund,  at  the  time  of  making  his  semi-annual 
settlement. 

§  5341.  When  any  of  the  real  estate  of  a  decedent  passes  to  another  person 
so  as  to  become  subject  to  such  tax,  the  executor,  administrator  or  trustee  of 
the  decedent  shall  inform  the  probate  judge  thereof  within  six  months  after  he 
has  assumed  the  duties  of  his  trust,  or  if  the  fact  is  not  known  to  him  within 
that  time,  then  within  one  month  from  the  time  that  it  does  become  known  to 
him. 

§  5342.  When  for  any  reason  the  devisee,  legatee  or  heir  who  has  paid  such 
tax  relinquishes  or  reconveys  a  portion  of  the  property  on  which  it  was  paid, 
or  it  is  judicially  determined  that  the  whole  or  part  of  such  tax  ought  not  to 
ha've  been  paid,  the  tax,  or  the  due  proportional  part  hereof  shall  be  repaid  to 
him  by  the  executor,  administrator  or  trustee. 

§  5343.  The  value  of  such  property,  subject  to  said  tax,  shall  be  its  actual 
market  value  as  found  by  the  probate  court.  If  the  state,  through  the  prosecut- 
ing attorney  of  the  proper  county,  or  any  person  interested  in  the  succession, 
to  the  property,  applies  to  the  court,  it  shall  appoint  three  disinterested 
persons,  who  being  first  sworn,  shall  view  and  appraise  such  property  at 
its  actual  market  value  for  the  purposes  of  this  tax,  and  make  return  thereof 
to  the  court.  The  return,  may  be  accepted  by  the  court  in  like  manner  as  the 
original  inventory  of  the  estate  is  accepted,  and  if  so  accepted,  it  shall  be 
binding  upon  the  person  by  whom  this  tax  is  to  be  paid,  and  upon  the  state. 
The  fees  of  the  appraisers  shall  be  fixed  by  the  probate  judge  and  paid  out  of 
the  county  treasury  upon  the  warrant  of  the  county  auditor.  In  case  of  an. 
annuity  or  life  estate,  the  value  thereof  shall  be  determined  by  the  so-called 
actuaries'  combined  experience  tables  and  five  per  cent  compound  interest. 

§  5344.  The  probate  court,  having  either  principal  or  auxiliary  jurisdiction 
of  the  settlement  of  the  estate  of  the  decedent,  shall  have  jurisdiction  to  hear 
and  determine  all  questions  in  relation  to  such  tax  that  arises,  affecting  any 
devise,  legacy  or  inheritance  under  this  subdivision  of  this  chapter,  subjeet  to 
appeal  as  in  other  cases,  and  the  prosecuting  attorney  shall  represent  the 
interests  of  the  state  in  such  proceedings. 

§  5345.  Each  probate  judge,  at  least  once  in  six  months,  shall  render  to  the 
county  auditor  a  statement  of  the  property  within  the  jurisdiction  of  his 
court  that  has  become  subjeet  to  such  tax  during  such  period,  the  number  and 
amount  of  such  taxes  as  will  accrue  during  the  next  six  months,  so  far  as  they 
can  be  determined  from  the  probate  records,  and  the  number  and  amount 
thereof  due  and  unpaid.  Each  probate  judge  shall  keep  a  separate  record,  in  a 
book  to  be  provided  for  that  purpose,  of  all  cases  arising  under  the  provisions 
of  this  subdivision  of  this  chapter. 

§  5346.  The  fees  of  officers  having  duties  to  perform  under  the  provisions  of 
this  subdivision  of  this  chapter,  shall  be  paid  by  the  county  from. the  county 
expense  fund  thereof  and  shall  be  the  same  as  allowed  by  law  for  similar 
services.  In  ascertaining  the  amounts  due  the  state,  seventy-five  per  cent  of 
the 'cost  of  collection  and  other  necessary  and  legitimate  expenses  incurred  by 
the  county  in  the  collection  of  such  taxes,  shall  be  charged  to  the  state  and 
deducted  from  the  amount  of  taxes  to  be  paid  into  the  state  treasury. 

§  5347.  A  final  settlement  of  the  account  of  an  executor,  administrator  or 
trustee  shall  not  be  accepted  or  allowed  by  the  probate  court  unless  it  shows, 
and  the  judge  of  that  court  finds,  that  all  taxes  imposed  by  the  'provisions  of 
this  subdivision  of  this  chapter,  upon  any  property  or  interest  therein, 


THE  STATE  STATUTES 


749 


belonging  to  the  estate  to  be  settled  by  such  account,  have  been  paid.     The 

receipt  of  the  county  treasurer  shall  be  the  proper  voucher  for  such  payment. 

§  5348.  The  word  "  property "  as  used  in  this  subdivision  of  this  chapter 

includes  real  and  personal  estate,  any  form  of  interest  therein,  and  annuities. 

OKLAHOMA 

Taxes  only  the  tangible  property  of  non-residents  within  the  state  including 
stocks  and  bonds  of  corporations. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OR  RELATIONSHIP 

Amount  of 
exemption 

Graded  rates 

Above 
exempt- 
tion  to 
$25,000 

$25,000 
to 
$50,000 

$50,000 
to 
$100,000 

In  excess 
of 
$100,000 

Father,  mother,  husband,  wife, 
child,  brother,  sister,  son-in-law, 
daughter-in-law,  adopted  or  mu- 
tually acknowledged  child,  lawful 
lineal  descendants. 

Widow,  $15,000; 
each     child, 
$10,000;      all 
others,  $5,000. 

1% 

2% 

3% 

4% 

All  others  except  for  religious, 
charitable  or  educational  pur- 
poses which  are  exempted. 

$2,500 

5% 

6% 

8% 

10% 

LAWS  OF  1915,  CHAPTER  162,  BECAME  A  LAW  MARCH  isth,  1915. 

Section  1.  Imposes  a  tax  on  all  transfers  by  will  or  the  intestate  laws  and 
by  deed,  grant,  bargain,  sale  or  gift  made  in  contemplation  of  death  or 
intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such  death, 
when  the  transferee  becomes  beneficially  entitled  in  possession  or  expectancy 
either  before  or  after  the  passage  of  the  act. 

§  2.  When  property  is  not  specifically  devised  it  is  deemed  transferred  pro- 
portionately among  all  the  general  legatees. 

§  3.  Whenever  any  person  or  corporation  shall  exercise  power  of  appoint- 
ment derived  from  any  disposition  of  property  made  either  before  or  after 
the  passage  of  this  act,  such  appointment  when  made  shall  be  deemed  a 
transfer  taxable  xinder  the  provisions  of  this  act  in  the  same  manner  as 
though  the  property  to  which  such  appointment  relates  belonged  absolutely  to 
the  donee  of  such  power,  and  had  been  transferred  to  such  donee  by  will. 

§  4.  That  this  act  shall  not  apply  to  transfers,  such  as  above  mentioned, 
made  in  good  faith  for  religious,  charitable  or  educational  purposes  and  uses. 
The  words  "tangible  property"  shall  mean  corporeal  property  such  as  real 
estate,  and  goods,  wares,  and  merchandise  and  shares  of  stock,  bonds,  indebt- 
edness of,  or  pecuniary  interest  in  the  property  of  any  domestic  or  foreign 
corporations,  associations,  joint  stock  companies  or  trusts  whose  ownership  is 
held  or  represented  by  shares  engaged  solely  in  interstate  commerce  or  busi- 
ness done  within  this  state,  and  that  proportion  of  the  value  of  the  property 
represented  by  the  stock,  bonds,  indebtedness  of,  or  pecuniary  interests  in  the 
property  of  any  domestic  or  foreign  corporations,  associations,  joint  stock 
companies,  or  trusts  whose  ownership  is  held  or  represented  by  shares  engaged 
in  interstate  or  intrastate  commerce,  plus  that  portion  of  such  business  done 
or  property  employed  in  this  state  in  interstate  commerce,  bears  to  the  total 
business  done,  or  property  employed ;  and  in  the  case  of  transportation  and 
transmission  companies  doing  interstate  as  well  as  intrastate  commerce  in 
this  state,  that  portion  of  the  value  of  the  stock,  bonds,  indebtedness  of  or 
pecuniary  interest  in  the  property  of  any  such  corporation  shall  be  deemed 
tangible,  as  the  sum  of  the  lines  in  this  state  bears  to  the  entire  extent  of  the 
lines  operated  by  the  corporation,  association,  joint  stock  companies,  or  trusts 


750  INHERITANCE  TAXATION 

whose  ownership  is  held  or  represented  by  shares,  the  same  being  deemed  to 
have  a  situs  in  this  state  for  the  purposes  of  this  act. 

§  5.  The  words  "  intangible  property "  as  used  herein  shall  be  taken  to 
mean  incorporeal  property,  other  than  that  named  as  tangible,  and  to  include 
bonds,  notes,  credit  and  evidence  of  debts  and  such  shares  of  stock  of  such 
corporations,  associations,  joint  stock  companies  or  trusts  whose  ownership 
is  held  or  represented  by  shares  as  is  not  to  be  deemed  tangible  and  such  por- 
tions of  such  shares  of  stock,  bonds,  indebtedness  of,  or  pecuniary  interest  in 
the  property  of  any  corporations,  associations,  joint  stock  companies,  or  trusts 
whose  ownership  is  held  or  represented  by  shares  as  are  not  to  be  deemed 
tangible. 

§§  6  and  7.  Fix  the  rates  and  exemptions  of  the  foregoing  table. 

§  8.  Every  such  tax  shall  be  paid  and  remain  a  lien  upon  the  property 
transferred  until  paid,  and  the  person  to  whom  the  property  is  so  trans- 
ferred, and  the  administrator,  executor,  and  trustees  of  every  estate  so  trans- 
ferred, shall  be  personally  liable  for  such  tax  until  its  payment ;  and  as  to 
transfers  of  stock,  bonds,  indebtedness  of,  or  pecuniary  interest  in  the  prop- 
erty of  any  herein,  declared  taxable  there  shall  be  a  lien  upon  the  property 
located  and  business  transacted  within  this  state  of  such  corporation,  prior  to 
all  other  liens,  and  unless  paid  by  such  transferee,  shall  be  enforced  against 
the  corporation.  When  paid  by  the  corporation  it  shall,  within  this  state, 
have  a  lien  therefor  upon  the  shares  of  stock,  bonds,  indebtedness  of  or 
pecuniary  interest  in  the  property  of  any  so  transferred  which  shall  be  supe- 
rior to  all  other  liens  thereon.  And  all  corporations,  associations,  joint  stock 
companies,  or  trusts  whose  ownership  is  held  or  represented  by  shares  which 
do  business  within  this  state  and  have  property  here  or  have  property  used  in 
this  state,  shall  keep  a  record  at  some  convenient  place  in  this  state  showing 
all  transfers  of  stocks,  shares,  indebtedness,  bonds  or  other  pecuniary  interest 
in  their  property  as  come  to  their  notice  at  any  time  and  shall  have  the  right 
before  paying  off  any  sum  attributable  to  such  share  of  stock,  bond,  indebted- 
ness or  pecuniary  interest  to  charge  to  the  same  and  recoup  itself  for  the 
sums  payable  in  that  behalf  by  such  company  hereunder.  The  tax  shall  be 
paid  to  the  state  treasurer,  who  shall  give,  and  every  executor,  administrator 
or  trustee  shall  take  duplicate  receipts  from  him  for  such  payments,  one  of 
which  he  shall  immediately  send  to  the  state  auditor,  whose  duty  it  shall  be 
to  charge  the  treasurer  so  receiving  the  tax,  with  the  amount  thereof,  and  to 
seal  said  receipt  -with  the  seal  of  his  office,  and  countersign  the  same  and 
return  it  to  the  executor,  administrator  or  trustee,  whereupon  it  shall  be  a 
proper  voucher  in  the  settlement  of  his  accounts ;  but  no  executor,  administra- 
tor or  trustee  shall  be  entitled  to  a  final  accounting  of  an  estate,  in  settlement 
of  which  a  tax  is  due  under  the  provisions  of  this  act,  unless  he  shall  produce 
a  receipt  so  sealed  and  countersigned  by  the  state  auditor  or  a  copy  thereof 
certified  by  him  (unless  a  bond  shall  have  been  filed  as  hereinafter  pre- 
scribed ) .  And  all  taxes  imposed  by  this  act  shall  be  due  and  payable  at  the 
time  of  the  transfer,  except  as  hereinafter  provided.  Taxes  upon  the  transfer 
of  any  estate,  property  or  interest  therein,  limited,  conditioned,  dependent  or 
determinable  upon  the  happenings  of  any  contingency  or  future  event,  by  reason 
of  which  the  fair  market  value  thereof  cannot  be  ascertained  at  the  time  of 
the  transfer,  as  herein  provided,  shall  accrue  and  become  due  and  payable 
when  the  beneficiaries  shall  come  into  actual  possession  or  enjoyment  thereof. 

§  9.  Imposes  interest  at  10  per  cent  from  time  the  tax  is  due  and  payable. 

§  10.  Requires  the  executor  or  administrator  to  deduct  the  tax  or  collect  it 
from  the  beneficiary,  to  whom  he  must  not  deliver  the  property  until  the  tax 
has  been  collected.  Requires  the  heir  to  deduct  the  tax  when  the  legacy  is 
charged  on  real  estate,  and  the  tax  may  be  enforced  against  it  in  the  same 
manner  as  the  legacy.  If  property  is  given  for  a  limited  period  the  executor 
must  apply  to  the  court  for  an  apportionment  of  the  tax  among  the  bene- 
ficiaries. 

§  11.  Makes  provision  for  a  proportionate  refund  where  debts  are  proved 
against  the  estate  after  distribution. 

§  12.  Taxes  bequests  to  executors  in  lieu  of  commissions  when  in  excess  of 
reasonable  compensation. 


THE  STATE  STATUTES 


751 


§  13.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  transfer 
any  property  taxable  under  this  act,  the  tax  shall  be  paid  to  the  state  treas- 
urer on  the  transfer  thereof.  No  safe  deposit  company,  bank,  or  other  institu- 
tion in  this  state,  or  person  or  persons  holding  securities  or  assets  of  a  decedent 
shall  deliver  or  transfer  the  same  to  the  executor,  administrator,  or  legal 
representatives  of  said  decedent,  or  upon  their  order  or  request,  unless  notice 
of  the  time  and  place  of  such  intended  transfer  be  served  upon  the  state  auditor 
at  least  ten  days  prior  to  the  said  transfer;  nor  shall  such  safe  deposit  com- 
pany, bank  or  other  institution,  person  or  persons  deliver  or  transfer  any 
securities  or  assets  of  the  estate  of  a  non-resident  decedent  without  retaining 
a  sufficient  portion  or  amount  thereof  to  pay  any  tax  which  may  thereafter 
be  assessed  on  account  of  the  transfer  of  such  securities  or  assets  under  the 
provisions  of  this  act,  unless  the  state  auditor  consents  thereto  in  writing; 
and  it  shall  be  lawful  for  the  state  treasurer  or  state  auditor  personally  or  by 
representative,  to  examine  said  securities  or  assets  at  the  time  of  such  delivery 
or  transfer.  Failure  to  serve  such  notice  or  to  allow  such  examination  or  to 
retain  a  sufficient  portion  of  the  amount  to  pay  such  tax  as  herein  provided, 
shall  render  such  safe  deposit  company,  trust  company,  bank  or  other  institu- 
tion, person  or  persons,  liable  to  the  payment  of  the  tax  due  upon  said  securi- 
ties or  assets  in  pursuance  of  the  provisions  of  this  act. 

§  14.  Gives  the  county  court  having  jurisdiction  of  the  estate  jurisdiction 
in  the  tax  proceedings. 

§§  15  to  28.  Provide  for  the  appointment  of  appraisers,  the  valuation  of  the 
estate,  appeal  and  collection  of  delinquent  taxes,  closely  following  the  New 
York  practice.  Life  estates  and  remainders  are  computed  by  the  commissioner 
of  insurance  on  mortality  tables  on  the  basis  of  5  per  cent. 

Prior  Statutes:  L.  1907-8,  ch.  81. 

OREGON 

Taxes  all  property  of  non-residents  within  the  state. 

TABLE  OF  RATES  AND  EXEMPTIONS  AS  PRESCRIBED  BY  CHAP.  372 
In  effect  after  May  21,  1917. 


Rates 

CLASS  OR  RELATIONSHIP 

Amount 
exempt 

$5,000 

$25,000 

$50,000 

$100,000 

$200,000 

$400,000 

In 

to 

to 

to 

to 

to 

to 

CX!1''  JP 

e 

$25,000 

$50,000 

$100,000 

$200,000 

$400,000 

$600,000 

$600,000 

Grandfather,  grandmother, 

$5,000 

1% 

H% 

2% 

21% 

3% 

31% 

4% 

father,  mother,  husband, 

wife,  child,  brother,  sis- 

ter, wife,  or  widow  of  a 

son,  or  the  husband  of  a 

daughter. 

In 

$1,000 

$5,000 

$10,000 

$25,000 

$50,000 

$100,000 

excess 

to 

to 

to 

to 

to 

to 

of 

$5,000 

$10,000 

$25,000 

$50,000 

$100,000 

$200,000 

$200,000 

Aunt,  uncle,  niece,  nephew 

SI,  000 

2% 

3% 

4% 

5% 

6% 

7% 

8% 

or  lineal  descendant  of 

the  same. 

In 

ISM 

$2,500 

$5,000 

$10,000 

$25,000 

$50,000 

$100,000 

excess 

to 

to 

to 

to 

to 

to 

to 

of 

$2,500 

$5,000 

$10,000 

$25,000 

$50.000 

$100,000 

$200,000 

$200,000 

All     other     cases     except 

$500 

3% 

4% 

5% 

6% 

7% 

8% 

9% 

10% 

exempt    charitable    cor- 

porations,  mentioned   in 

table   of  rates,   prior   to 

May  21  ,1917. 

752 


INHERITANCE  TAXATION 


TABLE  OF  HATES  AND  EXEMPTIONS,  PRIOR  TO  MAY  21,  1917 


CLASS  OB  RELATIONSHIP 

Amount  of 
exemption 

Rates 

Grandparents,  parents,  husband,  wife, 
child,  brother,  sister,  son-in-law, 
daughter-in-law,  adopted  or  mutually 
acknowledged  child,  lawful  lineal  de- 
scendants. 

$5,000  to  each; 
no  tax  where 
entire  estate 
is  less  than 
110,000. 

1%  on  all  above  $5,000. 

Aunt,  uncle,  niece,  nephew  and  their 
lineal  descendants. 

$2,000  to  each; 
no  tax  on  es- 
tates less  than 
$5,000. 

2%  on  all  above  $2,000. 

Benevolent,  charitable  or  benevolent  in- 
stitutions incorporated  within  the 
state  or  carrying  out  those  purposes 
within  the  State. 

All  exempt  

No  tax. 

On  all      $10,000 
up  to           to 
$10,000     $20,000 

$20,000   In  excess 
to              of 
$50,000     $50,000 

All  others  

If  less  than  $500 
to  each,  no  tax. 

3%            4% 

5%              6% 

LAWS  OF  1903,  PAGE  49,  AS  AMENDED  BY  LAWS  OF  1905,  CHAPTER 
178,  LAWS  PF  1909,  CHAPTERS  15  and  211,  LAWS  OF  1915,  CHAPTER 
42,  AND  CHAPTER  372,  LAWS  OF  1917. 

Section  1.  All  property  within  the  jurisdiction  of  the  state,  and  any  interest 
therein,  whether  belonging  to  the  inhabitants  of  this  state  or  not,  and  whether 
tangible  or  intangible,  which  shall  pass  by  will  or  by  statutes  of  inheritance  of 
this  or  any  other  state,  or  by  deed,  grant,  bargain,  sale,  or  gift,  made  in  con- 
templation of  the  death  of  the  grantor,  or  bargainer,  or  intended  to  take  effect 
in  possession  or  enjoyment  after  the  death  of  the  grantor,  bargainer,  or  donor, 
to  any  person  or  persons,  or  to  any  body  or  bodies,  politic  or  corporate,  in  trust 
or  otherwise,  or  by  reason  whereof  any  person,  or  body  politic  or  corporate, 
shall  become  beneficially  entitled,  in  possession  or  expectation,  to  any  property 
or  income  thereof,  shall  be  and  is  subject  to  a  tax  at  the  rate  hereinafter  speci- 
fied in  section  2  of  this  act,  to  be  paid  to  the  treasurer  of  the  state  for  the  use 
of  the  state;  and  all  heirs,  legatees,  and  devisees,  administrators,  executors, 
and  trustees,  and  any  such  grantee  under  a  conveyance,  and  any  such  donee 
under  a  gift,  made  during  the  grantor  or  donor's  life,  shall  be  respectively 
liable  for  any  and  all  such  taxes,  with  interest  thereon,  until  the  same  shall 
have  been  paid,  as  hereinafter  provided. 

The  rest  of  the  section  and  all  of  section  2  fix  the  rates  and  exemptions 
of  the  foregoing  tables. 

§  3.  All  taxes  imposed  by  this  act  shall  take  effect  at  and  accrue,  upon  the 
death  of  the  decedent,  or  donor,  and  shall  be  due  and  payable  at  the  expiration 
of  eight  months  from  such  death,  except  as  otherwise  provided  in  this  act ; 
provided,  hoicever,  that  taxes  upon  any  devise,  bequest,  legacy,  or  gift,  limited, 
conditioned,  dependent,  or  determinable  upon  the  happening  of  any  contingency 
or  future  event,  by  reason  of  which  the  full  and  true  value  thereof  can  not  be 
ascertained  at  or  before  the  time  when  the  taxes  become  due  and  payable  as 
aforesaid,  shall  accrue  and  become  due  and  payable  when  the  person  or  cor- 
poration beneficially  entitled  thereto  shall  come  into  actual  possession  or 
enjoyment  thereof. 

§  4.  Any  administrator,  executor,  or  trustee  having  in  charge,  or  in  trust, 
any  property  for  distribution,  embraced  in  or  belonging  to  any  inheritance, 
devise,  bequest,  legacy,  or  gift,  subject  to  the  tax  thereon  as  imposed  by  this 
act,  shall  deduct  the  tax  therefrom,  and  within  thirty  days  thereafter  he  shall 


THE  STATE  STATUTES  753 

pay  over  the  same  to  the  state  treasurer,  as  herein  provided.  If  such  prop- 
erty be  not  in  money,  he  shall  collect  the  tax  on  such  inheritance,  devise, 
bequest,  legacy,  or  gift,  upon  the  appraised  value  thereof  from  the  person 
entitled  thereto.  He  shall  not  deliver,  or  be  compelled  to  deliver,  any  property 
embraced  in  any  inheritance,  devise,  bequest,  legacy,  or  gift,  subject  to  tax 
under  this  act,  to  any  person  until  he  shall  have  collected  the  tax  thereon. 

§  5.  Provides  for  receipts  which  must  be  produced  on  final  settlement. 

§  6.  Every  tax  imposed  by  this  act  shall  be  a  lien  upon  the  property  em- 
braced in  any  inheritance,  devise,  bequest,  legacy  or  gift,  until  paid,  and  tha 
person  to  whom  such  property  is  transferred,  and  the  administrators,  execu- 
tors and  trustees  of  every  estate  embracing  such  property  shall  be  personally 
liable  for  such  tax  until  its  payment,  to  the  extent  of  the  value  of  such  prop- 
erty; provided,  however,  that  in  all  estates,  excepting  those  of  non-resident 
deceased,  all  inheritance  taxes  shall  be  sued  for  within  five  years  after  they 
have  become  due  and  legally  demandable,  otherwise  they  shall  be  conclusively 
presumed  to  be  paid  and  cease  to  be  a  lien  as  against  the  estate,  or  any  part 
thereof,  of  the  decedent;  provided,  further,  that  in  estates  of  non-resident 
deceased,  such  limitation  period  shall  not  apply  until  at  least  one.  year  shall 
have  elapsed  after  official  notice  of  the  death  of  said  non-resident  deceased, 
with  description  and  probable  value  of  the  estate,  shall  have  been  filed  with  the 
state  treasurer.  As  amended  by  ch.  42,  L.  1915. 

§  7.  Allows  a  discount  of  5  per  cent  if  tax  is  paid  within  eight  months. 
After  eight  months  8  per  cent  interest  charged  from  time  when  due,  except  in 
case  of  unavoidable  delay,  when  it  may  be  reduced  to  6  per  cent  until  cause  of 
delay  is  removed;  then  8  per  cent. 

§  8.  Gives  power  of  sale  to  pay  tax  in  the  same  way  as  to  pay  debts. 

§  9.  Requires  the  heir  to  deduct  the  tax  when  legacy  is  charged  on  real 
estate,  makes  tax  a  lien  and  enforceable  in  same  manner  as  a  legacy.  Where 
property  is  given  for  a  limited  period  must  apportion  tax  among  beneficiaries. 

§  10.  Provides  for  a  refund  of  taxes  erroneously  paid  when  application  is 
made  within  three  years  of  payment. 

§  11.  If  a  foreign  executor,  administrator,  or  trustee  shall  assign  or  trans- 
fer any  stock  or  obligations  in  this  state  standing  in  the  name  of  the  decedent, 
or  in  trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the 
state  treasurer  on  or  before  the  transfer  thereof,  and  no  such  assignment  or 
transfer  shall  be  valid  unless  such  tax  is  paid. 

§  12.  No  safe  deposit  company,  trust  company,  bank,  corporation,  or  other 
institution,  person  or  persons,  holding  securities  or  assets  of  a  decedent,  or  cor- 
poration in  which  said  decedent,  at  the  time  of  his  death,  owned  any  stock, 
shall  deliver  or  transfer  the  same  to  the  executors,  administrators,  or  legal  rep- 
resentatives of  said  decedent,  or  upon  their  order  or  request,  unless  notice  of 
the  said  time  and  place  of  such  intended  transfer  be  served  upon  the  state 
treasurer  in  writing  at  least  five  days  prior  to  the  said  transfer ;  and  it  shall 
be  lawful  for  the  said  state  treeasurer,  personally  or  by  representative,  to 
examine  said  securities  prior  to  the  time  of  such  delivery  or  transfer.  If  upon 
such  examination  the  state  treasurer,  or  his  said  representative,  shall,  for  any 
cause,  deem  it  advisable  that  such  securities  or  assets  should  not  be  imme- 
diately delivered  or  transferred,  he  may  forthwith  notify,  in  writing,  such 
company,  bank,  institution,  or  person  to  defer  delivery  or  transfer  thereof  for 
a  period  not  to  exceed  ten  days  from  the  date  of  such  notice,  and  thereupon  it 
shall  be  the  duty  of  the  party  notified  to  defer  such  delivery  until  the  time 
stated  in  such  notice,  or  until  the  revocation  thereof  within  such  ten  days; 
failure  to  serve  the  notice  first  above-mentioned  or  allow  such  examination,  or 
to  defer  the  delivery  of  such  securities  or  assets  for  the  time  stated  in  the 
second  of  said  notices,  shall  render  said  safe  deposit  company,  trust  company, 
corporation,  bank,  or  other  institution,  person  or  persons,  liable  to  the  pay- 
ment of  the  tax  due  on  said  securities  or  assets,  pursuant  to  the  provisions  of 
this  act. 

§  13.  Provides  that  remaindermen  may  defer  payment  of  tax  until  they 
receive  the  property  by  filing  a  bond  with  sworn  inventory  within  six  months 
in  three  times  the  amount  of  the  tax  and  renewing  it  every  five  years. 

§  14.  Gives  the  county  court  granting  letters  jurisdiction  in  tax  proceedings. 


754 


INHERITANCE  TAXATION 


§§  16  to  37.  Make  the  usual  provisions  for  inventory,  appraisal,  appeal, 
reports  and  collection  of  delinquent  taxes,  the  compromise  of  uncertain  tax 
claims,  and  the  valuation  of  life  estates  and  remainders,  using  combined  expe- 
rience tables  on  the  4  per  cent  basis. 

§  38.  Except  as  to  real  property  located  outside  of  the  state  passing  in  fee 
from  the  decedent  owner,  the  tax  imposed  under  section  2  shall  hereafter  be 
assessed  against  and  be  collected  from  property  of  every  kind,  which,  at  the 
death  of  the  decedent  owner,  is  subject  to,  or  thereafter,  for  the  purpose  of 
distribution,  is  brought  into  this  state  and  becomes  subject  to  the  jurisdiction 
of  the  courts  of  this  state  for  distributive  purposes,  or  which  was  owned  by  any 
decedent  domiciled  within  the  state  at  the  time  of  the  death  of  such  decedent, 
even  though  the  property  of  said  decedent  so  domiciled  was  situated  outside  of 
the  state. 

§  39.  In  case  of  any  property  belonging  to  a  foreign  estate,  which  estate  in 
whole  or  in  part  is  liable  to  pay  an  inheritance  tax  in  this  state,  the  said  tax 
shall  be  assessed  upon  the  market  value  of  said  property  remaining  after  the 
payment  of  such  debts  and  expenses  as  are  chargeable  to  the  property  under 
the  laws  of  this  state.  In  the  event  that  the  executor,  administrator,  or  trus- 
tee of  such  foreign  estates  files  with  the.  clerk  of  the  court  having  ancillary 
jurisdiction,  and  with  the  state  treasurer,  duly  certified  statements  exhibiting 
the  true  market  value  Of  the  entire  estate  of  the  decedent  owner,  and  the  indebt- 
edness for  which  the  said  estate  has  been  adjudged  liable,  which  statements 
shall  be  duly  attested  by  the  judge  of  the  court  having  original  jurisdiction, 
the  beneficiaries  of  said  estate  shall  then  be  entitled  to  have  deducted  such  pro- 
portion of  the  said  indebtedness  of  the  decedent  from  the  value  of  the  property 
as  the  value  of  the  property  within  this  state  bears  to  the  value  of  the  entire 
estate. 

§§  40,  41,  42  and  43.  Provide  for  the  compensation  of  officers,  impose  a 
penalty  for  accepting  a  fee  or  reward,  and  repeal  all  inconsistent  statutes. 

Prior  statutes:  None  prior  to  1903. 


PENNSYLVANIA 

Taxed  collaterals  and  strangers  only  prior  to  1917. 

Taxed  property  of  non-residents  within  the  state  en  transfers  to  collaterals 
and  strangers  prior  to  1917;  but  by  construction  of  the  court  this  is  confined 
to  tangibles. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OR 

RELATIONSHIP 

Amount  exempt 

Rates 

Father,  mother,  wife,  children, 

All          

No  tax. 

widow  of  a  son. 

All  others  

If  less  than  $250. 

5%  on  all. 

LAWS  OF  1887,  CHAPTER  37. 

Section  1.  Be  it  enacted,  etc.,  that  all  estates,  real,  personal  and  mixed,  of 
every  kind  whatsoever,  situated  within  this  state,  whether  the  person  or  per- 
sons dying  seized  thereof  be  domiciled  within  or  out  of  this  state,  and  all  such 
estates  situated  in  another  state,  territory  or  country,  when  the  person,  or  per- 
sons, dying  seized  thereof,  shall  have  their  domicile  within  this  commonwealth, 
passing  from  any  person,  who  may  die  seized  or  possessed  of  such  estates, 
either  by  will,  or  under  the  intestate  laws  of  this  state,  or  any  part  of  such 
estate,  or  estates,  or  interest  therein,  transferred  by  deed,  grant,  bargain,  or 
sale,  made  or  intended  to  take  effect,  in  possession  or  enjoyment  after  the  death 
of  the  grantor,  or  bargainer  to  any  person  or  persons,  or  to  bodies  corporate 
or  politic,  in  trust  or  otherwise,  other  than  to  or  for  the  use  of  father,  mother, 
husband,  wife,  children  and  lineal  descendants  born  in  lawful  wedlock,  or  the 


THE  STATE  STATUTES  755 

wife,  or  widow  of  the  son  of  the  person  dying  seized  or  possessed  thereof,  shall 
be  and  they  are  hereby  made  subject  to  a  tax  of  five  dollars  on  every  hundred 
dollars  of  the  clear  value  of  such  estate  or  estates,  and  at  and  after  the  same 
rate  for  any  less  amount,  to  be  paid  to  the  use  of  the  commonwealth;  and  all 
owners  of  such  estates,  and  all  executors  and  administrators  and  their  sureties, 
shall  only  be  discharged  from  liability  for  the  amount  of  such  taxes  or  duties, 
the  settlement  of  which  they  may  be  charged  with,  by  having  paid  the  same  over 
for  the  use  aforesaid,  as  hereinafter  directed ;  provided,  that  no  estate  which 
may  be  valued  at  less  than  two  hundred  and  fifty  dollars  shall  be  subject  to  the 
duty  or  tax. 

§  2.  Taxes  bequests  to  executors  in  lieu  of  commissions  in  excess  of  reason- 
able compensation. 

§  3.  In  all  case  where  there  has  been  or  shall  be  a  devise,  descent  or 
bequest  to.  collateral  relatives  or  strangers,  liable  to  the  collateral  inheritance 
tax,  to  take  effect  in  possession,  or  to  come  into  actual  enjoyment  after  the 
expiration  of  one  or  more  life  estates,  or  a  period  of  years,  the  tax  on  such 
estate  shall  not  be  payable,  nor  interest  begin  to  run  thereon,  until  the  per- 
son or  persons  liable  for  the  same  shall  come  into  actual  possession  of  such 
estate,  by  the  termination  of  the  estates  for  life  or  years,  and  the  tax  shall 
be  assessed  upon  the  value  of  the  estate  at  the  time  the  right  of  possession 
accrues  to  the  owner  as  aforesaid;  provided,  that  the  owner  shall  have  the 
right  to  pay  the  tax  at  any  time  prior  to  hia  coming  into  possession,  and  in 
such  cases,  the  tax  shall  be  assessed  on  the  value  of  the  estate  at  the  time  of 
the  payment  of  the  tax,  after  deducting  the  value  of  the  life  estate  or  estates 
for  years;  and  provided  further,  that  the  tax  on  real  estate  shall  remain  a 
lien  on  the  real  estate  on  which  the  same  is  chargeable  until  paid.  And  the 
owner  of  any  personal  estate  shall  make  a  full  return  of  the  same  to  the 
register  of  wills  of  the  proper  county  within  one  year  from  the  death  of  the 
decedent,  and  within  that  time  enter  into  security  for  the  payment  of  the  tax 
to  the  satisfaction  of  such  register;  and  in  case  of  failure  so  to  do  the  tax  shall 
be  immediately  payable  and  collectible. 

§  4.  If  the  collateral  inheritance  tax  shall  be  paid  within  three  months  after 
the  death  of  the  decedent,  a  discount  of  5  per  centum  shall  be  made  and 
allowed,  and  if  the  said  tax  is  not  paid  at  the  end  of  one  year  from  the  death 
of  the  decedent,  interest  shall  then  be  charged  at  the  rate  of  12  per  centum 
per  annum  on  such  tax ;  but  where  from  claims  made  upon  the  estate,  litiga- 
tion, or  other  unavoidable  cause  of  delay,  the  estate  of  any  decedent  or  a  part 
thereof  cannot  be  settled  up  at  the  end  of  the  year  from  his  or  her  decease, 
6  per  centum  per  annum  shall  be  charged  upon  the  collateral  inheritance  tax, 
arising  from  the  unsettled  part  thereof,  from  the  end  of  such  year  until  there 
be  default;  provided,  further,  that  where  real  or  personal  estate  withheld  by 
reason  of  litigation  or  other  cause  of  delay  in  manner  aforesaid  from  the 
parties  entitled  thereto,  subject  to  said  tax,  has  not  been,  or  shall  not  be 
productive  to  the  extent  of  6  per  centum  per  annum,  they  shall  not  be  com- 
pelled to  pay  a  greater  amount  as  interest  to  the  commonwealth  than  they 
may  have  realized,  or  shall  realize  from  such  estate  during  the  time  the  same 
has  been  or  shall  be  withheld  as  aforesaid. 

§  5.  Requires  the  executor  or  administrator  to  deduct  the  tax  if  in  money; 
if  in  property  to  collect  from  beneficiary,  and  gives  power  of  sale  in  case  of 
neglect  or  refusal;  must  not  deliver  property  until  the  tax  has  been  paid. 

§  6.  If  the  legacy  subject  to  collateral  inheritance  tax  be  given  to  any  per- 
son for  life,  or  for  a  term  of  years,  or  for  any  other  limited  period,  upon  a 
condition  or  contingency,  if  the  same  be  money,  the  tax  thereon  shall  be 
retained  upon  the  whole  amount;  but  if  not  money,  application  shall  be  made 
to  the  orphan's  court  having  jurisdiction  of  the  accounts  of  the  executors  or 
administrators  to  make  apportionment,  if  the  case  requires  it,  of  the  sum  to  be 
paid  by  such  legatees,  and  for  such  further  order  relative  thereto  as  equity 
shall  require. 

§  7.  Requires  the  heir  to  deduct  the  tax  where  legacy  is  charged  on  real 
estate,  makes  it  a  lien,  and  payment  may  be  enforced  in  same  manner  as  pay- 
ment of  a  legacy. 


756  INHERITANCE  TAXATION 

§  8.  Whenever  any  real  estate  of  which  any  decedent  may  die  seized  shall  be 
subject  to  the  collateral  inheritance  tax,  it  shall  be  the  duty  of  executors  and 
administrators  to  give  information  thereof  to  the  register  of  the  county,  where 
administration  has  been  granted,  within  six  months  after  they  undertake  the 
execution  of  their  respective  duties,  or  if  the  fact  be  not  known  to  them  within 
that  period,  within  one  month  after  the  same  shall  have  come  to  their  knowl- 
edge, and  it  shall  be  the  duty  of  the  owners  of  such  estate,  immediately  upon 
the  vesting  of  the  estate,  to  give  information  thereof  to  the  register  having 
jurisdiction  of  the  granting  of  administration. 

§  9.  It  shall  be  the  duty  of  any  executor  or  administrator,  on  the  payment 
of  collateral  inheritance  tax,  to  take  duplicate  receipts  from  the  register,  one 
of  which  shall  be  forwarded  forthwith  to  the  auditor  general,  whose  duty  it 
shall  be  to  charge  the  register  receiving  the  money  with  the  amount,  and  seal 
with  the  seal  of  his  office,  and  countersign  the  receipt  and  transmit  it  to  the 
executor  or  administrator,  whereupon  it  shall  be  a  proper  voucher  in  the  settle- 
ment" of  the  estate;  but  in  no  event  shall  an  executor  or  administrator  be 
entitled  to  a  credit  in  his  account  by  the  register,  unless  the  receipt  is  so  sealed 
and  countersigned  by  the  auditor  general. 

§  10.  Whenever  any  foreign  executor,  or  administrator,  or  trustee,  shall 
assign  or  transfer  any  stocks  or  loans  in  this  commonwealth,  standing  in  the 
name  of  the  decedent,  or  in  trust  for  a  decedent,  which  shall  be  liable  for  the 
collateral  inheritance  tax,  such  tax  shall  be  paid,  on  the  transfer  thereof,  to 
the  register  of  the  county  where  such  transfer  is  made ;  otherwise  the  corpora- 
tion permitting  such  transfer  shall  become  liable  to  pay  such  tax. 

§  11.  Whenever  debts  shall  be  proven  against  the  estate  of  a  decedent,  after 
distribution  of  legacies  from  which  the  collateral  inheritance  tax  has  been  de- 
ducted, in  compliance  with  this  act,  and  the  legatee  is  required  to  refund  any 
portion  of  a  legacy,  a  portion  of  the  said  tax  shall  be  repaid  to  him  by  the 
executor  or  administrator,  if  the  said  tax  has  not  been  paid  into  the  state  or 
county  treasury,  or  by  the  county  treasurer,  if  it  has  been  so  paid. 

§  12.  It  shall  be  the  duty  of  the  register  of  wills  of  the  county,  in  which 
letters  testamentary,  or  of  administration  are  granted,  to  appoint  an  appraiser 
as  often  as  and  whenever  occasion  may  require  to  fix  the  valuation  of  estates 
which  are,  or  shall  be,  subject  to  collateral  inheritance  tax,  and  it  shall  be  the 
duty  of  such  appraiser  to  make  a  fair  and  conscionable  appraisement  of  such 
estates,  and  it  shall  further  be  the  duty  of  such  appraiser  to  assess  and  fix  the 
cash  value  of  all  annuities  and  life  estates  growing  out  of  said  estates,  upon 
which  annuities  and  life  estates  the  collateral  inheritance  tax  shall  be  imme- 
diately payable  out  of  the  estate  at  the  rate  of  such  valuation :  provided,  that 
any  person  or  persons  not  satisfied  with  said  appraisement  shall  have  the 
right  to  appeal,  within  thirty  days,  to  the  orphans'  court  of  the  proper  county 
or  city,  on  paying,  or  giving  security  to  pay,  all  costs,  together  with  whatever 
tax  shall  be  fixed  by  said  court,  and  upon  such  appeal  said  courts  shall  have 
jurisdiction  to  determine  all  questions  of  valuation,  and  of  the  liability  of  the 
appraised  estate  for  such  tax,  subject  to  the  right  of  appeal  to  the  supreme 
court  as  in  other  cases. 

§  13.  It  shall  be  a  misdemeanor  in  any  appraiser,  appointed  by  the  register 
to  make  any  appraisement  in  behalf  of  the  commonwealth,  to  take  any  fee  or 
reward  from  any  executor  or  administrator,  legatee,  next  of  kin,  or  heir  of  any 
decedent,  and  for  any  such  offense  the  register  shall  dismiss  him  from  such 
service,  and  upon  conviction  in  the  quarter  sessions,  he  shall  be  fined  not 
exceeding  five  hundred  dollars,  and  imprisoned  not  exceeding  one  year,  or  both, 
or  either,  at  the  discretion  of  the  court. 

§  14.  It  shall  be  the  duty  of  the  register  of  wills  to  enter  in  a  book,  to  be 
provided  at  the  expense  of  the  commonwealth,  to  be  kept  for  that  purpose,  and 
which  shall  be  a  public  record,  the  returns  made  by  all  appraisers  under  this 
act,  opening  an  account  in  favor  of  the  commonwealth  against  the  decedent's 
estate,  and  the  register  may  give  a  certificate  of  payment  of  such  tax  from 
said  record;  and  it  shall  be  the  duty  of  the  register  to  transmit  to  the  auditor 
general,  on  the  first  day  of  each  month,  a  statement  of  all  returns  made  by 
appraisers  during  the  preceding  month,  upon  which  the  taxes  remain  unpaid 
which  statement  shall  be  entered  by  the  auditor  general  in  a  book  to  be  kept  by 


THE  STATE  STATUTES  757 

him  for  that  purpose.  And  whenever  any  such  tax  shall  have  remained  due 
and  unpaid  for  one  year,  it  shall  be  lawful  for  the  register  to  apply  to  the 
orphans'  court,  by  bill  or  petition,  to  enforce  the  payment  of  the  same;  where- 
upon said  court,  having  caused  due  notice  to  be  given  to  the  owner  of  the  real 
estate  charged  with  the  tax,  and  to  such  other  persons  as  may  be  interested, 
shall  proceed,  according  to  equity,  to  make  such  decrees,  or  orders,  for  the 
payment  of  the  said  tax,  out  of  such  real  estate,  as  shall  be  just  and  proper. 

§  15.  If  the  register  shall  discover  that  any  collateral  inheritance  tax  has 
not  been  paid  over,  according  to  law,  the  orphans'  court  shall  be  authorized  to 
cite  the  executors  or  administrators  of  the  decedent,  whose  estate  is  subject  to 
the  tax,  to  file  an  account  or  to  issue  a  citation  to  the  executors,  administra- 
tors, or  heirs,  citing  them  to  appear  on  a  certain  day  and  show  cause  why  the 
said  tax  should  not  be  paid;  and  when  personal  service  cannot  be  had,  notice 
shall  be  given  for  four  weeks,  once  a  week,  in  at  least  one  newspaper  pub- 
lished in  said  county;  and  if  the  said  tax  shall  be  found  to  be  due  and  unpaid, 
the  said  delinquent  shall  pay  said  tax  and  costs.  And  it  shall  be  the  duty  of 
the  register,  or  the  auditor  general,  to  employ  an  attorney,  of  the  proper 
county,  to  sue  for  the  recovery  and  amount  of  such  tax,  and  the  auditor- 
general  is  authorized  and  empowered,  in  settlement  of  accounts  of  any 
register,  to  allow  him  costs  of  advertising  and  other  reasonable  fees  and 
expenses  incurred  in  the  collection  of  tax. 

§  16.  The  registers  of  wills,  of  the  several  counties  of  this  commonwealth, 
upon  their  filing  with  the  auditor-general  the  bond  hereinafter  required 
shall  be  the  agents  of  the  commonwealth  for  the  collection  of  the  collateral 
inheritance  tax;  and  for  services  rendered  in  collecting  and  paying  over  the 
same,  the  said  agents  shall  be  allowed  to  retain,  for  their  own  use,  such  per- 
centage as  may  be  allowed  by  the  auditor-general,  not  exceeding  five  per 
centum  on  all  taxes  paid  and  accounted  for:  Provided,  That  this  section 
shall  not  apply  to  the  fees  of  registers  elected  prior  to  the  passage  of  this 
act. 

§  17.  The  said  register  shall  give  bond  to  the  commonwealth  in  such  penal 
sum  as  the  orphans'  court  of  the  county  may  direct  with  two  or  more  suffi- 
cient sureties  for  the  faithful  performance  of  the  duties  hereby  imposed,  and 
for  the  regular  accounting  and  paying  over  of  the  amounts  to  be  collected 
and  received,  and  said  bond,  on  its  execution  and  approval,  by  the  said 
orphans'  court,  to  be  forwarded  to  the  auditor-general. 

§  18.  Until  bond  and  security  be  given,  as  required  by  the  preceding  section, 
the  said  collateral  inheritance  tax  shall  be  received  and  collected  by  the 
eounty  treasurer  as  heretofore,  and  in  such  cases  all  the  provisions  of  this 
act,  relating  to  collection  and  payment  by  registers,  shall  apply  to  the  county 
treasurer. 

§  19.  It  shall  be  the  duty  of  the  register  of  wills,  of  each  county,  to  make 
returns  and  payment  to  the  state  treasurer  of  all  the  collateral  inheritance 
taxes  he  shall  have  received,  stating  for  what  estate  paid,  on  the  first  Mon- 
days of  April,  July,  October  and  January,  in  each  year;  and  for  all  taxes 
collected  by  him  and  not  paid  over  within  one  month,  after  his  quarterly 
return  of  the  same,  he  shall  pay  interest  at  the  rate  of  twelve  per  centum 
per  annum  until  paid. 

§  20.  The  lien  of  the  collateral  inheritance  tax  shall  continue  until  the  said 
tax  is  settled  and  satisfied:  Provided,  That  the  said  lien  shall  be  limited 
to  the  property  chargeable  therewith:  and  provided  further,  That  all  col- 
lateral inheritance  taxes  shall  be  sued  for  within  five  years  after  they  are 
due  and  legally  demandable,  otherwise  they  shall  be  presumed  to  have  been 
paid,  and  cease  to  be  a  lien  as  against  any  purchasers  of  real  estate:  and 
provided  further,  That  all  taxes  due  and  legally  demandable  at  the  date  of 
the  passage  of  this  act,  the  collection  of  which  would  be  barred  by  the  pro- 
visions hereof,  shall  not  be  barred  if  suit  shall  be  brought  therefor  within 
one  year  from  the  date  of  the  passage  of  this  act. 

§  21.  All  laws,  or  parts  of  laws,  heretofore  approved,  relating  to  the  collec- 
tion of  the  collateral  inheritance  tax,  and  inconsistent  herewith,  be  and  the 
same  are  hereby  repealed. 

Note. — The  law  has  remained  substantially  without  change  for  half  a 
century  until  the  statute  of  1917. 


758  INHERITANCE  TAXATION 

THE)  STATUTE  OF  1917. 

July  11,  1917,  the  governor  approved  the  following  new  inheritance  tax 
statute: 

An  Act  for  the  imposition  and  collection  of  certain  inheritance  taxes. 

Section  1.  Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  Commonwealth  of  Pennsylvania  in  General  Assembly  met  and  it  is 
hereby  enacted  by  the  authority  of  the  same  That  all  estates  real,  personal 
and  mixed  of  every  kind  whatsoever  situated  within  this  Commonwealth 
whether  the  person  dying  seized  thereof  be  domiciled  within  or  without  this 
Commonwealth  and  all  such  estates  situated  in  another  State,  territory  or 
country  when  the  person  dying  seized  thereof  shall  have  his  domicile  within 
this  Commonwealth  passing  from  any  person  who  may  die  seized  or  possessed 
of  such  estates  either  by  will  or  under  the  intestate  laws  of  this  Common- 
wealth or  any  part  of  such  estates  or  interests  therein  transferred  by  deed, 
grant,  bargain,  or  sale  made  or  intended  to  take  effect  in  possession  or  enjoy- 
ment after  the  death  of  the  grantor  or  bargainor  to  or  for  the  use  of  father, 
mother,  husband,  wife,  children,  lineal  descendants  born  in  lawful  wedlock, 
children  of  a  former  husband  or  wife,  or  the  wife  or  widow  of  the  son  of  a 
person  dying  seized  or  possessed  thereof  or  to  legally  adopted  children  are 
hereby  made  subject  to  a  tax  of  two  ($2)  dollars  on  every  hundred  dollars 
of  the  clear  value  of  such  estates  and  at  the  same  rate  for  any  less  amount 
to  be  paid  for  the  use  of  the  Commonwealth. 

The  tax  hereinbefore  provided  is  also  imposed  on  any  estate  passing  from 
the  mother  of  an  illegitimate  child  or  from  any  person  of  whom  the  mother 
is  a  lineal  descendant  to  such  illegitimate  child,  his  wife  or  widow.  Such 
tax  also  applies  to  any  estate  passing  from  an  illegitimate  child  to  his 
mother. 

§  2.  The  register  of  wills  of  the  county  in  which  letters  testamentary  or 
of  administration  are  granted  shall  appoint  an  appraiser  whenever  occasion 
may  require  to  fix  the  value  of  the  estates  hereinbefore  subjected  to  tax. 
Such  appraiser  shall  make  a  fair  conscionable  appraisement  of  such  estates 
and  assess  and  fix  the  cash  value  of  all  annuities  and  life  estates  growing 
out  of  said  estates  upon  which  annuities  and  life  estates,  the  tax  imposed  by 
this  act  shall  be  immediately  payable  out  of  the  estate  at  the  rate  of  such 
valuation. 

§  3.  The  compensation  of  such  appraisers  shall  be  as  follows,  namely: 
For  each  day  during  which  an  appraiser  shall  actually  be  engaged  in  making 
appraisements  of  property  subject  to  the  tax  he  shall  receive  the  sum  of  five 
dollars.  If  it  shall  be  necessary  for  the  appraiser  to  travel  from  his  place 
of  residence  to  appraise  property  subject  to  the  tax  he  shall  be  allowed  such 
actual  necessary  traveling  expenses  as  he  may  incur,  which  expenses  shall 
be  itemized  in  a  sworn  statement  to  be  returned  to  the  register  and  subject 
to  the  final  approval  of  the  auditor-general. 

§  4.  Whenever  because  of  the  complicated  nature  of  an  estate  subject  to 
the  payment  of  such  tax  the  interest  of  the  Commonwealth  shall  require  the 
appointment  as  appraiser  of  such  estate  of  a  person  possessed  of  expert  or 
technical  knowledge  to  ascertain  the  value  thereof;  reasonable  additional 
compensation  shall  be  allowed  such  appraiser  for  the  exercise  of  such  expert 
or  technical  knowledge.  In  case  where  after  the  appointment  of  an  appraiser 
it  shall  appear  that  the  proper  appraisement  of  said  estate  will  require  the 
services  of  a  person  possessed  of  expert  or  technical  knowledge,  whereof  the 
appraiser  appointed  is  not  possessed,  the  appraiser  may  employ  the  services 
of  a  person  possessed  of  expert  or  technical  knowledge  to  assist  him  in  the 
appraisement,  and  for  such  services  the  person  so  employed  shall  receive 
reasonable  compensation.  In  all  such  cases  the  register  of  wills  appointing 
the  appraiser  shall  certify  to  the  auditor-general  that  there  is  an  actual 
necessity  for  the  appointment  of  an  appraiser  possessed  of  expert  or  techni- 
cal knowledge  or  that  the  appraiser  already  appointed  to  appraise  the  estate 
in  question  should  be  assisted  by  a  person  possessed  of  such  knowledge.  No 
person  shall  be  appointed  as  such  expert  appraiser  or  as  expert  assistant  to 
the  appraiser  until  the  approval  of  the  auditor-general  of  said  appointment 
is  first  obtained,  nor  shall  any  payment  be  made  to  any  appraiser  or  to  any 


THE  STATE  STATUTES  759 

person  employed  by  him  under  this  section  until  an  itemized  statement  of 
the  services  performed  and  the  compensation  recommended  shall  have  been 
rendered  under  oath  or  affirmation  to  the  auditor-general  for  his  approval 
and  shall  have  received  the  same.  No  clerk  or  other  person  employed  in  the 
office  of  a  register  of  wills  shall  be  appointed  as  an  expert  appraiser  of  an 
estate  subject  to  the  payment  of  such  tax  nor  as  an  expert  to  assist  the 
appraiser  of  such  estate. 

§  5.  It  shall  be  a  misdemeanor  for  an  appraiser  to  take  any  fee  or  reward 
from  any  executor  or  administrator,  legatee,  lineal  descendent,  or  heir  of 
any  decedent,  and  for  any  such  offense  the  register  shall  dismiss  him  from 
such  service.  Upon  conviction  of  such  misdemeanor  such  appraiser  shall  be 
fined  not  exceeding  five  hundred  dollars  or  imprisoned  not  exceeding  one 
year  or  both. 

§  6.  Any  person  not  satisfied  with  any  appraisement  may  appeal  within 
thirty  days  to  the  orphans'  court  on  paying  or  giving  security  to  pay  all 
costs,  together  with  whatever  tax  shall  be  fixed  by  the  court.  Upon  such 
appeal  the  court  may  determine  all  questions  of  valuation  and  of  the  lia- 
bility of  the  appraised  estate  for  such  tax  subject  to  the  right  of  appeal  to 
the  supreme  or  superior  court. 

§  7.  The  register  of  wills  shall  enter  in  a  book  to  be  provided  at  the  expense 
of  the  commonwealth,  which  shall  be  a  public  record,  the  returns  made  by 
all  appraisers  under  the  provisions  of  this  act  opening  an  account  in  favor 
of  the  commonwealth  against  each  decedent's  estate.  The  register  may 
give  certificates  of  payment  of  such  tax  from  such  record.  The  register  shall 
transmit  to  the  auditor-general  on  the  first  day  of  each  month  a  statement 
of  all  returns  made  by  appraisers  during  the  preceding  month  upon  which 
the  taxes  have  been  paid  or  remain  unpaid,  which  statement  shall  be  entered 
by  the  auditor-general  in  a  book  to  be  kept  for  that  purpose.  Whenever  any 
such  tax  shall  have  remained  due  and  unpaid  for  one  year  the  register  may 
apply  to  the  orphans'  court  by  bill  or  petition  to  enforce  the  payment  of 
the  same,  whereupon  the  court  having  caused  notice  to  be  given  to  the  owner 
of  the  real  estate  charged  with  the  tax  and  to  such  other  person  as  may  be 
interested  shall  proceed  according  to  equity  to  make  such  decree  or  orders 
for  the  payment  of  the  tax  out  of  such  real  estate  as  shall  be  just  and  proper. 

§  8.  If  t*he  register  shall  discover  that  any  tax  imposed  by  this  act  has 
not  been  paid  the  orphans'  court  may  cite  the  executors  or  administrators 
of  the  decedent  whose  estate  is  subject  to  the  tax  to  file  an  account  or  to 
appear  on  a  certain  day  and  show  cause  why  the  tax  should  not  be  paid. 
When  personal  service  cannot  be  had  notice  shall  be  given  for  four  weeks, 
once  a  week  in  at  least  one  newspaper  published  in  the  county  and  in  the 
legal  periodical  designated  by  the  rules  of  court  of  the  county  for  the  pub- 
lication of  legal  notices.  If  the  tax  shall  be  found  to  be  due  the  delinquent 
shall  pay  the  tax  and  costs.  The  auditor-general  is  authorized  to  employ 
an  attorney  of  the  county  to  sue  for  the  recovery  of  the  amount  of  such  tax. 
The  auditor-general  is  authorized  to  employ  a  resident  attorney  in  all  coun- 
ties having  a  population  of  one  hundred  thousand  and  less  than  five  hundred 
thousand  and  in  counties  having  a  population  of  five  hundred  thousand  and 
more,  such  additional  resident  attorneys  as  may  be  necessary  to  protect  the 
commonwealth's  interests  in  all  matters  relating  to  enforcing  the  pro- 
visions of  this  act.  Said  resident  attorney  or  attorneys  shall  be  allowed  such 
reasonable  compensation  as  may  be  fixed  by  the  auditor-general,  which  shall 
be  paid"  from  the  moneys  realized  from  such  taxes.  The  auditor-general  in 
the  settlement  of  accounts  of  any  register  may  allow  him  costs  of  advertising 
and  other  reasonable  fees  and  expenses  incurred  in  the  collection  of  the  tax. 

§  9.  Where  there  is  a  devise,  descent,  or  bequest  liable  to  the  tax  herein- 
before imposed,  which  devise,  descent,  or  bequest  is  to  take  effect  in  posses- 
sion or  to  come  into  actual  enjoyment  after  the  expiration  of  one  or  more 
life  estates  or  a  period  of  years,  the  tax  on  such  estate  shall  not  be  payable 
nor  shall  interest  begin  to  run  thereon  until  the  person  liable  for  the  same 
shall  come  into  actual  possession  of  such  estate  by  the  termination  of  the 
estates  for  life  or  years.  The  tax  shall  be  assessed  upon  the  value  of  the 
estate  at  the  time  the  right  of  possession  accrues  to  the  owner,  but  the  owner 


760  INHERITANCE  TAXATION 

may  pay  the  tax  at  any  time  prior  to  his  coming  into  possession.  In.  such 
cases  the  tax  shall  be  assessed  on  the  value  of  the  estate  at  the  time  of  the 
payment  of  the  tax  after  deducting  the  value  of  the  life  estate  or  estates 
for  years.  The  tax  on  real  estate  shall  remain  a  lien  on  the  real  estate  on 
which  the  same  is  chargeable  until  paid.  The  owner  of  any  personal  estate 
shall  make  a  full  return  of  the  same  to  the  register  of  wills  within  one  year 
from  the  death  of  the  decedent  and  within  that  time  enter  into  security  for 
the  payment  of  the  tax  to  the  satisfaction  of  such  register.  In  case  of  failure 
so  to  do  the  tax  shall  be  immediately  payable. 

§  10.  If  the  tax  is  paid  within  three  months  after  the  death  of  the  decedent 
a  discount  of  five  per  centum  shall  be  allowed.  If  the  tax  is  not  paid  at  the 
end  of  one  year  from  the  death  of  the  decedent  interest  shall  be  charged  at 
the  rate  of  twelve  per  centum  per  annum  on  such  tax.  Where  because  of 
claims  made  upon  the  estate  litigation  or  other  unavoidable  cause  of  delay 
the  estate  of  any  decedent  or  any  part  thereof  cannot  be  settled  up  at  the  end 
of  the  year  interest  at  the  rate  of  six  per  centum  per  annum  shall  be  charged 
upon  the  tax  arising  from  the  unsettled  part  thereof  from  the  end  of  such  year 
until  there  be  default.  Where  real  or  personal  estate  withheld  by  reason  of 
litigation  or  other  cause  of  delay  in  manner  aforesaid  from  the  parties  entitled 
thereto,  subject  to  such  tax,  has  not  been  productive  to  the  extent  of  six  per 
centum  per  annum,  the  proper  parties  shall  not  pay  a  greater  amount  as 
interest  to  the  commonwealth  than  they  have  realized  or  shall  realize  from 
such  estate  during  the  time  the  same  has  been  or  shall  be  withheld  as  afore- 
said. 

§  11.  The  executor  or  administrator  or  other  trustee  paying  any  legacy  or 
share  in  the  distribution  of  any  estate  subject  to  the  said  tax  shall  deduct 
therefrom  at  the  rate  of  two  dollars  in  every  hundred  dollars  upon  the  whole 
legacy  or  sum  paid,  or  if  not  money  he  shall  demand  payment  of  a  sum  to  be 
computed  at  the  same  rate  upon  the  appraised  value  thereof.  No  executor  or 
administrator  shall  be  compelled  to  pay  or  deliver  any  specific  legacy  or  article 
to  be  distributed  subject  to  tax  except  on  the  payment  into  his  hands-  of  a 
sum  computed  on  its  value  as  aforesaid.  In  case  of  neglect  or  refusal  on  the 
part  of  such  legatee  to  pay  the  same  such  specific  legacy  or  article  or  so  much 
thereof  as  shall  be  necessary  shall  be  sold  by  such  executor  or  administrator 
at  public  sale  after  notice  to  such  legatee  and  the  balance  that  may  be  left  in 
the  hands  of  the  executor  or  administrator  shall  be  distributed  as  is  or  may 
be  directed  by  law.  Every  sum  of  money  retained  by  any  executor  or  adminis- 
trator or  paid  into  his  hands  on  account  of  any  legacy  or  distributive  share 
for  the  use  of  the  commonwealth  shall  be  paid  by  him  without  delay. 

§  12.  When  a  legacy  subject  to  tax  under  this  act  is  given  to  any  person  for 
life  or  for  a  term  of  years,  or  for  any  other  limited  period  upon  the  condition 
or  contingency  if  the  same  be  money  the  tax  thereon  shall  be  retained  upon 
the  whole  amount,  but  if  not  money,  application  shall  be  made  to  the 
orphans'  court  to  make  apportionment,  if  the  case  require  it,  of  the  sum  to 
be  paid  by  such  legatees  and  for  such  further  order  relative  thereto  as  equity 
shall  require. 

Whenever  any  such  legacy  shall  be  charged  upon  or  payable  out  of  real 
estate  the  heir  or  devisee  before  paying  the  same  shall  deduct  therefrom  at 
the  rate  aforesaid  and  pay  the  amount  so  deducted  to  the  executor  and  the 
same  shall  remain  a  charge  upon  such  real  estate  until  paid  and  the  payment 
thereof  shall  be  enforced  by  the  decree  of  the  orphans'  court  in  the  same 
manner  as  the  payment  of  such  legacy  may  be  enforced. 

§  13.  Whenever  any  real  estate  of  which  any  decedent  may  die  seized  shall 
be  subject  to  the  tax,  the  executors  and  administrators  shall  give  information 
thereof  to  the  register  of  the  county  where  administration  has  been  granted 
within  six  months  after  they  undertake  the  execution  of  their  respective 
duties,  or  if  the  fact  be  not  known  to  them  within  that  period  then  within 
one  month  after  the  same  shall  have  come  to  their  knowledge.  The  owners  of 
such  estate  immediately  upon  its  vesting  shall  give  information  thereof  to  the 
register  having  jurisdiction  of  the  granting  of  administration. 

§  14.  Any  executor  or  administrator  on  the  payment  of  said  tax  shall  take 
duplicate  receipts  from  the  register,  both  of  which  shall  be  forwarded  forth- 


THE  STATE  STATUTES  761 

with  to  the  auditor-general,  who  shall  charge  the  register  receiving  the  money 
with  the  amount  and  seal  with  the  seal  of  his  office  and  countersign  the 
original  receipt  and  transmit  it  to  the  executor  or  administrator  whereupon 
it  shall  be  a  proper  voucher  in  the  settlement  of  the  estate.  In  no  event  shall 
an  executor  or  administrator  be  entitled  to  a  credit  in  his  account  by  the 
register  unless  the  receipt  is  so  sealed  and  countersigned  by  the  auditor- 
general. 

§  15.  Whenever  any  foreign  executor  or  administrator,  or  trustee,  shall 
assign  or  transfer  any  stocks  or  loans  in  this  commonwealth  standing  in  the 
name  of  the  decedent,  or  in  trust  for  the  decedent,  which  shall  be  liable  for 
the  tax  imposed  by  this  act,  such  tax  shall  be  paid  on  the  transfer  thereof  to 
the  register  of  the  county  where  such  transfer  is  made,  otherwise  the  corpora- 
tion permitting  such  transfer  shall  become  liable  to  pay  such  tax. 

§  16.  Whenever  debts  shall  be  proved  against  the  estate  of  a  decedent  after 
distribution  of  legacies  from  which  the  tax  has  been  deducted,  in  compliance 
with  this  act,  and  the  legatee  is  required  to  refund  any  portion  of  a  legacy, 
a  portion  of  the  said  tax  shall  be  repaid  to  him  by  the  executor  or  adminis- 
trator if  the  tax  has  not  been  paid  into  the  state  or  county  treasury,  or  by 
the  county  treasurer  if  it  has  been  so  paid. 

§  17.  The  registers  of  -wills  upon  their  filing  with  the  auditor  general  the 
bond  hereinafter  required  shall  be  the  agents  of  the  commonwealth  for  the 
collection  of  the  said  tax.  For  services  rendered  in  collecting  and  paying 
over  the  same  they  shall  be  allowed  to  retain  for  their  own  use  upon  the 
gross  amount  collected  during  any  year,  five  per  centum  upon  the  tax  col- 
lected if  such  tax  shall  amount  to  a  sum  of  fifty  thousand  ($50,000)  dollars  or 
less,  three  per  centum  on  the  amounts  collected  in  excess  of  fifty  thousand 
($50,000)  dollars  and  not  exceeding  one  hundred  thousand  ($100,000)  dol- 
lars, two  -per  centum  on  the  amounts  collected  in  excess  of  one  hundred 
thousand  ($100,000)  dollars  and  not  over  two  hundred  thousand  ($200,- 
000)  dollars,  and  one  per  centum  on  the  amounts  collected  in  excess  of  two 
hundred  thousand  ($200,000)  dollars. 

§  18.  Each  register  shall  give  bond  to  the  commonwealth  in  such  penal  sum 
as  the  orphans'  court  may  direct  with  two  or  more  sufficient  sureties  for  the 
faithful  performance  of  the  duties  hereby  imposed  and  for  the  regular  account- 
ing and  paying  over  of  the  amounts  to  be  collected  and  received.  This  bond 
when  executed  and  approved  shall  be  forwarded  to  the  auditor-general. 

Until  such  bond  and  security  be  given  the  said  tax  shall  be  collected  by  the 
county  treasurer.  In  such  cases  all  the  provisions  of  this  act  relating  to 
collection  and  payment  by  registers  shall  apply  to  the  county  treasurer. 

§  19.  Each  register  of  wills  shall  on  the  first  Monday  of  each  month  make 
return  to  the  Auditor  General  and  return  and  payment  to  the  state  treasurer 
of  all  taxes  imposed  under  this  act  received  stating  for  what  estate  paid.  All 
taxes  collected  by  him  and  not  paid  over  within  one  month  after  his  quarterly 
return  of  the  same  he  shall -pay  interest  at  the  rate  of  twelve  per  centum  per 
annum  until  paid. 

§  20.  The  lien  of  the  said  tax  shall  continue  until  the  tax  is  settled  and 
satisfied  and  shall  be  limited  to  the  property  chargeable  therewith.  All  such 
taxes  shall  be  sued  for  within  five  years  after  they  are  due,  otherwise  they 
shall  be  presumed  to  have  been  paid  and  cease  to  be  a  lien  as  against  any 
purchasers  of  real  estate. 

§  21.  In  all  cases  where  any  amount  of  such  tax  is  paid  erroneously  to  the 
register  of  wills  the  state  treasurer  on  satisfactory  proof  rendered  to  him  by 
said  register  of  wills  of  such  erroneous  payment  may  refund  and  pay  over  to 
the  person  paying  such  tax  the  amount  erroneously  paid.  All  such  applica- 
tions for  the  repayment  of  such  tax  erroneously  paid  in  the  treasury  shall  be 
made  within  two  years  from  the  date  of  payment  except  when  the  estate  upon 
which  such  tax  has  been  erroneously  paid  shall  have  consisted  in  whole  or  in 
part  of  a  partnership  or  other  interest  of  uncertain  value  or  shall  have  been 
involved  in  litigation  by  reason  whereof  there  shall  have  been  an  over-valuation 
of  that  portion  of  the  estate  on  which  the  tax  has  been  assessed  and  paid 
which  over-valuation  could  not  have  been  ascertained  within  said  period  of 
two  years,  in  such  case  the  application  for  repayment  shall  be  made  to  the 


762  INHERITANCE  TAXATION 

state  treasurer  within  one  year  from  the  termination  of  such  litigation  or 
ascertainment  of  such  over-valuation. 

§  22.  This  act  does  not  repeal  or  effect  the  tax  imposed  and  collected  under 
the  act  approved  May  sixth,  one  thousand  eight  hundred  eighty-seven,  entitled 
"An  act  to  provide  for  the  better  collection  of  collateral  inheritance  taxes," 
its  amendments  and  supplements. 

§  23.  All  acts  or  parts  of  acts  inconsistent  with  this  act  are  hereby 
repealed. 

§  24.  The  provisions  of  this  act  we  severable  and  in  the  event  of  any  pro- 
vision hereof  being  declared  unconstitutional,  it  is  hereby  declared  as  the 
legislative  intent  that  such  unconstitutional  provision  shall  not  affect  the 
validity  of  any  other  provision  of  this  act. 

GOVERNOR'S  MEMORANDUM 

The  governor  long  withheld  his  approval  but  finally  affixed  his  signature 
and  the  act  became  a  law  July  11,  1917. 

The  governor  appended  the  following  memorandum: 

Approved:  The  llth  day  of  July,  1917. — This  bill  is  approved  with  the 
greatest  reluctance.  I  am  constrained  to  do  so  solely  because  the  necessities 
of  the  Commonwealth  require  the  raising  of  additional  revenue. 

The  Assembly  of  1917,  which  concluded,  its  lengthy  session  on  June  28, 
appropriated  a  total  of  $87,164,430.73.  The  responsible  fiscal  officers  of  the 
Commonwealth  on  December  28,  1916,  advised  me  that  the  sum  available  for 
appropriation  at  this  session  was  $70,091,178.22,  and  on  January  2,  1917,  I  so 
advised  the  General  Assembly.  I  am  now  advised  by  the  responsible  fiscal 
officers  of  the  Commonwealth  that,  exclusive  of  unexpended  balances,  the  pre- 
dictable available  sum  for  appropriation  is  $72,558,054.71,  and  much  less  if 
these  balances  were  all  drawn  from  the  Treasury. 

I  repeatedly  urged  the  responsible  leaders  in  charge  of  the  legislative 
program  that  it  was  imperative  to  provide  additional  revenue  if  the  business 
of  the  State  were  to  be  adequately  cared  for.  We  had  revenue  bills  prepared 
imposing  a  small  and  entirely  reasonable  tax  upon  coal,  oil,  and  natural  gas. 
These  natural  commodities,  the  gift  of  Providence  to  our  people,  are  being 
rapidly  depleted.  They  are  consumed  more  largely  without  than  within  the 
State,  and  our  people  are  denied  any  revenue  from  these  disappearing  sources 
of  wealth.  We  also  had  a  bill  prepared  placing  a  tax  of  one  mill  upon  the 
capital  stock  of  manufacturing  corporations.  This  tax  would  in  no  important 
way  have  affected  the  State's  well-known  policy  of  fostering  industry  and 
manufacture.  This  was  not  opposed  by  many  leading  manufacturers.  We 
had  reason  to  believe  that  these  measures  would  pass.  Had  they  passed, 
this  unjustifiably  drastic  tax  on  direct  inheritance  would  have  been  unneces- 
sary and  would  not  have  been  approved. 

The  bills  above-named  were  passed  by  a  large  vote  in  the*  House  and  met 
an  untimely  death  in  the  Committees  of  the  Senate. 

The  same  influences  that  clamored  for  large  appropriations  steadily  opposed 
these  taxes  upon  natural  resources  and  upon  the  capital  stock  of  manufac- 
turing corporations.  The  Senate  Committees  thus  chose  deliberately  to  tax 
the  estates  of  poor  and  rich  alike,  rather  than  to  tax  these  natural  resources 
which  to-day  are  selling  at  such  an  advanced  price  as  to  make  the  owners 
abnormally  rich  in  dividends  and  in  profits,  and  rather  than  to  tax  manufac- 
turing corporations  now  extraordinarily  prosperous  and  abundantly  able  to 
pay  the  proposed  tax.  The  whole  procedure  was  most  unfair  and  against  the 
welfare  of  all  the  people. 

Some  of  the  increased  expenditures  authorized  by  the  Assembly  are  in  this 
national  crisis  necessary.  They  cannot  be  refused  or  withheld.  To  reconvene 
the  Assembly  to  enact  revenue  producing  laws  is  a  costly  procedure  and 
might  not  result  in  any  substantial  service  to  the  people  since  the  same 
potential  influences  that  so  carefully  guarded  certain  special  interests  would 
again,  doubtless,  assert  themselves.  But  it  may  well  be  that  a  lesson  of 
this  sort  is  necessary  to  teach  the  people  the  truth. 

This  direct  inheritance  tax  applies  to  all  property  of  decedents  going  to 
direct  heirs.  It  covers  estates  of  every  size,  even  to  the  smallest.  There  are 
no  exemptions.  In  some  States  there  is  a  graded  tax,  with  exemptions  to  the 
small  estates.  Under  our  Constitution  this  is  forbidden,  and  the  approval  of 
this  bill  is,  in  its  last  analysis,  based  upon  the  fact  that  this  Assembly  has 
passed  a  resolution  providing  for  an  amendment  to  the  Constitution  which 
will  correct  the  injustices  of  this  measure.  This  can  be  and  should  be  adopted 
by  the  people  in  1919,  and  the  Assembly  should  then  so  amend  this  act  as  to 
bring  the  relief  that  all  fair-minded  and  unselfish  men  will  approve. 

MARTIN   G.   BRUMBAUGH, 

The  foregoing  is  a  true  and  correct  copy  of  the  act  of  the  general  assembly 
No.  318. 

CYRUS  E.  WOODS, 
Secretary  of  the  Commonwealth. 


THE  STATE  STATUTES 


763 


EHODE  ISLAND 

Imposes  two  taxes:     First  upon  the  entire  estate  for  the  right  to  transfer; 
second  upon  each  beneficiary  for  the  right  to  receive. 
Taxes  only  real  estate  of  non-residents  within  the  state. 
First  tax. —  For  right  to  transfer. 

On  the  entire  estate  one-half  of  one  per  cent  in  excess  of  $5,000. 
Second  tax: 
On  each  beneficiary  —  for  the  right  to  receive. 

TABLE  OF  RATES  AND  EXEMPTIONS 


In  excess 

CLASS  OR  RiLATioxsmp 

Exemption 

of  ex- 
emption 

$50,000 
to 

$250,000 
to 

$500,000 
to 

$750,000 
to 

In  excess 
of 

to 

$250,000 

$500,000 

$750,000 

$1,000,000 

$1,000,000 

$50,000 

Grandparent,  parent, 
husband,   wife,   child. 

$25,000   to    widow    or 
minor  child. 

i% 

1% 

11% 

2% 

2J% 

3% 

brother,  sister,  nephew, 

Others     $25,000,     but 

niece.      son-in-law, 

when  two  or  more  of 

daughter-  in-  law, 

class  mentioned  they 

adopted   or   mutually 
acknowledged      child, 

divide  exemption  and 
descendants    allowed 

lineal  descendant. 

exemption  per  stirpes, 

not  per  capita. 

All  others  excepting  cor- 

$1,000; but  descendants 

5% 

6% 

7% 

7% 

7% 

8% 

porations  and  institu- 

take interest  in  ex- 

tions except  by  charter 

emption   per  stirpes, 

or  laws  of  state  and 

not  per  capita. 

similar  foreign  corpora- 

tions which  are  exempt 

altogether. 

LAWS  OF  1916,  CHAPTER  1339.  BECAME  A  LAW  FEBRUARY  22,  1916. 
Tax  No.  1. —  Upon  the  Right  to  Transfer. 

Section  1.  Imposes  a  tax  upon  the  entire  net  estate  of  every  resident  dece- 
dent and  upon  real  estate  of  non-residents  as  above  shown  for  the  right  to 
transfer  but  provides  that  the  exemption  of  $5,000  in  case  of  non-resident  real 
estate  shall  be  proportioned  to  entire  estate  if  the  executor  or  administrator 
files  a  sworn  inventory.  If  such  statement  is  not  filed  no  exemption  allowed. 

§  2.  Provides  that  in  ascertaining  the  net  estate  all  gains  shall  be  allowed 
and  losses  deducted  except  as  to  stock  and  bonds  of  corporations  that  accrue 
during  administration  as  to  non-residents  only  the  excess  of  debts  over  per- 
sonal property  within  the  state.  This  excess  is  proportioned  to  the  value  of 
the  realty  as  compared  with  the  rest  of  the  estate,  provided  a  full  inventory 
is  filed,  otherwise  only  debts  chargeable  to  the  real  estate  are  deducted. 

§  3.  Provides  that  the  tax  imposed  by  section  1  shall  be  assessed  by  the 
board  of  tax  commissioners  who  notify  the  executor  or  administrator  by  mail 
of  the  amount  due.  If  it  is  not  paid  within  thirty  days  it  bears  interest  at 
8'  per  cent  from  the  date  of  notification'  and  remains  a  lien  until  paid  with 
executors  and  administrators  personally  liable. 

§  4.  Provides  for  proportionate  refund  of  tax  where  claims  are  afterwards 
proved  against  estate  and  gives  right  of  appeal  from  assessment. 

Tax  No.  2. 

Upon  the  right  to  receive. 

§  5.  A  tax  shall  be  and  is  hereby  imposed  upon  any  transfer  by  a  resident 
of  this  state  or  of  any  real  property  within  the  state,  or  any  tangible  or 
intangible  personal  property  or  interest  therein  or  income  therefrom,  and  by  a 
non-resident  of  this  state  of  any  real  property  within  the  state  or  interest 
therein,  to  any  person  or  persons,  in  trust  or  otherwise  as  a  tax  upon  the 
rights  to  receive,  in  the  following  cases: 


764  INHERITANCE  TAXATION 

(1)  When  the  transfer  is  under  a  will  or  by  the  statutes  of  descent  and 
distribution  of  this  state. 

(2)  When  the  transfer  is  made  by  deed,  grant,  bargain  or  gift,  without 
valuable  and  adequate  consideration,  and  in  contemplation  of  the  death  of  the 
grantor,  vendor  or  donor  or  intended  to  take  effect  in  possession  or  enjoy- 
ment at  or  after  such  death.    Such  tax  shall  be  imposed  when  any  such  per- 
son becomes  beneficially  entitled,  in  possession  or  expectancy  to  any  property 
or  interest  therein  or  the  income  therefrom  by  any  such  transfer  whether 
made  before  or  after  the  passage  of  this  act. 

(3)  Taxes  the  exercise  of  a  power  of  appointment  by  the  donee  of  a  power, 
and  in  default  of  its  exercise  taxes  the  succession  of  the  beneficiary  who 
receives  the  property  in  default  as  though  it  passed  under  the  will  of  the 
donee  of  the  power. 

(4)  Whenever  any  person  during  his  life  shall  appoint  a  trustee  naming 
himself  or  others  as  beneficiaries,  and  providing  for  the  administration  of 
said  trust  after  his  death  or  providing  for  a  termination  of  said  trust  and  a 
distribution  of  said  trust  estate  or  any  part  thereof  at  his  death,  a  transfer 
taxable  under  the  provisions  of  this  act  shall  be  deemed  to  take  place  upon 
the  death  of  the  crfeator  of  the  said  trust. 

(5)  Dower  and  curtesy  in  property  located  within  the  state  shall  be  deemed 
to  be  interests  in  real  property  subject  to  the  tax  imposed  by  this  section. 

(6)  Provides  that  the  tax  shall  be  assessed  by  the  board  of  tax  commis- 
sioners and  holds  all  executors,  administrators  and  trustees  personally  liable, 
requires  notice  to  them  by  mail  of  the  amount  of  the  taxes  and  unless  an 
appeal  is  taken  the  amount  so  assessed  is  final.     Makes  the  tax  a  lien  upon 
the  property  transferred  or  acquired  in  substitution  therefor  but  not  against 
bona  fide  purchasers  for  value.     The  lien  may  be  released  by  payment  of  the 
tax  or  filing  a  bond  as  provided  in  section  11.    The  heir,  devisee  or  donee  are 
also  made  personally  liable. 

§§  7-9.  Prescribe  the  rates  and  exemptions  shown  in  the  foregoing  table. 

§  10.  Makes  taxes  imposed  by  section  5  due  six  months  aiter  executor  or 
administrator  has  filed  his  bond  and  allows  a  discount  of  4  per  cent  if  they  are 
paid  within  that  time.  If  not  paid  within  nine  months  interest  charged  at  8 
per  cent  which  may  be  reduced  at  6  per  cent  in  case  of  unavoidable  delay  from 
accrual  to  time  when  cause  of  delay  is  removed,  after  that  8  per  cent.  In  case 
of  trust  deeds  taxed  under  subdivision  4  of  section  5  the  tax  is  due  when  the 
amount  thereof  is  certified  by  the  board  of  tax  commissioners  and  if  paid 
within  thirty  days  thereafter  a  discount  of  4  per  cent  is  allowed,  after  the 
thirty  days*  interest  at  8  per  cent  is  charged. 

§  11.  Provides  that  if  remaindermen  wish  to  defer  payment  until  they 
receive  the  property  they  may  file  a  bond,  with  the  approval  of  the  board  of 
tax  commissioners  in  three  times  the  amount  qf  the  tax  conditioned  for  the 
payment  of  the  tax  with  fnterest  at  4  per  cent  from  date  of  accrual.  The  bond 
must  be  renewed  every  five  years  and  the  obligor  undertakes  to  notify  the 
board  of  tax  commissioners  when  he  conies  into  actual  possession  of  the 
property.  The  filing  and  acceptance  of  the  bond  discharges  the  lien  of  the 
tax  and  frees  personal  representatives  from  liability. 

§  12.  Provides  for  a  proportionate  refund  of  the  tax  when  claims  have  been 
proved  against  the  estate  after  distribution. 

§  13.  Provides  for  the  computation  of  life  estates  and  remainders  on 
American  experience  tables  at  rate  of  5  per  cent. 

§  14.  Provides  that  no  allowance  shall  be  made  for  contingencies  or  condi- 
tions that  may  defect,  diminish  or  abridge  the  estate  of  one  presently  entitled 
in  fixing  its  value  but  refund  is  made  if  the  event  happens  but  this  does  not 
apply  to  a  life  estate  which  may  be  diminished  or  defeated  by  the  act  of  the 
beneficiary,  such  estates  are  taxed  as  if  there  were  no  such  possibility. 

§  15.  Provides  that  the  tax  shall  be  fixed  at  the  lowest  possible  rate  on 
contingent  remainders,  but  if  the  remaindermen  who  ultimately  succeed  are 
taxable  at  a  higher  rate  they  must  then  pay  the  difference. 


THE  STATE  STATUTES  765 

$  16.  Provides  that  where  the  tax  has  not  been  collected  or  has  been  sus- 
pended on  contingent  remainders  they  shall  be  taxed  at  full  cash  value  when 
they  fall  in  without  deducting  value  of  expired  life  interest. 

§  17.  Taxes,  bequests  to  executors  in  lieu  of  commissions  on  the  excess  oyer 
reasonable  value  of  services. 

§  18.  Provides  that  unless  the  will  directs  the  tax  to  be  paid  from  the 
residue  as  an  expense  of  administration  and  that  residue  is  sufficient,  the 
executor  or  administrator  must  deduct  the  tax  from  the  legacy  if  in  money 
and  shall  not  deliver  any  specific  legacy  or  property  until  the  tax  has  been 
paid  thereon  by  the  legatee.  If  the  legacy  is  charged  on  real  estate  the  heir 
must  deduct  the  tax,  the  tax  remains  a  lien  and  its  payment  may  be  enforced 
in  the  same  manner  as  the  legacy.  If  money  is  given  for  a  limited  period  the 
tax  must  be  deducted  from  the  whole  amount,  but  if  property  is  so  given  the 
board  of  tax  commissioners  must  make  an  apportionment  among  the  bene- 
ficiaries. 

§  19.  Provides  for  settlement  and  compromise  of  tax  claims  by  the  board 
of  tax  commissioners  with  the  approval  of  the  attorney-general. 

§  20.  Provides  for  suspending  the  whole  or  proportionate  part  of  tax  where 
claims  against  the  estate  are  in  litigation. 

§  21.  Gives  power  of  sale  for  payment  of  the  tax  in  the  same  way  as  to  pay 
debts. 

§  22.  Requires  the  executor  or  administrator  within  thirty  days  to  file  an 
inventory  on  oath  of  the  fair  cash  value  of  the  estate  and  within  one  year 
thereafter  a  further  sworn  statement  showing  gain  or  loss  in  value  during 
settlement  and  the  amounts  paid  for  funeral  expenses,  administration  and  the 
support  of  a  widow  and  the  family  of  decedent  as  fixed  by  the  probate  court. 
Trustees  under  taxable  trusts  created  by  decedent  must  file  similar  state- 
ments. Upon  application  the  board  of  tax  commissioners  may  extend  the 
time  for  filing  such  statements. 

§  23.  Requires  probate  clerks  to  notify  the  board  of  tax  commissioners  of 
the  granting  of  letters  and  fixes  the  fees  of  such  clerks. 

§  24.  Provides  that  if  the  board  of  tax  commissioners  is  dissatisfied  with  the 
inventory  they  may  summon  the  executor  or  administrator  to  furnish  further 
information.  They  then  appraise  the  estate  or  appoint  an  appraiser  before 
whom  the  usual  proceedings  are  held. 

§  25.  Imposes  a  penalty  for  failure  to  furnish  information  as  to  estates  by 
persons  required  to  do  so  by  the  act. 

§  26.  Provides  for  appeal. 

§  27.  Xo  banking  association  organized  under  the  laws  of  the  United 
States  and  located  within  this  state,  no  corporation  incorporated  within  this 
state,  and  no  unincorporated  association,  joint  stock  company  or  business 
trust  having  certificates  representing  shares  of  stock  and  carrying  on  busi- 
ness in  this  state  shall  record  a  transfer  of  its  stock  made  by  any  executor, 
administrator  or  trustee,  or  issue  a  new  certificate  for  any  such  share  of  its 
stock  at  the  instance  of  any  executor,  administrator  or  trustee,  or  transfer 
any  registered  bond  or  other  registered  evidence  of  indebtedness  at  the 
instance  of  any  executor,  administrator  or  trustee  until  a  permit  authorizing 
such  transfer  has  been  issued  by  the  board  of  tax  commissioners  and  filed  with 
the  said  corporation,  association,  company  or  trust  making  such  a  transfer 
before  a  permit  authorizing  such  transfer  as  aforesaid  has  been  issued  shall 
be  liable  for  any  tax  which  may  be  assessed  on  accoimt  of  the  bequest  or  gift 
of  such  stock,  bond  or  other  evidence  of  indebtedness,  together  with  the  inter- 
est thereon  to  be  collected  in  an  action  to  be  brought  by  the  general  treasurer. 
The  board  of  tax  commissioners  shall  not  issue  such  a  permit  until  all  taxes 
imposed  on  account  of  such  bequest  or  gift  has  been  paid  or  the  payment 
thereof  secured  by  bond  or  deposit  as  herein  before  provided. 

§  28.  The  amount  due  upon  the  claim  of  any  creditor  against  the  estate 
of  a  decedent  arising  under  a  contract  made  after  the  passage  of  this  act,  if 
payable  by  the  terms  of  such  contract  at  or  after  the  death  of  the  deceased 
shall  be  subject  to  the  same  tax  imposed  by  section  5  of  this  act  upon  a  legacy 
of  like  amount.  The  value  of  net  estates  of  decedents  or  the  value  of  legacies 
or  distribution  shares  in  the  estate  of  decedents,  for  the  purposes  of  taxation 


766 


INHERITANCE  TAXATION 


under  the  provisions  of  section  1  and  section  5  of  this  act,  shall  not  be 
diminished  by  reason  of  any  claim  against  the  estate  based  upon  such  a  con- 
tract except  in  so  far  as  it  may  be  shown  affirmatively  by  competent  evidence 
that  such  a  claim  was  legally  due  and  payable  in  the  lifetime  of  decedent. 

§  29.  Provides  that  no  final  accounting  shall  be  allowed  unless  the  tax  is 
shown  to  have  been  paid  or  a  bond  filed  as  provided. 

§  30.  Except  as  otherwise  provided  the  value  of  all  estates  is  to  be 
appraised  as  of  the  date  of  death. 

§  31.  If  no  will  or  administration  has  been  applied  for  within  three  months 
the  tax  commission  may  move  to  fix  the  tax  or  apply  for  administration. 

§  32.  Defines  the  word  "  person "  to  include  corporations,  associations, 
joint  stock  companies  and  business  trusts. 

§  33.  Sections  20  to  32  inclusive  of  this  act  shall  apply  to  the  taxes  imposed 
under  the  provisions  of  section  1  and  section  5  of  this  act. 

§  34.  This  act  shall  take  effect  upon  its  passage  and  may  be  cited  as  "  The 
Inheritance  Tax  Act  of  1916." 

Prior  statutes:     None. 

SOUTH  CAROLINA 

Imposes  no  inheritance  tax. 

SOUTH  DAKOTA 

Taxes  property  of  non-residents  within  the  state. 

TABLE  OF  RATES  AND   EXEMPTIONS 


Gr 

aded  rates 

CLASS  OB  RELATIONSHIP 

Amount 
exempted 

In  excess 
of 
exemp- 
tion 
up  to 
$15,000 

$15,000 
to 
$30,000 

$30,000 
to 
$50,000 

$50,000 
to 
$100,000 

All  in 
excess 
of 
$100,000 

$10,000 

1% 

li% 

2% 

2i% 

3% 

Husband,  lineal  ancestor  adop- 
ted or  mutually  acknowl- 
edged child  and  its  issue. 

Lineal     ances- 
tor,   $3,000; 
others,  $10,- 
000. 

U% 

21% 

3% 

31% 

4i% 

Brother  or  sister  and  their 
descendants,  son-in-law, 
daughter  -in-law. 

$1,000 

3% 

4i% 

6% 

7J% 

9% 

Aunt  or  uncle  or  their  descend- 
ants. 

$250 

4% 

6% 

8% 

10% 

12% 

Hospitals,  academies,  colleges, 
universities,    seminaries    of 
learning,       churches       and 
charitable  institutions. 
All  other  except  

$2,500 
$100 

1 
5% 

7i% 

10% 

121% 

15% 

Property  transferred  to 
county,  town  or  municipal 
corporations  within  the 
state  for  public  purposes. 

All  exempt.  .  .  . 

No  tax 

Proviso  as  to  exemptions: 

Provided  that  if  any  of  the  persons  above  named  to  whom  are  granted  such 
exemptions  shall  receive  from  the  decedent  by  the  same  transfer  property  out- 
side the  jurisdiction  of  this  state,  and  upon  which  no  inheritance  tax  is  collect- 
able by  this  state  which  property  is  exempt  from  an  inheritance  tax  in  the 


THE  STATE  STATUTES  767 

jurisdiction  where  located,  such  person  shall  be  entitled  to  only  such  part  of 
the  exemption  herein  provided  for  as  such  exemption  exceeds  the  value  of  the 
property  outside  the  jurisdiction  of  the  state  received  by  him  by  such  transfer. 

LAWS  1915,  CHAPTER  217,  WHICH  SUBSTANTIALLY  RE-ENACTS  LAWS 
1913,  CHAPTER  243,  AS  TO  RATES  AND  EXEMPTIONS*  BECAME 
A  LAW  MARCH  12,  1915. 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  any  transfer  of  prop- 
erty, real,  personal  or  mixed,  or  any  interest  therein,  or  income  therefrom  in 
trust  or  otherwise,  to  any  person,  association  or  corporation,  except  county, 
town  or  municipal  corporation,  .within  the  state,  for  strictly  county,  town  or 
municipal  purposes,  in  the  following  cases: 

( 1 )  When  the  transfer  is  by  will  or  by  intestate  laws  of  this  state  from  any 
person  dying  possessed  of  the  property  while  a  resident  of  the  state. 

(2)  When  a  transfer  is  by  will  or  intestate  law,  of  property  within  the  state 
or  within  its  jurisdiction  and  the  decedent  was  a  non-resident  of  the  state  at 
the  time  of  his  death. 

(3)  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non- 
resident when-  such  non-resident's  property  is  within  this  state,  or  within  its 
jurisdiction,  by  deed,  grant,  bargain,  sale  or  gift,  made  in  contemplation  of  the 
death  of  the  grantor,  vendor  or  donor,  or  intended  to  take  effect  in  possession 
or  enjoyment  at  or  after  such  death. 

Such  tax  shall  be  imposed  when  any  such  person  or  corporation  become 
beneficially  entitled  in  possession  or  expectancy  to  any  property  or  the  income 
thereof,  by  any  such  transfer  whether  made  before  or  after  the  passage  of  this 
act. 

Whenever  any  person  or  corporation  shall  exercise  a  power  of  appointment 
derived  from  any  disposition  of  property  made  either  before  or  after  the  pas- 
sage of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  act  in  the  same  manner  as  though  the 
property  to  which  such  appointment  relates  belonged  absolutely  to  the  donee 
of  such  power  and  had  been  bequeathed  or  devised  by  such  donee  by  will ;  and 
whenever  any  person  or  corporation  possessing  such  a  power  of  appointment 
so  derived  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided 
therefor,  in  whole  or  in  part  a  transfer  taxable  under  the  provisions  of  this 
act  shall  be  deemed  to  take  place  to  the  extent  of  such  omission  or  failure,  in 
the  same  manner  as  though  the  person  or  corporation  thereby  becoming 
entitled  to  the  possession  or  enjoyment  of  the  property  to  which  such  power 
related  had  succeeded  thereto  by  a  will  of  the  donee  of  the  power  failing  to 
exercise  such  power,  taking  effect  at  the  time  of  such  omission  or  failure. 

§  2.  Such  tax  after  the  taking  effect  of  this  act,  whether  same  accrued  prior 
or  subsequently  to  the  taking  effect  thereof,  shall  be  and  remain  a  lien  upon 
the  property  passed  or  transferred  until  paid  except  where  the  transfer  is  by 
deed  or  grant  in  the  hands  of  a  bona  fide  purchaser  or  encumbrancer  without 
notice.  In  such  case  a  certified  copy  of  the  application  for  probate  of  the  will 
or  estate  of  the  deceased,  or  a  certified  copy  of  the  application  for  a  determina- 
tion of  inheritance  taxes  may  be  recorded  in  the  office  of  the  register  of  deeds 
of  the  county  where  any  real  property  described  therein  is  situated,  which 
record  shall  thereafter  be  deemed  to  be  notice  of  such  taxes  to  subsequent  pur- 
chasers and  encumbrances  of  said  real  estate,  which  record  may  be  discharged 
by  recording  the  certificate  of  the  county  treasurer  to  that  effect,  or  by  record- 
ing a  certified  copy  of  the  order  of  the  county  court  to  that  effect.  The  person 
to  whom  the  -property  passes  or  is  transferred  and  all  administrators,  execu- 
tors and  the  trustees  of  every  estate  shall  be  liable  for  any  and  all  such  taxes 
until  the  same  shall  have  been  paid  as  hereinafter  directed. 

§  3.  The  tax  so  imposed  shall  be  computed  upon  the  true  and  full  market 
value  in  money  of  such  property  less  any  indebtedness  (except  expenses  of 
administration)  chargeable  against  said  property. 

The  rest  of  the  section  prescribes  the  rates  and  exemptions  shown  in  the 
foregoing  table. 

§  4.  Gives  the  county  court  issuing  letters  jurisdiction  in  all  transfer  tax 
matters. 


768  INHERITANCE  TAXATION 

§  5.  Provides  that  all  taxes  accrue  at  death  and  are  payable  as  soon  as 
amount  thereof  is  determined,  except  in  case  of  contingent  remainders,  whose 
value  cannot  be  fixed,  which  are  due  when  the  recipient  becomes  beneficially 
entitled. 

§  6.  Gives  the  tax  commission  general  charge  of  the  collection  of  inheritance 
taxes,  who  may  appoint  one  of  their  number  to  have  special  charge  thereof  and 
make  investigations ;  makes  the  attorney -general  and  his  assistants  legal  advis- 
ers of  the  commission  and  requires  the  state's  attorney  to  appear  for  the  com- 
mission upon  request  in  tax  litigations.  Requires  the  tax  commission  to 
prepare  forms  and  blanks  to  be  used  in  inheritance  tax  matters. 

§  7.  Requires  the  executor,  or  administrator  to  file  a  sworn  inventory 
within  thirty  days  of  his  appointment,  or  the  court  upon  application  may 
extend  his  time. 

§  8.  Authorizes  the  county  treasurer,  if  he  has  reason  to  believe  that  a 
transfer  in  contemplation  of  death  has  been  made,  to  proceed  to  collect  the 
tax. 

§§  9,  10  and  11.  Provide  for  hearings  before  the  county  court  in  transfer 
tax  matters  upon  due  notice  and  appeals  thereon. 

§  12.  Provides  for  the  computation  of  life  estates  and  remainders  by  Ameri- 
can experience  tables  on  the  basis  of  5  per  cent.  Where  the  transfer  is  in 
trust  and  the  right  of  the  beneficiary  can  be  valued  the  tax  is  presently 
imposed.  Where  an  estate  for  life  or  years  can  be  divested  by  act  or  omis- 
sion of  legatees  it  is  to  be  valued  as  if  there  were  no  possibility  of  such 
divesting.  In  case  of  contingent  remainders  the  tax  is  imposed  at  the  highest 
possible  rate,  with  provision  for  a  refund  if  they  prove  to  be  due  at  a  lower 
rate  on  the  happening  of  the  contingency.  No  allowance  is  made  for  any 
contingent  encumbrance  which  may  defeat  or  abridge  the  estate  of  a  bene- 
ficiary, but  a  proportionate  refund  is  provided  in  case  the  estate  is  in  fact 
defeated  or  abridged.  The  increase  of  an  estate  during  life  tenancy  is 
charged  in  valuation  of  the  estate  of  a  remainderman,  and  no  allowance  or 
deduction  is  made  for  the  intermediate  life  estate  upon  the  falling  in  of  a 
remainder  where  the  taxation  has  been  suspended  or  no  proceedings  have 
been  brought  to  collect  the  tax. 

§§13  to  16.  Provide  for  the  collection  of  delinquent  taxes. 

f  17.  Provides  for  receipts  which  must  be  produced  on  final  accounting. 

§  18.  If  such  tax  shall  not  be  paid  within  one  year  from  the  date  of  the 
death  of  the  decedent,  interest  shall  be  collected  thereon  at  the  rate  of  7  per 
centum  from  the  date  of  the  death  of  the  decedent,  unless,  by  reason  of  claims 
against  the  estate  necessary  litigation  or  other  unavoidable  cause  of  delay, 
such  tax  cannot  be  determined  as  herein  provided;  in  such  case  interest  at  the 
rate  of  6  per  centum  per  annum  shall  be  charged  upon  such  tax  from  the  date 
of  the  death  of  the  decedent  until  the  cause  of  delay  is  removed,  after  which 
7  per  centum  shall  be  charged. 

If  the  tax  shall  be  paid  in  full  prior  to  the  expiration  of  one  year  from  the 
date  of  the  death  of  the  decedent  no  interest  shall  be  charged. 

§  19.  Provides  for  a  refund  of  taxes  erroneously  paid,  if  the  application  is 
made  within  three  years  of  such  payment. 

§  20  ( 1 )  If  a  foreign  administrator,  or  executor  shall  assign  or  transfer 
any  stock  or  obligation  in  this  state,  standing  in  the  name  of  the  decedent  or 
in  trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the 
comity  treasurer  of  the  county  where  such  stock  or  obligation  is  situated  on 
the  transfer  thereof,  and  no  such  assignment  or  transfer  shall  be  valid  until 
such  tax  is  paid. 

(2)  If  any  non-resident  of  this  state  dies  owning  personal  property  in  this 
state,  such  property  may  be  transferred  or  assigned  by  the  personal  represen- 
tative of  the  decedent,  only  after  such  representative  shall  have  procured  a 
certificate  from  the  tax  commissioner  consenting  to  the  transfer  of  such  prop- 
erty. Such  consent  shall  be  issued  by  the  tax  commission  only  in  case  there 
is  no  tax  due  hereunder;  in  case  there  is  a  tax,  when  the  same  shall  have 
been  paid  to  the  county  treasurer  of  the  county  where  such  personal  prop- 
erty or  some  portion  thereof  is  situated. 

(3)  Provides  for  application  to  the  tax  commission  by  non-resident  personal 


THE  STATE  STATUTES 


769 


representative  or  beneficiary  for  transfer  of  property  having  its  situs  in  the 
state,  setting  forth  the  nature  and  value  of  the  property;  and  also,  if  required, 
of  all  other  property  of  decedent  outside  the  state,  with  a  schedule  of  debts  and 
funeral  expenses  and  a  certified  copy  of  the  will,  or  if  intestate  an  affidavit  as 
to  the  names,  ages  and  residences  of  the  beneficiaries  and  their  relationship  to 
the  decedent. 

(4)  From  this  information  and  any  other  it  may  secure  the  tax  commission 
must  determine  the  amount  of  the  tax.    On  its  payment  or  on  certificate  that 
none  is  due  a  consent  to  the  transfer  of  the  property  is  issued. 

(5)  Forbids  any  corporation  organized  under  the  laws  of  the  state  to  make 
any  transfer  on  its  books  without  such  consent.     If  it  does  so  it  is  liable  for 
the  tax,  plus  the  per  cent,  by  parties  aggrieved. 

§  21.  No  safety  deposit  company,  bank  or  other  institution,  person  or  per- 
sons holding  assets  or  securities  of  a  decedent,  shall  deliver  or  transfer  the 
same  to  the  executor,  administrator  or  legal  representative  of  such  decedent, 
or  upon  their  order  or  request,  unless  notice  of  the  time  and  place  of  such 
transfer  shall  be  given  to  the*  county  treasurer  of  the  county,  at  least  ten  days 
prior  thereto,  to  examine  such  securities  or  assets  at  the  time  of  such 
delivery  or  transfer.  If  upon  such  examination  the  county  treasurer  shall 
for  any  cause  deem  it  advisable  that  such  securities  or  assets  should  not  be 
immediately  transferred  or  delivered,  he  may  forthwith  notify,  in  writing, 
such  bank,  company,  institution  or  person  to  defer  delivery  or  transfer  thereof 
for  a  period  not  to  exceed  ten  days  from  the  date  of  such  notice,  and  there- 
upon it  shall  be  the  duty  of  such  company,  bank,  institution  or  person  to 
delay  the  delivery  or  transfer  to  the  time  stated  in  such  notice  or  until  the 
revocation  thereof  within  said  ten  days.  Failure  to  serve  the  notice  first  above 
mentioned,  or  defer  the  delivery  or  transfer  of  such  securities  or  assets  for 
the  time  stated  in  the  second  of  said  notices  shall  render  such  company,  bank, 
institution  or  person  liable  to  the  payment  of  the  tax  due  upon  said  security 
or  assets,  pursuant  to  the  provisions  of  this  act. 

§  22.  Provides  for  composition  and  settlement  of  tax  claims  with  estates 
of  non-resident  decedents  or  for  the  filing  of  a  bond  to  pay  the  tax. 

§  23.  Defines  various  words  used  in  the  act. 

§  24.  Repeals  the  act  of  1913,  with  a  saving  clause  as  to  rights  of  the  state. 

§  25.  Applies  the  proceedings  provided  to  all  pending  litigation. 

Prior  statutes:     L.  1905,  ch.  54;  L.  1913,  ch.  243. 

TENNESSEE 

Taxes  all  property  of  non-residents. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OR  RELATIONSHIP 

Amount  of 
exemption 

Above 
exemption 
up  to 
$20,000 

In 

excess 
of 
$20,000 

Father,  mother,  husband,  wife,  children  and  lawful  lineal 
descendants. 

$5,000 

1% 

11% 

Charitable  and  religious  institutions  and  purposes  

All 

No  tax 

All  others  including  adopted  children  

$250 

5%  on  all 

LAWS   1893,  CHAPTER  174,  AS  AMENDED  BY  LAWS   1907,   CHAPTER 
479,  AND  LAWS  1915,  CHAPTER  83. 

Section  1.  All  estates  —  real,  personal,  and  mixed  —  of  every  kind  whatso- 
ever, situated  within  this  state,  whether  the  person  or  persons  dying  seized 
thereof  be  domiciled  within  or  out  of  this  state,  passing  from  any  person  who 

25 


770  INHERITANCE  TAXATION 

may  die  seized  or  possessed  of  such  estates,  either  by  will  or  under  the  intestate 
laws  of  this  state,  or  any  part  of  such  estate  or  estates,  or  interest  therein, 
transferred  by  deed,  grant,  bargain,  gift,  or  sale,  made  in  contemplation  of 
death,  or  intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of 
the  grantor  or  bargainer  to  any  person  or  persons  or  to  bodies  corporate  or 
politic,  in  trust  or  otherwise, 

The  rest  of  the  section  shows  the  rates  and  exemptions  of  the  foregoing 
table.  The  amendment  of  1909  added  the  direct  inheritance  tax,  and  that  of 
1915  exempted  the  religious  and  charitable  bequests. 

The  section  further  provides:  and  all  owners  of  such  estates  and  all  execu- 
tors and  administrators  and  their  sureties  shall  only  be  discharged  from 
liability  for  the  amount  of  such  taxes  or  duties,  the  settlement  of  which  they 
may  be  charged  with,  by  having  paid  the  same  over  for  the  use  of  the  state, 
as  hereinafter  directed : 

§  2.  Taxes  bequests  to  executors  in  lieu  of  commissions  above  a  reasonable 
compensation.  • 

§  3.  Provides  that  the  tax  on  remainders  shall  not  accrue  until  the  ter- 
mination of  the  life  estate;  but  the  owner  has  the  right  to  pay  the  tax  before 
coming  into  possession,  in  which  case  the  value  is  fixed  as  of  the  time  of 
payment  after  deduction  value  of  life  estate.  The  tax  remains  a  lien  on 
estate  and  in  case  of  personalty  must  be  paid  within  one  year  or  security 
for  payment  given. 

§  4.  Provides  for  a  discount  of  5  per  cent  if  the  tax  is  paid  within  three 
months  after  death  of  decedent,  makes  the  tax  due  within  one  year,  and  charges 
interest  at  6  per  cent  thereafter. 

§  5.  Requires  the  executor  or  administrator  to  deduct  the  tax  or  collect  it 
from  the  beneficiary,  to  whom  property  must  not  be  delivered  unless  tax  is 
paid,  and  gives  power  of  sale  in  default  of  payment. 

§  6.  Provides  for  an  application  to  the  court  for  an  apportionment  of  the 
tax  among  the  beneficiaries  where  an  estate  is  given  for  life  or  years  upon  a 
condition  or  contingency. 

§  7.  Requires  the  heir  to  deduct  the  tax  where  the  legacy  is  charged  on  real 
estate,  makes  it  a  lien,  and  provides  for  its  enforcement  in  the  same  manner 
aa  the  legacy. 

§  8.  Makes  it  the  duty  of  executors  and  administrators  to  give  information 
to  the  clerk  of  the  county  court  of  any  real  estate  of  decedent  subject  to  the 
tax. 

§  9.  Provides  for  receipts  which  must  be  produced  on  final  accounting. 

§  10.  Whenever  any  foreign  executor  or  administrator  or  trustee  shall 
assign  or  transfer  any_  stocks  or  loans  in  this  state  standing  in  the  name  of 
the  decedent  or  in  trust  for  a  decedent  which  shall  be  liable  for  the  collateral 
inheritance  tax,  such  tax  shall  be  paid  on  the  transfer  thereof,  to  the  clerk 
of  the  county  court  where  such  transfer  is  made ;  otherwise  the  corporation  or 
person  permitting  such  transfer  shall  become  liable  to  pay  such  tax. 

§  11.  Provides  for  a  proportionate  refund  of  the  tax  when  debts  have  been 
proved  against  the  estate  after  distribution. 

§  12.  Provides  for  the  appointment  of  an  appraiser,  appraisal,  report  and 
appeal.  Life  estates  and  remainders  are  computed  on  the  Carlisle  tables.  (Six 
per  cent  is  the  basis  used.) 

§  13.  Makes  it  a  misdemeanor  for  an  appraiser  to  accept  a  fee  or  reward. 

§§  14  to  26.  Make  the  usual  provisions  for  records  and  the  enforcement  of 
delinquent  taxes,  which  cease  to  be  a  lien  on  real  estate  as  against  purchasers 
if  not  sued  for  within  five  years. 

TEXAS 

Taxes  only  collaterals  and  strangers. 

Taxes  all  property  of  non-residents  within  the  state  when  passing  to  col- 
laterals and  strangers. 


THE  STATE  STATUTES 

TABLE  OF  RATES  AND  EXEMPTIONS 


771 


CLASS  OR  RELATIONSHIP 

Amount 
exempt 

Rates  of  tax 

Father,  mother,  husband, 
wife,  direct  lineal  descend- 
ants. 

All 

No  tax. 

Public  corporations,  chari- 
table, educational  or  re- 
ligious purposes  within  the 
State. 

All 

No  tax. 

Lineal  ascendant,  brother, 
sister  or  their  lineal  descend- 
ants. 

$2,000 

Above 
exemp- 
tion 
up  to 
$10,000 

$10,000 
to 
$25,000 

$25,000 
to 
$50,000 

$50,000 
to 
$100,000 

$100,000 
to 
$500,000 

In 

excess 
of 
$500,000 

2% 

2J% 

3% 

3i% 

4% 

5% 

Uncle,  aunt  or  their  lineal  de- 
scendants. 

$1,000 

3% 

4% 

5% 

6% 

1% 

8% 

All  others  

$500 

4% 

5i% 

7% 

8i% 

10% 

12% 

LAWS  OF  1907,  CHAPTER  ax,  AS  AMENDED  BY  CHAPTER  166,  LAWS 

OF   1917. 

Section  1.  All  property  within  the  jurisdiction  of  this  state,  real  or  per- 
sonal, corporeal  or  incorporeal,  and  any  interest  therein,  whether  belonging 
to  inhabitants  of  this  state  or  not,  which  shall  pass,  absolutely  or  in  trust,  by 
will,'  or  by  the  laws  of  descent  of  this  or  any  other  state,  or  by  deed,  grant, 
sale  or  gift,  made  or  intended  to  take  effect  in  possession  or  enjoyment  after 
the  death  of  the  grantor  or  donor,  shall  upon  passing  to  or  for  the  use  of  any 
person  except  the  father,  mother,  husband,  wife  or  direct  lineal  descendants 
of  the  testator,  intestate,  grantor  or  donor,  or  any  public  corporation  or 
charitable,  educational  or  religious  organization  within  this  state  when  such, 
bequest,  gift  or  devise  is  to  be  used  for  charitable,  educational  or  religious 
purposes  within  this  state,  be  subject  to  a  tax  for  the  benefit  of  the  state,  as 
follows : 

The  section  then  prescribes  the  rates  and  exemptions  as  shown  in  the  fore- 
going table. 

§  2.  Provides  for  the  valuation  of  life  estates  and  remainders  upon  actu- 
aries' combined  experience  tables  on  the  basis  of  4  per  cent. 

§  3.. Taxes  bequests  to  executors  in  lieu  of  commissions  in  excess  of  a  rea- 
sonable compensation. 

§  4.  Requires  the  executor  or  administrator  to  file  an  inventory  within  three 
months  of  his  appointment  under  penalty  of  $1,000. 

§  5.  If  no  probate  proceedings  have  been  brought  on  a  taxable  estate  within 
three  months  after  death  the  county  court  must  appoint  an  administrator. 

§  6.  Provides  for  the  appointment  of  appraisers  or  that  the  county  judge 
may  make  the  appraisal  himself. 

§  7.  Requires  the  county  judge  to  assess  the  tax  upon  the  appraisal,  makes 
the  tax  a  lien  with  interest  from  the  date  of  death  unless  paid  within  six 
months,  when  no  interest  is  charged. 

§  8.  Requires  the  executor  or  administrator  to  deduct  the  tax  if  bequest  or 
share  is  in  money;  if  in  property  to  collect  it  from  the  beneficiary;  gives  him 
power  of  sale,  and  forbids  delivery  to  beneficiary  until  tax  is  paid. 

§  9.  Where  a  legacy  is  charged  on  real  estate  the  heir  is  required  to  deduct 
the  tax,  which  remains  a  lien  and  may  be  enforced  in  the  same  manner  as 
the  legacy. 


772 


INHERITANCE  TAXATION 


§  10.  Provides  for  tax  receipts. 

§  11.  Provides  for  actions  to  recover  delinquent  taxes. 

§  12.  Requires  payment  of  taxes  by  county  collectors  to  the  state  treasurer. 

§  13.  Provides  for  deposit  of  the  tax  moneys  in  the  general  revenue  fund. 

§  14.  Provides  for  a  proportionate  refund  where  debts  have  been  proved 
against  the  estate  after  distribution. 

§   15.  Requires  that  final  accounting  shall  show  payment  of  the  tax. 

§  16.  Provides  that  administration  may  be  dispensed  with  where  an  inven- 
tory is  filed  and  tax  proceedings  had. 

Chapter  166,  Laws  of  1&17,  reads  as  follows: 

The  comptroller  of  public  accounts  of  the  state  of  Texas  is  hereby  author- 
ized and  empowered,  and  it  is  made  his  duty  to  appoint  and  contract  with 
some  suitable  person  or  persons  whose  duty  it  shall  be  to  look  specially  after, 
sue  for  and  collect  the  taxes  provided  by  this  chapter ;  such  person  in  no  event 
to  receive  under  such  contract  more  than  ten  (10)  per  cent  of  the  amount  of 
such  taxes  collected  hereunder,  as  compensation.  It  shall  be  the  duty  of  such 
person,  so  contracted  with,  to  make  written  report  to  the  county  judge  of 
each  county  in  which  he  may  be  appointed  and  employed  to  assist  in  the 
enforcement  of  this  law,  of  each  estate  upon  which  such  tax  may  be  due,  or 
may  become  due,  as  soon  as  possible  after  the  death  of  any  person  owning 
such  estate.  Such  report  shall  state  probable  value  of  such  estate,  its  charac- 
ter and  location,  if  known,  and  the  names  of  the  persons  known  to  be  inter- 
ested therein. 

The  amount  of  compensation  due  such  person  shall  be  paid  by  the  collector 
of  taxes  out  of  the  taxes  collected  on  property  belonging  to  such  estate,  and 
such  payment  shall  be  deducted  from  said  taxes  by  said  collector  and  reported 
to  the  comptroller. 

It  shall  be  the  further  duty  of  such  person  to  aid  in  every  possible  way  in 
the  collection  of  such  taxes. 

It  shall  be  the  duty  of  the  county  judge  of  said  county  upon,  his  own  motion 
or  petition  of  such  appointee  of  said  comptroller,  to  appoint  an  administrator 
of  every  estate  subject  to  taxation  under  the  provisions  of  this  chapter  where 
no  application  for  letters  testamentary  or  of  administration  thereon  is  made 
within  three  (3)  months  after  the  death  of  the  person  owning  such  estate  tax- 
able hereunder.  The  person  appointed  by  the  said  comptroller  may  represent 
the  state  in  any  proceeding  necessary  under  the  provisions  of  this  chapter  to 
enforce  the  collection  of  such  taxes  but  without  other  compensation  than  aa 
provided  in  his  original  employment. 


UTAH 

Taxes  all  property  of  non-residents  within  the  state. 

TABLE  OF  RATES  AND  EXCEPTIONS 


On  entire 
net  estate 

On  entire 

CLASS  OB  RELATIONSHIP 

Amount  exempt 

above 
$10,000  up 
to  $25,000 

in  excess 
of  $25,000 

The  court  apportions  the  tax  among  all  benefi- 
ciaries without  exception. 

On  entire  estate; 
one  exemption 

3% 

5% 

of  $10,000. 

TITLE  36,  COMPILED  LAWS  OF  UTAH,  OF  1907,  AS  AMENDED  BY 
CHAPTERS  28  AND  29,  LAWS  OF  1915,  AND  LAWS  OF  1917. 

NOTE:     The  1917  amendment  did  not  change  rates  or  exemptions. 

§  1220-x.  Property  Subject  to  Tax.  Computation.  Lien.  Deductions. — 
All  property  within  the  jurisdiction  of  this  state,  and  any  interest  therein, 
whether  belonging  to  the  inhabitants  of  this  state  or  not,  and  whether  tangible 


THE  STATE  STATUTES  773 

or  intangible,  which  shall  pass  by  will  or  by  statutes  of  inheritance  of  this 
or  any  other  state,  or  by  deed,  grant,  bargain,  sale,  or  gift,  made  in  contem- 
plation of  the  death  of  the  grantor,  vendor  or  donor,  or  intended  to  take 
effect  in  possession  or  enjoyment  at  or  after  the  death  of  the  grantor,  vendor, 
or  donor,  to  any  person  in  trust  or  otherwise,  shall  be  subject  to  the  following 
tax,  after  the  payment  of  all  debts,  for  the  use  of  the  state:  Three  per  cent 
of  its  market  value  in  excess  of  $10,000.00,  and  not  exceeding  $25,000.00,  and 
5  per  cent  of  its  market  value  in  excess  of  $25,000.00;  and  all  administrators, 
executors,  and  trustees,  and  any  such  grantee  under  conveyance,  and  such 
donee  under  a  gift  made  during  the  grantor's  or  donor's  life,  shall  be  respect- 
ively liable  for  all  such  taxes  to  be  paid  by  them  respectively,  except  asi 
herein  otherwise  provided,  with  lawful  interest  as  hereinafter  set  forth,  until 
the  same  shall  have  been  paid.  The  tax  aforesaid  shall  be  and  remain  a  lien 
on  «uch  estate  from  the  death  of  the  decedent  until  paid.  In  determining  the 
amount  of  tax  to  be  paid  under  the  provisions  of  this  section,  the  debts  of  the 
estate  shall  first  be  deducted,  and  the  remainder  shall  be  the  net  estate.  Upon 
all  that  portion  of  the  net  estate  in  excess  of  $25,000.00  the  tax  of  5  per  cent 
shall  be  computed.  Upon  all  that  portion  of  the  net  estate  in  excess  of 
$10,000.00  and  not  exceeding  $25,000.00  the  tax  of  3  per  cent  shall  be  com- 
puted; and  the  court  shall  determine  the  amount  of  tax  to  be  paid  by  the 
several  devisees,  legatees,  grantees,  or  donee  of  the  decedent. 

§  1220-xl.  The  term  "  debts,"  as  used  in  this  chapter,  shall  include,  in  addi- 
tion to  debts  owing  by  decedent  at  the  time  of  his  death,  the  local  or  state 
taxes  due  from  the  estate  prior  to  his  death,  a  reasonable  sum  for  funeral 
expenses,  the  court  costs,  the  statutory  fees  of  executors,  administrators,  or 
trustees,  and  no  other  sum;  but  said  debts  shall  not  be  deducted  unless  the 
same  are  approved  and  allowed,  within  fifteen  months  from  the  death  of 
decedent,  as  established  claims  against  the  said  estate,  unless  otherwise 
ordered  by  the  judge  of  the  proper  county,  or,  in  case  of  foreign  estates  where 
the  property  within  this  state  consists  of  personal  property  only,  allowed  by 
the  attorney-general. 

§§  2  to  7.  Provide  for  the  appointment  of  appraisers,  their  compensation 
and  duties,  with  the  usual  regulations  as  to  notice,  hearings,  appeal  and  re- 
appraisal. 

§  8.  Requires  appraisement  within  three  months  and  payment  of  the  tax 
within  fifteen  months  after  death,  or  the  property  will  be  decreed  to  be  sold. 

§  9.  Provides  for  the  valuation  of  life  interests  in  real  property  and  their 
present  taxation  on  the  expiration  of  such  life  estate,  the  remainder  is  valued 
less  any  betterments  by  the  remainderman,  and  the  tax  then  becomes  due 
and  payable  within  sixty  days.  In  case  of  personalty  the  court  apportions 
the  tax  on  the  value  of  the  life  estate  and  the  remainder,  and  it  is  then 
presently  payable. 

§  10.  Taxes  bequests  to  executors  in  lieu  of  commissions  when  in  excess  of 
reasonable  compensation. 

§  11.  Requires  the  heir  to  deduct  the  tax  when  a  legacy  is  charged  on  real 
estate,  makes  it  a  lien,  and  provides  for  enforcement  in  the  same  manner  as 
the  legacy. 

§  12.  Requires  the  executor  or  administrator  to  deduct  the  tax  or  collect  it 
from  the  beneficiary,  and  property  may  not  be  delivered  until  the  tax  is  paid. 

§  13.  Makes  taxes  payable  within  fifteen  months;  after  that  8  per  cent  is 
charged.  The  time  may  be  extended  and  interest  abated  in  a  proper  case  by 
the  court,  or  in  case  of  non-residents  by  the  attorney-general. 

§  14.  Provides  for  proceedings  to  sell  real  estate  to  pay  the  tax  in  the  same 
way  as  to  pay  debts. 

§  15.  Provides  that  final  accounting  must  show  payment  of  tax  before  set- 
tlement allowed. 

§  16.  Gives  district  court  issuing  letters  jurisdiction  in  tax  proceedings. 

§  17.  Empowers  the  state  treasurer  to  demand  information  from  executors 
and  administrators. 

§  18.  Provides  for  the  keeping  of  an  inheritance  tax  book  by  the  clerk  of 
the  district  court. 


774  INHERITANCE  TAXATION 

§  19.  Provides  for  inventory  by  executors  and  administrators,  and  the  keep- 
ing of  a  real  estate  lien  book. 

§  20.  Authorizes  the  court  to  extend  the  time  of  appraisement,  but  not  for 
more  than  three  months. 

§§  21  to  25.  Prescribe  the  duties  of  the  court  clerk  and  provide  for  collec- 
tion of  delinquent  taxes  by  the  attorney-general. 

§  26.  No  safe  deposit  company,  bank,  or  other  institution,  person,  or  per- 
sons holding  securities  or  assets  of  the  decedent  shall  deliver  or  transfer  the 
same  to  the  executor  or  administrator  or  legal  representative  of  said  decedent 
unless  notice  of  the  time  and  place  of  such  intended  transfer  be  served  upon 
the  state  treasurer  at  least  five  days  prior  to  the  transfer  thereof,  or  unless 
the  tax  for  which  such  securities  or  assets  are  liable  under  this  title  shall 
be  first  paid.  It  shall  be  lawful  for,  and  the  duty  of,  the  state  treasurer 
personally,  or  by  any  person  by  him  duly  authorized,  to  examine  such 
securities  or  assets  at  the  time  of  such  delivery  or  transfer.  Failure  to  serve 
such  notice  upon  the  state  treasurer,  or  to  allow  such  examination  on  the 
delivery  of  such  securities  or  assets  to  such  executor,  administrator,  or  legal 
representative  before  said  tax  is  paid  shall  render  such  safe  deposit  company, 
trust  company,  bank,  or  other  institution,  person,  or  persons  liable  for  the 
payment  of  the  taxes  due  upon  such  securities  or  assets  as  provided  in  this 
title. 

§  27.  Where  any  property  belonging  to  a  foreign  estate  is  subject  to  the 
payment  of  an  inheritance  tax  in  this  state,  such  tax  shall  be  assessed  upon 
the  market  value  of  such  property  remaining  after  the  payment  of  such  debts 
and  expenses  as  are  chargeable  to  the  property  under  the  laws  of  this  state, 
and  in  the  event  that  the  executor,  administrator  or  trustee  of  such  foreign 
estate  files  with  the  clerk  of  the  court  having  ancillary  jurisdiction,  state- 
ments in  writing  exhibiting  the  true  market  value  of  the  entire  estate  of  the 
decedent  owner,  and  the  indebtedness  for  which  the  said  estate  has  been 
adjudged  liable,  which  statements  shall  be  in  affidavit  form  and  sworn  to  by 
such  executor,  administrator  or  trustee,  the  beneficiaries  of  said  estate  shall 
then  be  entitled  to  have  deducted  such  proportion  of  the  said  indebtedness  of 
the  decedent  from  the  value  of  the  property  within  this  state,  as  the  value  of 
the  property  within  this  state  bears  to  the  value  of  the  entire  estate;  provided, 
that  in  all  such  cases  where  the  property  within  this  state  consists  of  personal 
property  only,  the  statements  hereinbefore  provided  for  shall  be  filed  with  the 
attorney -general. 

§  28.  Whenever  any  property,  real  or  personal,  within  this  state,  belongs  to 
a  foreign  estate,  said  foreign  estate  passes  in  part  exempt  from  the  inheritance 
tax,  and  in  part  subject  to  such  inheritance  tax,  and  it  is  within  the  authority 
or  discretion  of  the  foreign  executor,  administrator,  or  trustee  administering 
the  estate  to  dispose  of  the  property  not  specifically  devised  to  direct  heirs  or 
devisees  in  the  payment  of  the  debts  owing  by  the  decedent  at  the  time  of  his 
death  or  in  the  satisfaction  of  legacies,  devisees,  or  trusts  given  to  direct 
and  collateral  legatees  or  devisees,  or  in  payment  of  the  distributive  shares  of 
any  direct  and  collateral  heirs,  then  the  property  within  the  jurisdiction  of 
the  state,  belonging  to  such  foreign  estate,  shall  be  subject  to  the  inheritance 
tax  imposed  by  this  title,  and  the  tax  due  thereon  shall  be  assessed  as  provided 
in  the  next  preceding  section  of  this  title,  and  with  the  same  proviso  respecting 
the  deduction  of  the  proportionate  share  of  the  indebtedness,  as  therein 
provided. 

§  29.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  trans- 
fer any  corporate  stock  or  obligations  in  this  state  standing  in  the  name  of  a 
decedent,  or  in  trust  for  a  decedent,  liable  to  such  tax,  the  tax  shall  be  paid  to 
the  state  treasurer  on  or  before  the  transfer  thereof;  otherwise  the  corporation 
permitting  its  stock  to  be  so  transferred  shall  be  liable  to  pay  such  tax,  and  it 
is  the  duty  of  the  state  treasurer  to  enforce  the  payment  thereof. 

§  30.  Whenever  an  estate  charged,  or  sought  to  be  charged,  with  the  inherit- 
ance tax,  is  of  such  a  nature  or  is  so  disposed  that  the  liability  of  the  estate  is 
doubtful,  or  the  value  thereof  cannot  with  reasonable  certainty  be  ascertained 
under  the  provisions  of  law,  the  state  treasurer  may,  with  the  approval  of  the 


THE  STATE  STATUTES 


775 


attorney-general,  which  approval  shall  set  forth  the  reasons  therefor,  com- 
promise with  the  beneficiaries  or  representatives  of  such  estates,  and  compound 
the  tax  thereon;  but  said  settlement  must  be  approved  by  the  district  court 
or  judge  of  the  proper  court,  and  after  such  approval,  the  payment  of  the 
amount  of  the  taxes  so  agreed  upon  shall  discharge  the  lien  against  the  prop- 
erty of  the  estate. 

§  31.  This  title  shall  apply  to  all  pending  estates  which  are  not  closed,  and 
the  property  subjected  by  this  title  to  the  said  tax  is  liable  to  the  provisions 
incorporated  in  this  title. 

VERMONT 

Taxes  only  real  estate  of  non-residents. 

Until  April  12,  1917,  Vermont  only  taxed  collaterals  and  strangers. 

TABLE  OF  RATES  UNDER  STATUTE  OF  1917 
Became  a  law,  April  12,  1917 


CLASS  OR  RELATIONSHIP 

Exemp- 
tion 

Rates 

$10,000 
to 
$25,000 

$25,000 
to 
$50,000 

$50,000 
to 
$250,000 

In  excess 
of 
$250,000 

Husband,  wife,  child,  father,  mother, 
or  grandchild  of  a  descendant,  son- 
in-law,  daughter-in-law,  adopted 
or  mutually  acknowledged  child, 
step-child,  other  lineal  descendant. 

$10,000 

1% 

2% 

4% 

5% 

All  others,  excepting  charities  named 
in  second  table. 

None 

5%  on  all. 

TABLE  OF  RATES  AND  EXEMPTIONS  PRIOR  TO  APRIL  12,  1917 


CLASS  OR  RELATIONSHIP 

Exemption 

Rate  of  tax 

Father,  mother,  husband,  wife,  lineal  descendant,  the  wife  or  widow 
of  a  son,  the  husband  of  a  daughter,  a  step-child,  a  child  adopted  as 
such  during  his  minority  in  conformity  with  the  laws  of  this  state, 
a  child  of  a  step-child  or  of  such  adopted  child,  bishop  in  his  ecclesi- 
astical capacity  for  religious  uses  within  this  state,  or  a  city  or  town 
for  cemetery  purposes;  and  every  charitable,  educational  or  religious 
society  or  institution  other  than  one  created  and  existing  under 
and  by  virtue  of  the  laws  of  this  state  and  having  its  principal  office 
herein. 

All 

No  tax. 

All  others  

None 

5%  on  all. 

NO.  52,  LAWS  1917. 

An  Act  in  Addition  to  Chapter  38  of  the  Public  Statutes,  Relating  to  the 
Taxation  of  Inheritances  and  Taxable  Transfers. 

It  is  hereby  enacted  by  the  General  Assembly  of  the  State  of  Vermont: 
Section  1.  The  husband,  wife,  child,  father,  mother  or  grandchild  of  a 
decedent,  the  wife  or  widow  of  a  son  or  the  husband  of  a  daughter  thereof,  a 
child  adopted  during  its  minority  by  a  decedent  during  his  life  under  the  laws 
of  this  state,  a  step-child  of  a  decedent,  a  child  of  such  adopted  child  or  of 
such  step-child,  or  other  lineal  descendants  of  a  decedent  who  receives  from 
such  decedent,  in  trust  or  otherwise,  a  legacy  or  distributive  share  consisting 


776  INHERITANCE  TAXATION 

of  or  arising  from  property  or  an  interest  therein  owned  by  such  decedent  at 
his  decease  and  passing  by  will,  the  laws  of  descent  or  a  decree  of  a  court  in 
this  state,  shall,  except  as  otherwise  provided,  pay  to  the  state  a  tax  at  the 
following  rates: 

On'  the  excess  of  its  value  over  ten  thousand  dollars  and  not  exceeding 
twenty-five  thousand  dollars,  at  1  per  cent; 

On  the  excess  of  its  value  over  twenty-five  thousand  dollars  and  not  exceed- 
ing fifty  thousand  dollars,  at  2  per  cent; 

On  the  excess  of  its  value  over  fifty  thousand  dollars,  and  not  exceeding  two 
hundred  fifty  thousand  dollars,  at  4  per  cent; 

On  the  excess  of  its  value  over  two  hundred  fifty  thousand  dollars,  at  5 
per  cent. 

§  2.  The  provisions  of  this  ^act  imposing  a  tax  upon  legatees  or  distributive 
shares  passing  to  persons  enumerated  in  the  preceding  section  shall  not  apply 
to  legacies  or  shares  passing  from  the  estates  of  persons  who  deceased  prior 
to  the  date  whereon  this  act  takes  effect. 

§  3.  The  two  preceding  sections  shall  be  construed  to  be  in  addition  to  and 
forming  a  part  of  chapter  38  of  the  Public  Statutes  (chap.  48  of  the  General 
Laws,  as  proposed).  Unless  inconsistent  with  or  repugnant  to  the  context  of 
this  act,  all  provisions  of  said  chapter  38  (chap.  48,  G.  L.),  and  of  all  acts  or 
parts  of  acts  in  amendment  thereof  or  in  addition  thereto  shall  be  construed 
to  apply  to  the  taxes  assessed  in  the  first  section  of  this  act  with  the  same 
force  and  effect  as  if  such  last  named  section  were  a  part  of  said  chapter. 

Approved  April  12,  1917. 

Prior  to  an  act  of  J917  the  Vermont  Inheritance  Statute  is  summarized  as 
follows : 

PUBLIC  STATUTES  OF  1906,  AS  AMENDED  BY  LAWS  OF  1912, 
CHAPTER  60 

§  822.  After  making  the  above  exemptions  prescribes  as  to  all  others:  that 
shall  receive  in  trust  or  otherwise  a  legacy  or  distributive  share  consisting  of 
or  arising  from  real  estate  within  this  state  or  any  interest  therein  owned  by 
such  decedent  at  the  date  of  his  death,  and  passing  by  will,  the  laws  of  descent, 
or  a  decree  of  court  in  this  state,  or  that  shall  receive  in  trust  or  otherwise 
a  legacy  or  distributive  share  consisting  of  or  arising  from  personal  estate  or 
any  interest  therein  so  passing  from  such  decedent  who  at  the  date  of  his 
death  was  an  inhabitant  of  this  state  and  then  owned  such  personal  prop- 
erty shall,  except  as  otherwise  provided  in  this  chapter,  pay  to  the  state  a 
tax  of  five  per  cent,  of  the  value  in  money  of  such  legacy  or  distributive 
share. 

§  823.  Every  person,  unless  one  of  a  class  exempted  in  the  preceding  sec- 
tion, who  acquires  title  to  real  estate  within  this  state  or  any  interest  therein 
by  deed,  grant,  or  gift,  except  in  case  of  a  bona  fide  purchase  for  a  full  con- 
sideration in  money  or  money's  worth,  made  or  intended  to  take  effect  in 
possession  or  enjoyment  upon  or  after  the  death  of  the  grantor  or  donor; 
and  every  such  person  who  thus  acquires  title  to  personal  estate  or  any  inter- 
est therein  from  a  deceased  person  who  at  the  date  of  his  death  was  an 
inhabitant  of  this  state  and  then  owned  such  property,  shall  pay  to  the  state 
the  same  tax  that  he  would  have  been  required  to  pay  had  such  estate  or 
interest  passed  to  him  from  such  deceased  person  by  will,  the  laws  of  descent, 
or  decree  of  a  court  in  this  state.  Such  tax  shall  be  a  first  lien  on  the  real 
or  personal  estate  thus  conveyed,  until  such  tax  is  paid  in  full. 

§§  824-825.  Are  repealed  by  chapter  60,  L.  1912. 

§  826.  Exempts  bequests  to  maintain  burial  costs. 

§  827.  Requires  the  executor  or  administrator  to  deduct  the  tax  or  collect 
it  from  the  heir  or  legatee. 

§  828.  Gives  power  of  sale  to  pay  the  tax  in  the  same  manner  as  to  pay 
debts. 

§  829.  Makes  the  tax  a  lien  on  property  and  forbids  its  delivery  to  bene- 
ficiary until  the  tax  is  paid. 


THE  STATE  STATUTES 


777 


§  830.  Makes  the  executor  or  administrator  personally  liable  and  requires 
him  to  collect  the  tax  from  heir  to  real  estate. 

§  831.  Requires  the  heir  to  deduct  the  tax  when  a  legacy  is  charged  on 
real  estate  makes  it  a  lien  and  provides  for  its  enforcement. 

§  832.  Requires  that  final  accounting  shall  show  that  All  taxes  have  been 
paid. 

§  833.  Gives  the  probate  court  granting  letters  jurisdiction  in  transfer 
tax  proceedings. 

§§  834-837.  Provide  for  appeals  proceedings  in  the  supreme  court  -hearings 
and  costs. 

§§  838-841.  Provide  that  the  probate  court  may  value  the  estate  and  for 
proceedings  on  such  valuation. 

§§  842-847.  Provide  for  valuation  by  appraisers  and  proceedings  thereon. 

§§  848-852.  Provide  for  valuation,  by  agreement  between  foreign  personal 
representatives  and  the  commissioner  of  state  taxes.  These  sections  now  apply 
only  to  real  estate  within  the  state. 

§§  853-657.  Provide  for  the  valuation  of  life  estates  and  remainders  upon 
American  experience  tables  with  the  rate  of  interest  at  3%  per  cent. 

§  858.  Taxes  bequests  to  executors  in  lieu  of  commissions  in  excess  of  rea- 
sonable compensation. 

§  859.  Provides  for  receipts. 

§  860.  Provides  for  refunding  taxes  erroneously  paid. 

§§  861-869.  Provide  for  the  payment  of  taxes  which  are  due  two  years 
after  death  unless  a  legacy  shall  have  been  paid  before  them  in  which  case 
the  tax  must  be  paid  on  delivery.  The  probate  court  may  extend  the  time 
on  good  cause  shown.  Taxes  on  grants  and  gifts  in  contemplation  of  death 
are  due  three  months  after  death  of  donor  or  when  beneficiary  takes  posses- 
sion if  he  does  so  before  the  three  months,  and  such  beneficiaries  must  file  an 
inventory  of  the  property  under  penalty  of  not  more  than  10  per  cent,  nor 
less  than  5  per  cent,  of  its  value  to  be  recovered  in  a  civil  action.  Taxes  not 
paid  when  due  bear  interest  from  that  date. 

§§  870-871.  Provide  for  reports  to  the  commissioner  of  state  taxes  by  the 
register  of  probate  as  to  estates  liable  to  the  tax. 

§  872.  Authorizes  the  commissioner  of  state  taxes  to  apply  for  administra- 
tion if  no  proceedings  have  been  brought  within  four  months  after  death. 

§  873.  Requires  the  register  of  probate  to  notify  the  commissioner  of  such 
cases. 

The  remaining  sections,  874  to  901,  refer  to  the  collection  of  taxes  on  non- 
residents and  are  now  obsolete  as  the  amendment  of  1912  imposes  such  taxes 
only  on  real  estate  within  the  state. 


VIRGINIA 

Taxes  property  of  non-residents  within  the  State. 

TABLE  OF  RATES  AND  EXEMPTIONS 


Graded  rates 

CLASS  OR  RELATIONSHIP 

Amount 
of 
exemp- 
tion 

In 

excess 
of 

$50,000 
to 

$250,000 
to 

In 
excess  of 

tion  to 

$250,000 

$1,000,000 

$1,000,000 

950,000 

Grandparents,  parents,  husband,  wife, 
brother,  sister  or  lineal  descendant. 

$15,000 

1% 

2% 

3% 

4% 

All  others  except  state,  county,  munic- 
ipal, benevolent,  charitable,  educa- 

None 

5% 

10% 

15% 

20% 

tional  or  religious  purposes  which 

are  exempted. 

778  INHERITANCE  TAXATION 

VIRGINIA  CODE  OF  1903,  AS  AMENDED  BY  LAWS  OP  igio,  CHAPTER 
148,  AND  LAWS  OF  1916,  CHAPTER  484  —  (APPROVED  MARCH  22, 
1916). 

§  44  (a).  Where  any  estate  in  this  commonwealth  of  any  decedent  shall 
pass  under  a  will  or  the  laws  regulating  descents  and  distributions  to  any 
person  or  for  the  use  of  any  person  the  estate  so  passing  shall  be  subject  to 
a  tax. 

The  subdivision  then  prescribes  the  rates  and  exemptions  as  shown  in  the 
foregoing  table. 

(6)  The  personal  representative  of  such  decedent  shall  pay  the  whole  of 
such  tax,  except  on  real  estate,  to  sell  which  or  to  receive  the  -rents  and 
profits  of  which  he  is  not  authorized  by  the  will,  and  the  sureties  on  his 
official  bond  shall  be  bound  for  the  payment  thereof. 

(c)  Where  there  is  no  personal  estate,  or  the  personal  representative  is 
not  authorized  to  sell  or  receive  the  rents  and  profits  of  the  real  estate,  the  tax 
shall  be  paid  by  the  devisee  or  devisees,  or  those  to  whom  the  estate  may 
descend  by  operation  of  law;  and  the  tax  shall  be  a  lien  on  such  real  estate, 
and  the  treasurer  may  rent  or  levy  upon  and  sell  so  much  of  said  real  estate 
as  shall  be  sufficient  to  pay  the  tax  and  expenses  of  sale,  etc. 

(d)  Such  payment  shall  be  made  to  the  treasurer  of  the  county  or  city  in 
which   certificate  was  granted   such  personal    representative   for   obtaining 
probate  of  the  will  or  letters  of  administration. 

(e)  The  corporation  or  hustings  court  of  a  city,  the  circuit  court  of  a 
county,  or  city,  the  chancery  court  of  the  city  of  Richmond,  the  law  and 
chancery  court  of  the  city  of  Norfolk,  or  the  clerk  of  the  circuit  court  of  a 
county  or  city,  before  whom  a  will  is  probated  or  administration  is  granted 
shall  determine  the  collateral  inheritance  tax,  if  any,  to  be  paid  on  the  estate 
passing  by  will  or  administration,  and  shall  enter  of  record  in  the  order  book 
of  the  court  or  clerk,  as  the  case  may  be,  by  whom  such  tax  shall  be  paid 
and  the  amount  to  be  paid.     The  clerk  of  the  court  shall  certify  a  copy  of 
such  order  to  the  treasurer  of  his  county  or  city  and  to  the  auditor  of  public 
accounts,  for  which  services  the  clerk  shall  be  paid  a  fee  of  two  dollars  and 
fifty  cents  by  the  personal  representative  of  the  estate.    The  auditor  of  public 
accounts  shall  charge  the  treasurer  with  the  tax,  and  the  treasurer  shall  pay 
the  same  into  the  treasury  as  soon  as  collected,  less  a  commission  of  five 
per  centum.     Every  personal  representative  or  other  party  or  officer  failing 
in  any  respect  to  comply  with  this  section  shall  forfeit  one  hundred  dollars. 

(/)  Any  personal  representative,  devisee  or  person  to  whom  the  estate  may 
descend  by  operation  of  law,  failing  to  pay  such  tax  before  the  estate  on 
which  it  is  chargeable  is  paid  or  delivered  over  (whether  he  be  applied  to 
for  the  tax  or  not)  shall  be  liable  to  damages  thereon  at  the  rate  of  ten  per 
centum  per  annum  for  the  time  such  estate  is  paid  or  delivered  over  until 
the  tax  is  paid,  which  damages  may  be  recovered,  with  the  tax,  on  motion 
of  the  commonwealth,  and  in  the  name  of  the  commonwealth  against  him  in 
the  circuit  court  for  the  county  or  in  the  corporation  court  of  the  city  wherein 
such  tax  was  assessed,  except  that  in  the  city  of  Richmond,  the  motion  shall  be 
in  the  chancery  court.  Such  estate  shall  be  deemed  paid  or  delivered  at  the 
end  of  a  year  from  the  decedent's  death,  unless  and  except  so  far  as  it  may 
appear  that  the  legatee  or  distributee  has  neither  received  such  estate,  nor 
is  entitled  then  to  demand  it.  All  taxes  upon  said  inheritance  paid  into  the 
state  treasury  shall  be  placed  to  the  credit  of  the  public  school  fund  of  the 
commonwealth  and  shall  be  apportioned  according  to  school  population  and 
be  used  for  the  primary  and  grammar  grades. 

Prior  Statutes:  Virginia  has  imposed  a  collateral  inheritance  tax  since 
1844  and  the  rate  was  5  per  cent,  on  such  collaterals  under  the  act  of  1903 
until  the  amendment  of  1916  which  prescribed  the  graded  rates  on  both  direct 
and  collateral  successions. 


THE  STATE  STATUTES 


779 


WASHINGTON 

Taxes  all  property  of  non-residents  within  the  state. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OR  RELATIONSHIP 

Amount  of 
exemption 

Rate  of  tax 

Father,  mother,  husband,  wife,  lineal  descendant, 
adopted  child  or  its  lineal  descendant. 

$10,000 

1  %  on  all  in  excess  of  exemption. 

Bequests  for  the  relief  of  aged,  indigent  and  poor 
people,  maintenance  of  sick  or  maimed  ;  support 
or  education  of  orphans  or  indigent  children. 

All 

No  tax. 

Collateral  heirs  to  and  including  the  third  degree 
of  relationship. 

None 

Up  to 

$50,000 

$50,000 
to 
$100,000 

In  excess 
of 
$100,000 

3% 

4i% 

6% 

All  others  

None 

6% 

9% 

12% 

LAWS  OF  1901,  CHAPTER  55,  AS  AMENDED  BY  LAWS  OF  1905,  CHAP- 
TERS 93,  "4  AND  115;  LAWS  OF  1907,  CHAPTER  217;  LAWS  OF 
1911,  PAGE  60;  AND  LAWS  OF  1917,  CHAPTER  146. 

Note:    The  1917  amendments  did  not  change  the  rates. 

Section  1.  (Code,  §  9182.)  All  property  within  the  jurisdiction  of  this 
state,  and  any  interest  therein,  whether  belonging  to  the  inhabitants  of  this 
state  or  not,  and  whether  tangible  or  intangible,  which  shall  pass  by  will  or 
by  the  statutes  of  inheritances  of  this  or  any  other  state,  or  by  deed,  grant, 
sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor  or  donor,  or  by 
deed,  grant  or  sale  or  gift  made  or  intended  to  take  effect  in  possession  or  in 
enjoyment  after  the  death  of  the  grantor  or  donor  to  any  person  in  trust 
or  otherwise,  shall,  for  the  use  of  the  state,  be  subject  to  a  tax  as  provided 
for  in  section  9183,  after  the  payment  of  all  debts  owing  by  the  decedent  at 
the  time  of  his  death,  the  local  and  state  taxes  due  from  the  estate  prior 
to  his  death,  and  a  reasonable  sum  for  funeral  expenses,  monument  or  crypt, 
court  costs,  including  cost  of  appraisement  made  for  the  purpose  of  assessing 
the  inheritance  tax,  the  fees  of  executors,  administrators  or  trustees,  reason- 
able attorney's  fees,  and  family  allowance  not  to  exceed  $1,000,  and  no  other 
sum,  but  said  debts  shall  not  be  deducted  unless  the  same  are  allowed  or 
established  within  the  time  provided  by  law,  unless  otherwise  ordered  by 
the  judge  or  court  of  the  proper  county,  and  all  administrators,  executors  and 
trustees,  and  any  such  grantee  under  a  conveyance,  and  any  such  donee 
under  a  gift,  made  during  the  grantor's  or  donor's  life,  shall  be  respectively 
liable  for  all  such  taxes  to  be  paid  by  them,  with  lawful  interest  until  the 
same  shall  have  been  paid.  The  inheritance  tax  shall  be  and  remain  a  lien 
on  such  estate  from  the  death  of  the  decedent  until  paid. 

§  2.  (L.  1911,  p.  60.)  Prescribes  the  rates  and  exemptions  of  the  foregoing 
table  except  as  to  charities  which  are  prescribed  by  another  statute. 

§  3.  (Code,  §  9184.)  Except  as  to  the  limitations  prescribed  in  section 
two  from  the  inheritance  tax  and  real  property  located  outside  the  state 
passing  in  fee  from  the  decedent  owner,  the  tax  imposed  under  section  two 
shall  hereafter  be  assessed  against  and  be  collected  from  property  of  every 
kind,  which  at  the  death  of  the  decedent  owner  is  subject  to,  or  thereafter, 
for  the  purpose  of  distribution,  is  brought  into  this  state  and  becomes  sub- 
ject to  the  jurisdiction  of  the  courts  of  this  state  for  distribution  purposes, 
or  which  was  owned  by  any  decedent  domiciled  within  the  state  at  the  time 
of  the  death  of  such  decedent,  even  though  the  property  of  said  decedent  so 
domiciled  was  situated  outside  of  the  state. 


780  INHERITANCE  TAXATION 

§  4.  (Code,  §  9185.)  In  case  of  any  property  belonging  to  a  foreign  estate, 
which  estate,  in  whole  or  in  part,  is  liable  to  pay  a  collateral  inheritance 
tax  in  this  state,  the  said  tax  shall  be  assessed  upon  the  market  value  of 
said  property  remaining  after  the  payment  of  such  debts  and  expenses  as  are 
chargeable  to  the  property  under  the  laws  of  this  state.  In  the  event  that 
the  executor,  administrator  or  trustee  of  such  foreign  estate  files  with  the 
clerk  of  the  court  having  ancillary  jurisdiction  and  with  the  state  board  of 
tax  commissioners  duly  certified  statements  exhibiting  the  true  market  value 
of  the  entire  estate  of  the  decedent  owner,  and  the  indebtedness  for  which  the 
said  estate  has  been  adjudged  liable,  which  statements  shall  be  duly  attested 
by  the  judge  of  the  court  having  original  jurisdiction,  the  beneficiaries  of 
said  estate  shall  then  be  entitled  to  have  deducted  such  proportion  of  the 
said  indebtedness  of  the  decedent  from  the  value  of  the  property,  as  the  value 
of  the  property  within  this  state  bears  to  the  value  of  the  entire  estate. 

§§  5,  6.   (Code,-§§  9186,  9187.)  Are  repealed  by  chapter  146,  Laws  1917. 

§  7.  (Code,  §  9188.)  Provides  for  the  valuation  of  life  estates  and  remaind- 
ers on  the  basis  of  the  Combined  Actuaries'  Mortality  Tables  at  4  per  cent. 
It  further  provides  that  remaindermen  may  defer  payment  of  the  tax  until 
they  come  into  possession  by  filing  a  bond  in  the  amount  of  the  tax  con- 
ditioned for  its  payment  within  60  days  after  coming  into  possession  of  the 
property. 

Code,  §§  9188-1  (added  by  L.  1917).  Provides  for  the  present  taxation  of 
contingent  remainders  at  the  lowest  possible  rate  requiring  the  transferee 
to  pay  the  difference  if  a  higher  rate  proves  to  be  due  when  the  remainder 
falls  in. 

§  8.  (Code,  §  9189.)  Taxes  bequests  to  executors  in  lieu  of  commissions 
above  reasonable  compensation. 

|  9.  (Code,  §  9190.)  Requires  the  heir  to  deduct  the  tax  where  a  legacy  is 
charged  upon  real  estate,  makes  the  tax  a  lien  and  may  be  enforced  in  the 
same  way  as  the  legacy. 

§  1O.  (Code,  §  9191.)  Requires  the  executor  or  administrator  to  deduct 
the  tax  or  collect  it  from  the  beneficiary  and  may  not  deliver  property  unless 
the  tax  is  paid. 

I  11.  (Code,  §  9192.)  All  taxes  imposed  by  this  act  shall  take  effect  and 
accrue  upon  the  death  of  the  decedent  or  donor.  If  such  tax  is  not  paid 
within  fifteen  months  from  the  accruing  thereof,  interest  shall  be  charged 
and  collected  at  the  rate  of  eight  per  centum  per  annum  unless  by  reason  of 
necessary  litigation  such  tax  cannot  be  determined  and  paid  as  herein  pro- 
vided, in  which  case  interest  at  the  rate  of  eight  per  centum  per  annum  shall 
be  charged  upon  such  tax  from  and  after  the  time  the  cause  of  such  delay 
is  removed.  In  all  cases  where  a  bond  shall  be  given  under  the  provisions 
of  section  9198  interest  shall  be  charged  at  the  rate  of  eight  per  centum  per 
annum  from  and  after  a  period  of  sixty  days  from  the  time  that  the  person 
or  persons  owning  the  beneficial  interest  come  into  the  possession  of  same 
until  the  payment  thereof.  (As  amended  by  L.  1917.) 

§  12.  (Code,  §  9193.)  Provides  for  the  appointment  of  appraisers  and  the 
usual  proceedings  before  them. 

§  13.  (Code,  §  9194.)  If  a  foreign  executor,  administrator  or  trustee  shall 
assign  any  corporate  stock,  or  obligations  in  this  state  standing  in  the  name 
of  a  decedent,  or  in  trust  for  a  decedent,  liable  to  such  tax,  the  tax  shall  be 
paid  to  the  state  treasurer  on  or  before  the  transfer  thereof,  otherwise,  the 
corporation  permitting  its  stock  to  be  so  transferred  on  its  books  shall  be 
liable  to  pay  such  tax.  No  safe  deposit  company,  bank  or  other  institution, 
person  or  persons,  holding  any  securities,  property  or  assets  of  any  non- 
resident decedent,  shall  deliver  or  transfer  the  same  to  any  non-resident 
executor,  administrator  or  representative  of  such  decedent,  until  after  a 
notice  in  writing  of  the  time  and  place  of  such  transfer  shall  have  been  duly 
given  the  state  board  of  tax  commissioners  at  least  ten  (10)  days  prior 
thereto,  and  the  tax  imposed  by  this  act  paid  thereon,  and  every  such  safe 
deposit  company,  bank  or  other  institution,  person  or  persons,  shall  be  liable 
for  the  payment  of  such  tax. 


THE  STATE  STATUTES  781 

§  14.  (Code,  9195.)  Requires  the  petitioner  in  all  probate  proceedings  to 
furnish  a  list  of  heirs  or  beneficiaries  together  with  an  inventory. 

§  15.  (Code,  §  9196.)  Authorizes  the  court  to  extend  the  time  for  filing 
the  inventory. 

§  16.    ( Code,  §  9197. )    Provides  for  the  compounding  of  doubtful  tax  claims. 

§  9197-1.  When  any  person  dies  leaving  property  within  the  jurisdic- 
tion of  the  State  of  Washington,  which  shall  pass  by  the  statutes  of  inherit- 
ance of  this  or  any  other  state,  or  by  deed,  grant,  sale  or  gift  made  in  con- 
templation of  the  death  of  the  grantor  or  donor,  or  by  deed,  grant,  sale  or 
gift  made  or  intended  to  take  effect  in  possession  or  in  enjoyment  after  the 
death  of  the  grantor  or  donor,  to  any  person  in  trust  or  otherwise,  and 
there  has  been  no  application  for  letters  of  administration  of  the  estate  of 
such  deceased  person,  or  when  administration  of  any  estate  has  been  com- 
pleted without  an  adjudication  of  the  inheritance  tax,  the  liability  of  such 
property  for  the  payment  of  an  inheritance  tax  may  be  determined  without 
administration  in  the  manner  hereinafter  provided. 

When  any  person  interested  in  such  property  shall  deem  the  same  not 
subject  to  an  inheritance  tax,  or  when  he  admits  the  liability  for  such  tax 
but  desires  to  adjust  the  same,  he  may  file  a  petition  in  the  superior  court 
of  the  proper  county  to  determine  the  questions  arising  under  the  inherit- 
ance tax  statutes.  Such  petition  shall  contain  the  name  and  date  of  death 
o.f  decedent,  the  description  and  estimated  value  of  all  property  involved,  the 
names  and  places  of  residence  of  all  persons  interested  in  the  same,  and 
such  other  facts  as  are  necessary  to  give  the  court  jurisdiction.  The  court 
shall  thereupon  set  a  day  for  hearing  said  petition  and  a  copy  thereof, 
together  with  a  notice  of  the  time  and  place  of  such  hearing,  shall  be  served 
by  the  petitioner  or  his  attorney  upon  the  state  board  of  tax  commissioners 
and  on  each  person  interested  in  said  property,  at  least  twenty  days  before 
the  date  of  hearing,  if  served  personally,  and  if  served  by  publication  the 
service  shall  be  the  same  as  the  service  of  summons  by  publication  in  civil 
actions. 

The  court  shall  hear  said  matter  upon  the  relation  of  the  parties,  the 
testimony  of  witnesses  and  evidence  produced  in  open  court,  and,  if  it  shall 
be  found  that  the  property  is  not  subject  to  any  tax,  the  court  shall  make 
and  enter  an  order  determining  that  fact;  but,  if  it  shall  appear  that  the 
whole  or  any  part  of  said  property  is  subject  to  a  tax,  the  same  shall  be 
appraised  and  the  tax  levied  and  collected  as  in  other  cases.  An  adjudica- 
tion by  the  superior  court,  as  herein  provided,  shall  be  conclusive  as  to  the 
lien  of  said  tax,  subject  to  the  right  of  appeal  to  the  supreme  court  allowed 
by  the  laws  of  the  state.  (Added  by  chap.  146,  L.  1917.) 

fr  17.  (Code,  §  9198.)  Requires  the  state  board  of  tax  commissioners  to  take 
general  supervision  over  the  collection  of  tax  claims. 

§  18.  (Code,  §  9199.)  Prescribes  the  charitable  exemptions  shown  in  the 
table  of  rates. 


INHERITANCE  TAXATION 


WEST  VIRGINIA 

Taxes  all  property  of  non-residents  within  the  state. 
TABLE  OF  RATES  AND  EXEMPTIONS 


Graded  rates 

CLASS  OR  RELATIONSHIP 

Amount  of 
exemption 

Above 
exemp- 

$25,000 

$50,000 

$100,000 

In 

tion 

to 

to 

to 

up  to 
$25,000 

$50,000 

$100,000 

$500,000 

$500,000 

Wife,    husband,    child,    lineal 
descendant  or  lineal  ances- 

Widow, $15,000; 
others,  $10,000 

1% 

11% 

2% 

21% 

3% 

tor. 

Brother  or  sister  of  the  whole 

None  

3% 

41% 

6 

71% 

9% 

blood. 

All   others    except    charitable 

None  

5.% 

71% 

10% 

121% 

15% 

bequests. 

Bequests  to  be  used  within  the 

All  

No  tax. 

state  for  education,  literary, 

scientific,  religious  or  chari- 

table purposes  or  to  state, 

county    or    municipal    cor- 
porations   for    public    pur- 

poses. 

LAWS  OF  1904,  CHAPTER  6,  AS  AMENDED  BY  LAWS  OF  1907,  CHAPTER 
55;  LAWS  OF  1909,  CHAPTER  63,  AND  LAWS  OF  1913,  CHAPTER  25. 
Section  1.  A  tax,  payable  into  the  treasury  of  the  state,  shall  be  imposed 

upon  the  transfer,  in  trust  or  otherwise,  of  any  property,  or  interest  therein, 

real,  personal  or  mixed,  if  such  transfer  be, 

(a)  By  will  or  by  the  laws  of  this  state  regulating  descents  and  distri- 
butions from  any  person  who  is  a  resident  of  the  state  at  the  time  of  his 
death  and  who  shall  die  seized  or  possessed  of  the  property; 

(b)  By  will  or  by  laws  regulating  descents  and  distributions,  of  property 
within  the  state,  or  within  its  jurisdiction,  and  the  decedent  was  a  non- 
resident of  the  state  at  the  time  of  his  death; 

(c)  By  a  resident,  or  be  of  property  within  the  state,  or  within  its  juris- 
diction, by  a  non-resident,  by  deed,  grant,  bargain,  sale  or  gift  made  in  con- 
templation  of   the   death  of   the   grantor,   vendor,   bargainer    or    donor,    or 
intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such  death. 

(d)  If  any  person  shall  transfer  any  property  which  he  owns  or  shall 
cause  any  property,  to  which  he  is  absolutely  entitled  to  be  transferred  to,  or 
vested  in,  himself  and  any  other  person  jointly,  so  that  the  title  therein,  or 
in  some  part  thereof,  vest  no  survivorship  in  such  other  person,  a  transfer 
shall  be  deemed  to  occur  and  to  be  taxable  under  the  provisions  of  this  act 
upon  the  vesting  of  such  title. 

(e)  Whenever   a  person    shall  exercise  by  will   a  power  of   appointment 
derived   from   any  disposition  of   property,   such   appointment,   when   made, 
shall  be  deemed  a  transfer  taxable  under  the  provisions  hereof. 

§  2.  Prescribes  the  rates  and  exemptions  shown  in  the  foregoing  table. 

§  3.  Provides  for  the  deduction  from  market  value  of  estate  of  debts  and 
incumbrances  created  by  the  deceased  on  good  faith  and  for  which  no  reim- 
bursements can  be  obtained. 

§  4.  Taxes  bequests  ostensibly  in  payment  of  a  debt  over  and  above  the 
true  value  of  the  debt  and  bequests  to  executors  in  lieu  of  commissions  in 
excess  of  reasonable  value  of  their  services. 

§  5.  Provides  for  the  apportionment  of  the  tax  between  life  tenant  and 


THE  STATE  STATUTES  783 

remaindermen  by  the  state  tax  commissioners  and  remaindermen  must  pay 
at  the  same  time  and  manner  as  though  vested  in  possession. 

§  6.  A  transfer  of  personal  property  of  a  resident  of  the  state  which  is 
not  therein  or  within  the  jurisdiction  thereof,  at  the  time  of  his  death,  shall 
not  be  taxable,  under  the  provisions  of  this  act  if  such  transfer  or  the  prop- 
erty be  legally  subject  in>  another  state  or  country  to  a  tax  of  a  like  character 
and  amount  to  that  hereby  imposed,  and  if  such  tax  be  actually  paid  or 
guaranteed  or  secured,  in  accordance  with  the  law  in  such  other  state  or 
country,  if  legally  subject  in  another  state  or  country  to  a  tax  of  like  char- 
acter, but  of  less  amount  than  that  hereby  imposed  and  such  tax  be  actually 
paid  or  guaranteed  or  secured,  as  aforesaid,  the  transfer  of  such  property 
shall  be  taxable  under  this  act  to  the  extent  of  the  difference  between  the 
tax  thus  actually  paid,  guaranteed  or  secured,  and  the  amount  for  which 
such  transfer  would  otherwise  be  liable  hereunder,  or  within  the  jurisdiction 
thereof. 

The  provisions  of  this  act  shall  apply  to  the  transfer  of  the  following  prop- 
erty belonging  to  deceased  persons,  non-residents  of  this  state  which  shall 
pass  by  will  or  inheritance  under  the  law  of  any  other  state  or  country,  and 
such  property  shall  be  subject  to  the  tax  imposed  by  this  section,  to-wit: 

(a)  The  transfer  of  all  real  estate  and  tangible  personal  property,  includ- 
ing money  on  deposit  in  this  state; 

(b)  The  transfer   of  all   intangible  personal   property,   including  bonds, 
securities,  shares  of  stock  and  choses  in  action,  the  evidence  of  ownership  to 
which  shall  be  actually  withim  this  state;  and 

( c )  The  transfer  of  the  shares  of  capital  stock  of  all  corporations  organized 
and  existing  under  the  laws  of  this  state,  the  certificates  of  which  shares  of 
stock  shall  be  within  or  without  this  state. 

The  transfer  of  any  property  mentioned  in  sub-divisions  (a)  and  (b)  and 
the  t-ansfer  of  the  shares  of  stock  mentioned  in  subdivision  (c)  of  this 
section,  after  the  decease  of  the  person  owning  the  same,  shall  not  be  legal 
until  the  inheritance  or  transfer  tax  has  been  paid  into  the  state  treasury  and! 
a  certificate  of  release  to  that  effect  executed  by  the  state  tax  commissioner. 
No  corporation  organized  or  existing  under  the  laws  of  this  state  shall  trans- 
fer any  such  shares  of  stock,  unless  notice  of  the  time  of  such  intended  transfer 
is  served  upon  the  state  tax  commissioner  at  least  fifteen  days  prior  to  such 
transfer  or  until  the  state  tax  commissioner  shall  consent  in  writing  thereto. 
Any  such  corporation  making  the  transfer  of  any  such  shares  of  stock  before 
the  inheritance  tax  is  paid,  or  before  obtaining  the  consent  of  the  state  tax 
commissioner  thereto,  shall  be  liable  to  the  state  of  West  Virginia  for  said  tax, 
together  with  any  interest  that  may  accrue  thereon,  and  in  addition  thereto  a 
penalty  of  five  hundred  dollars;  which  liability  for  such  tax  and  interest  and 
penalty  may  be  enforced  by  a  proper  action  in  the  name  of  the  state  of  West 
Virginia. 

§  7.  Makes  the  tax  a  lien,  forbids  transfer  of  property  without  its  pay- 
ment, and  if  so  transferred  makes  executors,  administrators  and  beneficiaries 
personally  liable  and  declares  that  no  statute  of  limitation  shall  be  a  defense 
to  recovery. 

§  8.  Provides  for  suspending  the  whole  or  a  proportionate  part  of  the  tax 
pending  litigation  or  settlement  of  a  doubtful  claim. 

§  9.  Makes  the  tax  due  on>  assessment  and  charges  interest  at  4  per  cent 
from  time  when  due. 

§  10.  Provides  for  payment  of  the  tax  and  sale  of  property  in  the  same 
manner  as  debts. 

§  11.  Whenever  any  foreign  executor,  administrator  or  trustee  shall  assign. 
or  transfer  in  this  state  any  stock,  bond  or  other  security  liable  to  any  such 
tax,  standing  in  the  name  of,  or  in  trust  for  a  decedent,  he  shall  have  the  tax 
assessed  on  such  transfer  by  the  state  tax  commissioner,  and  shall  pay  the  tax 
into  the  state  treasury  on  the  transfer  thereof;  otherwise  any  person  having 
authority  to  make  or  permit  such  transfer,  who  shall  make  or  permit  it,  shall 
be  liable  to  pay  the  tax  if  he  then  had  knowledge,  or  reasonable  cause1  to 
believe,  that  the  property  was  liable  to  tax. 

§  13.  Provides  for  reports  by  clerk  of  county  court  regarding  transfers 
subject  to  tax. 


784 


INHERITANCE  TAXATION 


§  13.  Requires  executors,  administrators  and  trustees  to  file  with  their 
inventory  a  statement  as  to  any  of  the  property  they  believe  to  be  subject 
to  tax. 

§  14.  The  state  tax  commissioner  shall  as  soon  as  may  be,  from  the  state- 
ments and  reports  made  by  the  clerk  and  the  personal  representative  or  trustee 
or  other  person  as  aforesaid,  from  the  inventory  of  the  estate,  if  there  be  one, 
and  from  such  other  information  as  he  may  be  able  to  procure,  ascertain 
whether  any  transfer  of  any  property  be  subject  to  a  tax  under  the  provisions 
of  this;  chapter,  and,  if  it  be  subject  to  tax,  shall  ascertain  and  assess  the 
amount  of  the  tax  to  which  it  is  subject.  If  in  his  opinion  the  transfer  of  any 
of  the  property  so  transferred  is  taxable  under  the  provisions  of  this  act,  he 
shall  make  his  certificate  to  that  effect,  setting  out: 

(a)  The  amount  of  such  property  liable  to  such  tax. 

( b )  The  rate  of  tax  thereon. 

(c)  The  names  of  the  beneficiaries  thereof. 

( d )  Their  degree  of  relationship  to  the  decedent, 

(e)  The  amount  of  tax;  and  it  shall  be  the  duty  of  the  county  clerk  and 
personal  representative  of  every  such  estate,  and  if  there  be  no  personal  repre- 
sentative the  beneficiaries  thereof  to  show  in  their  report  to  the  state  tax  com- 
missioner, the  information  upon  which  to  base  such  assessment.    The  state  tax 
commissioner  shall  make  duplicate  certificates  of  his  assessment,  one  of  which 
he  shall  forward  to  such  personal  representative,  trustee,  grantee,  vendee  or 
bargainee. 

If  the  tax  is  not  paid  within  thirty  days  after  the  assessment  thereof,  the 
state  tax  commissioner  may  forward  the  other  certificate  to  the  clerk  of  the 
county  court  of  the  county  wherein  the  property  or  the  greater  part  thereof  in 
value  is  located,  which  certificate  shall  be  recorded  by  the  clerk  in  the  trust 
deed  book  in  his  office.  For  recording  such  certificate  of  assessment  the  clerk 
shall  charge  a  fee  of  fifty  cents  to  be  paid  out  of  the  estate. 

§  16.  Provides  for  the  appointment  of  appraisers  and  the  proceedings  before 
them,  and  the  remaining  sections  17  to  26  provide  for  reports,  compounding 
of  uncertain  tax  claims,  fees,  records  and  proceedings  for  the  collection  of 
delinquent  taxes. 

WISCONSIN 

Taxes  all  property  of  non-residents  within  the  state. 

TABLE  No.  1.— TABLE  OF  RATES  AS  FIXED  BY  CHAPTER  320,  LAWS  1917,  IN 

EFFECT  JUNE  1 


Above 

Amount 

exemp- 

$25,000 

$50,000 

$100,000 

In 

CLASS  OR  RELATIONSHIP 

of 

tion 

to 

to 

to 

excess 
of 

exemption 

to 

$25,000 

$50,000 

$100,000 

$500,000 

$500,000 

Husband,    wife,   lineal  issue, 

Widow,  $10,000; 

1% 

2% 

3% 

4% 

5% 

lineal  ancestor,  adopted  or 

others,  $2,000. 

mutually         acknowledged 

child,  or  its  issue. 

Brother,   sister,  or  their  de- 

$500 

2% 

4% 

6% 

8% 

10% 

scendants,              son-in-law, 
daughter-in-law. 

Aunt  or  uncle  and  their  de- 

$250 

3% 

6% 

9% 

12% 

15% 

scendants. 

Brother  or  sister  of  grand  par- 

$150 

4% 

8% 

12% 

16% 

20% 

ents  and  their  descendants. 

All     others     except     exempt 

$100 

5% 

10% 

15% 

20% 

25% 

charitable    and    public    be- 

quests. 

THE  STATE  STATUTES 


785 


XOTB. —  (a)  The  Statute  (Chapter  320,  L.  1917)  provides:  "No  such  tax, 
however,  shall  exceed  15  per  cent,  of  the  property  transferred  to  any  bene- 
ficiary. This  abolishes  the  excessive  rates  shown  in  the  last  two  columns 
and  their  only  effect  is  on  the  trifling  exemption. 

(b)  The  charitable  bequests  exempted  are  shown  in  Table  No.  2. 

(c)  This    further    reciprocal    exemption    is    provided.      No    tax    sttall    be 
imposed   upon  any  tangible  personal  "property  of  a  resident  decedent  when 
such  property  is  located  without  this  state,  and  when  the  transfer  of  such 
property  is  subject  to  an  inheritance  or  transfer  tax  in  the  state  where  located 
and  which  tax  has  actually  been  paid,  provided  such  property  is  not  without 
this  state  temporarily  nor  for  the  sole  purpose  of  deposit  or  safekeeping;  and 
provided  the  laws  of  the  state  where  such  property  is  located  allow  a  like 
exemptipn  in  relation  to  such  property  left  by  a  resident  of  that  state  and 
located  in  this  state. 

TABLE  No.  2.—  TABLE  OF  RATES  AND  EXEMPTIONS 
In  effect  prior  to  June,  1917 


Graded  rates 

CLASS  OR  RELATIONSHIP 

Amount  of 
exemption 

Above 
exemp- 

$25.000 

$50.000 

$100.000 

ID 

tion 

to 

to 

to 

excess 

up  to 

$25,000 

$50,000 

$100,000 

$500,000 

of 
$500,000 

Husband,    wife,    lineal    issue, 

Widow,  $10,000; 

1% 

H% 

2% 

2J% 

3% 

lineal  ancestor,  adopted  or 

others,  $2,000. 

mutually          acknowledged 

child  or  its  issue. 

Brother,   sister    or    their    de- 

$500 

u% 

2J% 

3% 

31% 

4J% 

scendants,             son-in-law, 

daughter-in-law. 

Aunt,  or  uncle  and  their  de- 

$250 

3% 

4i% 

6% 

7i% 

9% 

scendants. 

Brother    or   sister  _  of    grand- 

$150 

4% 

6% 

8% 

10% 

12% 

parents  and  their  descend- 

ants. 

All    others    except    charitable 

$100 

5% 

7i% 

10% 

12J% 

15% 

and  public  bequests. 

Municipal     corporations     for 

All 

No  tax. 

strictly    town,     county    or 

municipal     purposes,     cor- 

porations   organized    under 

laws  of  the  state,  solely  for 

religious,  charitable  or  edu- 

cational    purposes,      which 

•hall  use  the  property  solely 
for  those  purposes. 

THE  STATUTE 

Wisconsin  has  a  much  amended  statute.  The  law  is  constituted  by  chapters 
44  and  249,  Laws  of  1903,  chapter  96,  Laws  of  1905,  chapter  500,  and  section 
36,  chapter  660,  Laws  of  1907,  and  chapters  38  and  504,  Laws  of  1909,  chap- 
ters 450  and  530,  Laws  of  1911,  chapters  627,  643,  763  and  773,  Laws  of  1913. 
[As  amended  by  chapters  253  and  498,  Laws  of  1915,  and  chapters  318,  319, 
320,  321  and  322,  Laws  of  1917.] 

The  1915  amenuments:  Chapter  253,  Laws  of  1915,  took  insurance  money 
payable  upon  death  from  under  the  operation  of  the  income  tax,  and  made  it 
subject  to  the  inheritance  tax  as  a  part  of  the  estate  of  the  decedent.  Chapter 
4&S,  Laws  of  1915,  provided  for  incorporation  of  trustees  to  whom  a  charitable, 
religous  or  educational  bequest  had  been  left  within  two  years  after  death. 
This  amendment  is  in  substance  repealed,  and  the  law  changed  substantially  to 
what  it  had  been  theretofore  by  chapter  321  of  1917. 
.The  1917  amendments:  Chapter  321,  as  already  shown,  merely  repeals  an 


786  INHERITANCE  TAXATION 

amendment  of  1915  as  to  charitable  corporations.  Chapter  320  prescribes  the 
new  rates  as  shown  in  the  table.  Chapter  318  merely  prescribes  that  increases 
during  administration  shall  not  be  included  in  the  valuation  of  the  estate. 
This  was  made  necessary  by  the  decision  in  Matter  of  Kempsmith,  161  Wis. 
389.  It  makes  no  change  in  the  law,  but  construes  it  in  conformity  with  the 
general  theory  of  inheritance  taxation  that  the  tax  accrues  at  death. 

Chapter  319  provides  that  the  exemption  of  $10,000  to  the  widow  shall 
"include  her  statutory  and  other  allowances."  (To  meet  the  case  of  Smith  v. 
State,  161  Wis.  558.) 

Chapter  322  follows  the  example  of  New  York,  California  and  the  Federal 
government  in  taxing  transfers  at  the  death  of  one  joint  tenant  or  tenants. 

Prior  to  June  of  the  present  year  (1917)  none  of  these  amendments  were 
effective. 

THE  ACT  AS  AMENDED 

|  1087.  A  tax  shall  be  and  is  hereby  imposed  upon  any  transfer  of  prop- 
erty, real,  personal  or  mixed,  or  any  interest  therein,  or  income  therefrom  in 
trust  or  otherwise,  to  any  person,  association  or  corporation,  except  county, 
town  or  municipal  corporations  within  the  state,  for  strictly  county,  town  or 
municipal  purposes,  and  corporations  or  this  state  organized  under  its  laws 
solely  for  religious,  charitable  or  educational  purposes,  which  shall  use  the 
property  so  transferred  exclusively  for  the  purposes  of  their  organization, 
within  the  state,  in  the  following  cases,  except  as  hereinafter  provided: 

1.  When  the  transfer  is  by  wilr"  or  by  the  intestate  laws  of  this  state  from 
any  person  dying  possessed  of  the  property  while  a  resident  of  the  state. 

2.  When  a  transfer  is  by  will  or  intestate  law,  of  property  within  the  state 
or  within  its  jurisdiction  and  the  decedent  was  a  non-resident  of  the  state  at 
the  time  of  his  death. 

3.  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  non-resident 
when  such  non-resident's  property  is  within  this  state,  or  within  its  jurisdic- 
tion, by  deed,  grant,  bargain,  sale  or  gift,  made  in  contemplation  of 'the  death 
of  the  grantor,,  vendor  or  donor,  or  intended  to  take  effect  in  possession  or 
enjoyment  at  or  after  such  death.    Every  transfer  by  deed,  grant,  bargain,  sale 
or  gift,  made  within  six  years  prior  to  the  death  of  the  grantor,  vendor  or 
donor,  of  a  material  part  of  his  estate,  or  in  the  nature  of  a  final  disposd- 
tion  or  distribution  thereof,  and  without  an  adequate  valuable  consideration, 
shall  be  construed  to  have  been  made  in  contemplation  of  death  within  the 
meaning  of  this  section. 

4.  Such  tax  shall  be  imposed  when  any  such  person  or  corporation  becomes 
beneficially  entitled,  in  possession  or  expectancy,  to  any  property  or  the  income 
thereof,  by  any  such  transfer  whether  made-  before  or  after  the  passage  of  this 
act;    provided,  that  property  or  estates  which  have  vested  in  such  persons  or 
corporations  before  this  act  shall  take  effect,  shall  not  be  subject  to  a  tax;  and 
provided,  further,  that  contingent  interests  created  by  the  will  of  any  person 
who  died  prior  to  the  passage  of  this  act  shall  not  be  taxed. 

5.  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appoint- 
ment derived  from  any  disposition  of  property,  made  either  before  or  after 
the  passage  of  sections   1087 — 1   to   1087 — 24,   inclusive,   such   appointment, 
when  made,  shall  be  deemed  a  transfer  taxable  under  the  provisions  of  sec- 
tions 1087 — 1  to  1087 — 24,  inclusive,  in  the  same  manner  as  though  the  prop- 
erty to  which  such  appointment  relates  belonged  absolutely  to  the  donee  of 
such  power,  and  had  been  bequeathed  or  devised  by  such  donee  by  «vill;  and 
whenever  any  person  or  corporation  possessing  such  a  power  of  appointment 
so  derived  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided 
therefor,  in  whole  or  in  part,  a  transfer  taxable  under  the  provisions  of  sec- 
tions 1087 — 1  to  1087 — 24,  inclusive,  shall  be  deemed  to  take  place  to  the 
extent  of  such  omission  or  failure,  in  the  same  manner  as  though  the  persons 
or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoyment  of 
the  property  to  which  such  power  related  had  succeeded  thereto  by  a  will  of 
the  donee  of  the  power  failing  to  exercise  such  power,  taking  effett  at  the  time 
of  such  omission  or  failure. 


THE  STATE  STATUTES  787 

6.  Whenever  any  property,  real  or  personal,  is  held  in  the  joint  names  of 
two  or  more  persons,  or  as  tenants  by  the  entirety,  or  is  deposited  in  banks-  or 
other  institutions  or  depositories  in  the  joint  names  of  two  or  more  persons 
and  payable  to  either  or  the  survivor,  upon  the  death  of  one  of  such  persons 
the  right  of  the  surviving  tenant  by  the  entirety,  joint  tenant  or  joint  tenants, 
person  or  persons,  to  the  immediate  ownership  or  possession  and'  enjoyment  of 
such  property  shall  be  deemed  a  transfer  of  one-half  or  other  proper  fraction 
thereof  taxable  under  the  provisions  of  this  chrapter  in  the  same  manner  as 
though  the  property  to  which  such  transfer  relates  belonged  to  the  tenants  by 
the  entirety,  joint  tenants  or  joint  depositors  as  tenants  in  common,  and  had 
been  bequeathed  or  devised  to  the  surviving  tenant  by  the  entirety,  joint  tenant 
or  joint  tenants,  person  or  persons,  by  such  deceased  tenant  by  the  entirety, 
joint  tenant  or  joint  depositor,  by  will.    [This  subd.  added  by  ch.  322,  L.  1917.] 

7.  The  tax  so  imposed  shall  be  upon-  the  clear  market  value  of  such  property 
at  the  rates  hereinafter  prescribed  and  only  upon  the  excess  of  the  exemptions 
hereinafter  granted. 

§  1087.  (Subdivisions  2,  3  and  4  as  amended.)  Prescribe  the  rates  and 
exemptions  set  forth  in  the  foregoing  tables  (No.  1  and  No.  2). 

§  1087  (5).  Provides  that  the  tax  shall  be  a  lien  upon- the  property  trans- 
ferred, and  holds  executors  and  administrators  personally  liable  until  it  is 
paid.  It  provides  for  receipts  which  must  be  produced  on  final  accounting,  and 
there  can  be  no  settlement  of  the  account  unless  such  a  receipt  is  produced-  or 
a  bond  has  been  filed. 

§  1087  (6).  Allows  a  discount  of  5  per  cent  if  the  tax  is  paid  within  one 
year.  After  eighteen  months  10  per  cent  interest  is  charged  from  the  date  of 
accrual,  which  may  be  reduced  to  six  in  case  of  unavoidable  delay.  When  a 
bond  is  filed  the  interest  is  at  the  rate  of  6  per  cent  from  the  date  of  accrual* 
to  the  date  of  payment. 

§  1087  ( 7 ) .  Gives  executors  and  administrators  power  of  sale  to  pay  the  tax 
in  the  same  -way  as  to  pay  debts,  requires  them  to  deduct  the  tax  if  the  prop- 
erty is  in  money;  if  not  to  collect  it  from  the  beneficiary,  to  whom  no  delivery 
may  be  made  until  the  tax  has  been  paid.  If  "the  legacy  is  charged  on  real 
estate  the  heir  must  deduct  the  tax  which  remains  a  lien  until  paid,  and  may 
be  enforced  in  the  same  manner  as  the  legacy  or  by  the  district-attorney.  If 
the  legacy  is  given  for  a  limited  period  and  is  in  money  the  tax  shall  be 
deducted  from  the  whole  amount,  but  if  in  property  an  application  must  be 
made  to  the  court  for  an  apportionment  of  the  tax  among  the  beneficiaries. 

§  1087  (8).  Provides  for  proportionate  refund  where  debts  have  been 
proved  against  the  estate  after  distribution  and  refunds  of  erroneous  or  excess 
payments. 

§  1087  (9) .  Provides  that  remaindermen  may  elect  within  one  year  to  defer 
payment  until  they  come  into  possession  by  filing  a  bond  in  three  times  the 
amount  of  the  tax,  with  a  sworn  inventory  of  the  property,  and  renewing  the 
bond  every  five  years. 

§  1087  (10).  Taxes  bequests  to  executors  in  lieu  of  commissions  in  excess  of 
reasonable  compensation. 

§  1087  (11).  1.  If  a  foreign  executor,  administrator,  or  trustee  shall  assign 
or  transfer  any  stock  or  obligations  in  this  state  standing  in  the  name  of  a 
decedent  or  in  trust  for  .a  decedent,  liable  to  .any  such  tax,  the  tax  shall  be 
paid  to  the  treasurer  of  the  proper  county  or  the  state  treasurer  on  the  trans- 
fer thereof.  2.  No  safe  deposit  company,  bank,  or  other  institution,  person  or 
persons,  holding  securities  or  assets  of  a  non-resident  decedent,  nor  any  foreign 
or  domestic  corporation  doing  business  within  this  state  in  which  a  non- 
resident decedent  held  stock  at  his  decease,  shall  deliver  or  transfer  the  same 
to  the  executors,  administrators  or  legal  representatives  of  said  decedent,  or 
upon  their  order  or  request,  unless  notice  of  the  time  and  place  of  such  in- 
tended transfer  be  served  upon  the  tax  commission  and  public  administrator  at 
least  ten  days  prior  to  the  said  transfer;  nor  shall  such  safe  deposit  com- 
pany, bank,  or  other  institution,  person  or  persons,  nor  any  foreign  or  domestic 
corporation,  deliver  or  transfer  any  securities  or  assets  of  the  estate  of  a  non- 
resident decedent  without  retaining  a  sufficient  portion  or  amount  thereof  to 
pay  any  tttx  which  may  thereafter  be  assessed  on  account  of  the  transfer  of 


788  INHERITANCE  TAXATION 

such  securities  or  assets  under  the  provisions  of  the  inheritance  tax  laws,  with- 
out an  order  from  the  proper  court  authorizing  such  transfer ;  and  it  shall  be 
lawful  for  the  tax  commission  or  public  administrator,  personally  or  by  repre- 
sentative, to  examine  said  securities  or  assets  at  any  time  before  such  delivery 
or  transfer.  Failure  to  serve  euch  notice  or  to  allow  such  examination  or 
to  retain  a  sufficient  portion  or  amount  to  pay  such  tax  as  herein  provided, 
shall  render  said  safe  deposit  company,  trust  company,  bank,  or  other  institu- 
tion, person  or  persons,  or  such  foreign  or  domestic  corporation,  liable  to  the 
payment  of  the  tax  due  upon  said  securities  or  assets  in  pursuance  of  the 
provisions  of  the  inheritance  tax  laws.  The  tax  commission  may  issue  a 
certificate  authorizing  the  transfer  of  any  such  stock,  securities  or  assets  when- 
ever it  appears  to  the  satisfaction  of  the  commission  that  no  tax  is  due  thereon. 
3.  Where  stocks,  bonds,  mortgages,  or  other  securities  of  corporations  organ- 
ized under  the  laws  of  this  state  or  of  foreign  corporations  owning  property 
or  doing  business  in  this  state  shall  have  been  transferred  by  a  non-resident 
decedent,  the  tax  shall  be  upon  such  proportion  of  the  value  thereof  as  the 
property  of  such  corporation  in  this  state  bears  to  the  total  property  of  the 
corporation  issuing  such  stocks,  bonds,  mortgages,  or  other  securities.  4.  If 
any  stocks,  bonds,  mortgages,  or  other  securities  of  a  holding  company  or 
other  corporation  are  based  upon  or  represent  in  whole  or  in  part  the  value 
of  any  stocks,  bonds,  mortgagee,  or  other  securities  of  a  Wisconsin  corpora- 
tion or  a  corporation  owning  property  in  this  state,  either  directly  or  indi- 
rectly, the  transfer  of  the  stocks,  bonds,  mortgages,  or  other  securities  of 
such  holding  company  or  other  corporation  shall  be  subject  to  the  inheritance 
tax  in  the  proportion  which  the  Wisconsin  property  bears  to  the  total  property 
represented  by  or  subject  to  the  total  stocks,  bonds,  mortgages,  or  other 
securities  of  which  those  so  transferred  are  a  part.  5.  Whenever  a  tax  is  due 
from  any  resident  or  non-resident  upon  the  transfer  of  any  property  or  estate 
which  is  partly  within  and  partly  without  this  state,  or  upon  any  stocks, 
bonds,  mortgages,  or  other  securities  representing  any  such  property  partly 
within  and  partly  without  this  state,  such  person  shall  be  entitled  to  deduct 
from  the  value  of  such  property  so  transferred  only  a  proportion  of  the  debts, 
expenses  of  administration  and  exemptions,  equal  to  the  proportion  which  the 
Wisconsin  property  bears  to  the  entire  estate  of  the  decedent.  6.  The  tax 
commission  shall  require  such  reports  and  information,  and  shall  make  such 
orders,  rules,  and  regulations  as  it  may  deem  necessary  to  enable  the  commis- 
sion to  secure  the  necessary  information  from  corporations,  domestic  and 
foreign,  and  to  ascertain  the  amount  of  and  collect  such  tax;  and  no  holding 
company  or  other  corporation  subject  to  the  provisions  of  this  section  shall 
deliver  or  transfer  any  such  stocks,  bonds,  mortgages,  or  other  securities  of  a 
non-resident  decedent  based  upon  or  representing  in  whole  or  in  part,  directly 
or  indirectly,  the  value  of  Wisconsin  property,  or  stocks,  bonds,  mortgages,  or 
other  securities  of  a  Wisconsin  corporation  or  a  corporation  owning  property 
in  this  state,  without  retaining  a  sufficient  portion  or  amount  thereof  to  pay 
any  tax  which  may  thereafter  be  assessed  on  account  of  such  transfer,  except 
upon  order  of  the  proper  court  or  a  certificate  of  the  tax  commission. 
7.  Any  corporation  or  holding  company  violating  the  provisions  of  this  section 
shall  be  liable  to  the  state  for  the  amount  of  the  tax ;  and  for  willful  violation 
of  its  provisions  shall  forfeit  its  charter  or  its  license  to  do  business  within 
this  state  upon  complaint  of  the  tax  commission,  and  conviction  thereunder. 

§  1087  ( 12 ) .  Gives  the  court  granting  letters  jurisdiction  of  all  transfer 
tax  matters,  and  makes  regulations  for  the  filing  of  ancillary  letters  requiring 
notice  to  the  public  administrator  and  a  full  inventory. 

§  1087  (13).  Provides  for  the  appointment  of  appraisers  and  hearings 
before  them,  and  for  the  computation  of  life  estates  and  remainders  by  the 
commissioner  of  insurance  on  mortality  tables  on  the  basis  of  5  per  cent.  No 
allowance  is  made  in  valuing  estates  that  may  be  defeated  or  abridged  by  a 
contingency,  but  a  proportionate  refund  is  provided  if  the  contingency  happens. 
In  case  of  contingent  remainders  the  tax  is  fixed  at  the  lowest  possible  rate, 
the  ultimate  beneficiary  being  required  to  pay  the  difference  if  it  turns  out 
that  he  is  liable  to  pay  a  higher  rate.  Where  taxation  has  been  postponed 
remainders  are  valued  without  any  deduction  for  the  intermediate  life  estate. 


THE  STATE  STATUTES 


789 


Where  an  estate  for  life  or  years  can  be  divested  by  the  act  or  omission  of 
the  legatee  it  is  taxed  as  though  there  were  no  possibility  of  such  divesting. 
The  section  makes  the  usual  provisions  for  appeal  and  rehearing  before  the 
county  court. 

The  rest  of  the  statute  is  concerned  with  reports  of  public  officers  and  pro- 
ceedings for  the  collection  of  delinquent  taxes. 


WYOMING 

Taxes  property  of  non-residents  within  the  state. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OR  RELATIONSHIP 

Amount  of  exemption 

Rate  of  tax 

Father,  mother,  husband,  wife,  child,  brother, 
sister,  son-in-law,  daughter-in-law,  adopted  or 
mutually  acknowledged  child  or  lawful  lineal 
descendant. 

$10,000  and  any  life 
estate  where  the  re- 
mainder goes  to  col- 
laterals or  strangers 

2%  on  all  in  excess  of 
exemption. 

All  others  

$500 

5%  on  all  above  ex- 

emption. 

COMPILED  STATUTES  1910,  CHAPTER  169. 

§  2455.  All  property,  real,  personal  and  mixed,  which  shall  pass  by  will  or 
by  the  intestate  laws  of  this  state  from  any  person  who  may  die  seized  or  pos- 
sessed of  the  same,  while  a  resident  of  this  state,  or  if  decedent  was  not  a  resi- 
dent of  this  state  at  the  time  of  his  death,  which  property  or  any  part  thereof 
shall  be  within  this  state  or  any  interest  therein  or  income  therefrom,  which 
shall  be  transferred  by  deed,  grant,  sale  or  gift  made  in  contemplation  of  the 
death  of  the  grantor  or  bargainer  or  intended  to  take  effect,  in  possession  or 
enjoyment  after  such  death,  to  any  person  or  persons  or  to  any  body  politic  or 
corporate  in  trust  or  otherwise,  or  by  reason  whereof  any  person  or  body 
politic  or  corporate  shall  become  beneficially  entitled  in  possession  or  expecta- 
tion, to  any  property  or  income  thereof,  shall  be  and  is  subject  to  a  tax  at  the 
rate  hereinafter  specified  to  be  paid  to  the  treasurer  of  the  proper  county  for 
the  use  of  the  state,  and  all  heirs,  legatees  and  devisees,  administrators,  execu- 
tors and  trustees  shall  be  liable  for  any  and  all  such  taxes  until  the  same  shall 
have  been  paid  as  hereinafter  directed. 

The  rest  of  the  section  prescribes  the  rates  and  exemptions  as  shown  in  the 
foregoing  table. 

§  2456.  When  any  person  shall  bequeath  or  devise  any  property  or  interest 
therein  or  income  therefrom  to  mother,  father,  husband,  wife,  brother,  sister, 
the  widow  of  the  son,  husband  of  the  daughter,  or  a  lineal  descendant  during 
the  life  or  for  a  term  of  years  and  remainder  to  the  collateral  heir  of  the 
descendant,  or  the  stranger  in  blood  or  to  the  body  politic  or  corporate  at  their 
decease,  or  on  the  expiration  of  such  term  the  said  life  estate  or  estates  for  a 
term  of  years  shall  not  be  subject  to  any  tax  and  the  property  so  passing  shall 
be  appraised  immediately  after  the  death  at  what  was  the  fair  market  value 
thereof  at  the  time  of  the  death  of  the  decedent  in  the  manner  hereinafter  pro- 
vided, and  after  deducting  therefrom  the  value  of  said  life  estate,  or  term-  of 
years,  the  tax  prescribed  by  this  chapter  on  the  remainder  shall  be  immediately 
due  and  payable  to  the  treasurer  of  the  proper  county,  and,  together  with  the 
interest  thereon  shall  be  and  remain  a  lien  on  said  property  until  the  same  is 
paid :  Provided,  That  the  person  or  persons  or  body  politic  or  corporate  bene- 
ficially interested  in  the  property  chargeable  with  said  tax  elect  not  to  pay  the 
same  until  they  shall  come  into  the  actual  possession  or  enjoyment  of  such, 
property,  then,  in  that  case  said  person  or  persons  or  body  politic  or  corporate 


790  INHERITANCE  TAXATION 

shall  give  a  bond  to  the  people  of  the  state  of  Wyoming,  in  a  penalty  three 
times  the  amount  of  the  tax  arising  upon  such  estate  with  such  sureties  as  the 
district  judge  may  approve,  conditioned  for  the  payment  of  the  said  tax,  and 
interest  thereon,  at  such  time  or  period  as  they  or  their  representatives  may 
come  into  the  actual  possession  or  enjoyment  of  said  property,  which  bond 
shall  be  filed  in  the  office  of  the  county  clerk  of  the  proper  county;  Provided, 
further,  That  such  person  shall  make  a  full,  verified  return  of  said  property 
to  said  district  judge,  and  file  the  same  in  his  office  within  one  year  from  the 
death  of  the  decedent,  and  within  that  period  enter  into  such  securities  and 
renew  the  same  each  five  years. 

§  2475.  Makes  taxes  due  at  death,  allows  a  discount  of  5  per  cent  if  paid 
within  six  months,  after  that  interest  charged  from  accrual  at  6  per  cent,  and 
if  not  paid  within  one  year  executors  or  administrators  must  give  a  bond. 

§  2458.  Requires  executors  and  administrators  to  deduct  the  tax  or  collect 
it  from  the  beneficiary,  to  whom  delivery  must  not  be  made  unless  the  tax  is 
paid.  Where  the  legacy  is  charged  on  real  estate  the  tax  must  be  deducted, 
ia  a  lien  and  may  be  enforced  in  the  same  manner  as  the  legacy.  Where  prop- 
erty is  given  for  a  limited  period  application  to  the  court  must  be  made  to 
apportion  the  tax  among  the  beneficiaries,  unless  the  legacy  is  in  money,  when 
it  must  be  deducted  from  the  whole  amount. 

§  2459.  Gives  power  of  sale  to  pay  the  tax  in  the  same  way  as  to  pay  debts. 

§  2460.  Provides  for  receipts  which  must  be  produced  on  final  accounting. 

§  2461.  Requires  administrators  to  go  to  the  county  treasurer  with  regard 
to  the  transfer  of  any  real  estate  believed  to  be  taxable. 

§  2462.  Provides  for  a  proportionate  refund  in  case  debts  are  proved  against 
the  estate  after  distribution. 

§  2463.  Requires  payment  of  the  tax  before  any  transfer  of  stock  by  a 
foreign  executor  or  administrator,  and  makes  the  corporation  making  the 
transfer  liable  for  the  tax  in  case  it  is  not  so  paid. 

§  2464.  Provides  for  refund  of  taxes  erroneously  paid  provided  the  appli- 
cation for  refund  is  made  within  two  years  of  such  payment. 

The  rest  of  the  statute  provides  the  usual  proceedings  for  appraisal,  assess- 
ment, appeal  and  the  collection  of  delinquent  taxes. 


INDEX 


Account  books  PAGE 

As   evidence 392 

Accrual 

Of  tax  32 

Of  tax,  New  York  Statute,  $  222 547 

Accrued  interest 

Set  forth  in  inventory 364 

Active  securities  268 

Actuaries 

Combined  table  of  mortality .220,  221 

Adequate  consideration 107 

Adjournment 

No  new  motice  required  by  appraiser 384 

Administration 

Affidavit  on  applying  for ;  form 598 

Expenses  a  deduction - 300 

Gains   or  losses   during 30 

Inventory  of  expenses 367 

Administrator 

Duty  of,  New  York  Statute,  $  224 549 

Personal  liability  of 458 

i 

Admissions 

In  inventory  competent  against  executor 388 

Adopted  child    159,  370 

Burden  on  to  show  adoption 389 

Advancements    60 

Debts  not  so  construed 298 

Affidavit 

Appraiser  may  act  upon 387 

As  admissions  by  administrator 388 

Must  show  facts,  not  conclusions 388 

[791] 


792  INDEX 

Affidavit  —  Continued  PAGE 

Of  expert,  as  to  real  estate 265 

Supplemental,  may  be  required, 387 

When  prepared  by  attorney 390 

Age 

As  affecting  contemplation  of  death 79 

Agent 

Delivery  of  gift  to 68 

Agreement 

Compromise,  among  heirs 50 

To  make  a  will 47 

Alabama 

No  inheritance  tax 647 

Alaska 

No  inheritance  tax 647 

Aliens 41 

Real  estate  of 179 

Amendments. 27 

List  of,  New  York  Statute 518 

To  New  York  Statute,  1917 538 

American  experience 

Tables  of  mortality 222,  223,  226 

Annuity 

Charged  on  life  estate 191 

Computation  of  value 219 

Payment  of  tax  on 190,  191 

Appeal 

Costs 441 

Does  not  lie  from  order  remitting  report 412 

Form  of  notice 421 

Grounds  must  be  stated  on  appeal  to  surrogate 421 

Notice  of  appeal 419 

Order  appealed  from 439 

Papers 441 

Proceedings  on 404 

Service  of  notice 440 

Status  of  executor 336 

Stipulation,  form  for 441 

To  Appellate  Division,  form 584 


T93 

Appeal  —  Continued  PAGE 

To  Court  of  Appeals  442 

To  surrogate,  form  — 583 

To  surrogate,  hearings  on  425 

To  surrogate,  New  York  Statute,  $  232 561 

Who  may  appeal 436 

Appellate  courts 

Appeals  to   . . 436 

Appellate  Division 

Appeals  to   439 

Notice  of  appeal  440 

Appendix. 577 

Appointment 

Of  appraiser 378 

Appointment,  power  of 

See  power  of  appointment 109 

Statutes  affecting  467 

Apportionment 

Of  corporate  property 251 

Appraisal 

Ends  with  death  or  removal  of  appraiser 386 

Petition  for,  form 586 

Appraiser 

Appointment 378 

Appointment  of,  New  York  Statute,  $  229 554 

Cannot  remit  penalty 454 

Fees  and  expenses 558 

Forms  of  report  398 

Jurisdiction 381 

May  act  on  affidavit 388 

Notice  of  hearing  before;  form 580 

Oath ;  form  of 579 

Order  appointing ;  form 579 

Powers  and  duties 380 

Proceedings  before  378 

Proceedings  by,  New  York  Statute,  $  230 557 

Removal 378 

Subpoena  issued  by ;  form 580 

Suspending  taxation 397 

What  his  report  must  contain 395 

What  it  must  show 397 

When  report  remitted  411 


794  INDEX 

Arizona  PAGE 

Address  of  tax  collector 328 

Interest,  discount,  penalty  471 

Mortality  tables 214 

Bates  and  exemptions  647 

Statute 647 

Arkansas 

Address  of  tax  collector 328 

Interest,  discount,  penalty  471 

Mortality  tables 214 

Rates  and  exemptions 652 

Statute 653 

Theory  of  the  tax 4 

Army  officer 

Domicile  of 155 

Art 

Works  of 365 

Assessed  value 

Of  real  estate 263 

Should  be  shown  in  inventory 363 

Assessments 304 

Assessment  of  tax 

Effect  of  decree 418 

Forms  of  notice 582 

Forms  of  order 413 

Judge  acts  as  taxing  officer 409 

Remitting  report 411 

The  taxing  order 411 

Assets 

Pro  rating 311 

Marshaling 317 

Assignment 

By  legatee    179 

Aunt 57 


B 

Bad  faith 

Motion  to  modify  decree  denied .  449 


INDEX  795 

Bank  PAGE 

Notice  by,  form  of 598 

Bank  deposits  73 

Set  forth  in  inventory 363 

Situs 256 

Beneficiaries 

As  to  domicile 158 

Interest  of  in  inventory 369 

Personal  liability 461 

Bid  Price 

As  to  stocks 271 

Bonds 

Situs 241 

Value 277 

U.  S.  Government  bonds  taxable 14 

U.  S.  taxable  under  U.  S.  Statute 501 

Books 365 

Of  account  as  evidence 392 

Of  corporation 392 

Book  value 

Of  stock 275 

Brokers 

Commissions 310 

Brother 57 

Burden  of  proof 

As  to  consideration 109 

As  to  domicile 149,  156 

As  to  exemptions 170 

As  to  gifts 66 

As  to  gifts  inter  vivos 389 

As  to  residence  —  N.  Y.  Statute,  §  243 575 

On  beneficiary  to  prove  exemption 389 

On  State  to  show  taxable  assets 356 

Prima  facie  case  sufficient 388 

Rests  on  the  Comptroller 388 

Where  on  executors 389 

Burial  expenses 299 


796  INDEX 

C 

California 

Address  of  tax  collector 328 

Interest,  discount,  penalty 471 

Mortality  tables 214 

Prior  statutes 674 

Rates,  table  of  L  1911 657 

Rates,  table  of  L  1913 658 

Rates,  table  of  L  1915-1917 659 

Statute  L  1917 660 

Theory  of  the  tax 4 

Capital 

Invested  in  business 531,  542 

Carlisle  table  of  mortality 224,  225 

Cash  on  hand 

Set  forth  in  inventory 363 

Cattle .. .  241 

Causa  mortis  gifts 75 

Cemetery  lot 

Cost  of  deducted 300 

Inventory  of  cost 366 

Certificates  of  stock 

Situs 247 

Charities 

Exemption  of  bequest  to 166 

Charitable  corporation 

Burden  of  proof  to  show  exemption 389 

Notice  to , ,„... 386 

Charitable  exemptions 

N.  Y.  Statute,  $  221 543 

Child 

Adopted • 370 

Illegitimate 56 

Rights  of  in  intestacy 63 

Civil  law  transfers 

Gains  in  foreign  country 144 

Gains  in  this  country 145 

Where  not  taxable 144 

Where  taxable  .  .  143 


INDEX  797 

Civil  service  laws  PAGE 

Not  applicable  to  appraisers 378 

Due  decedent 364 

Uncertain  or  doubtful 397 

When  doubtful 299 

Closely  held  stock 271 

Close  corporation • 276 

Collaterals 58 

Collectors 

Of  internal  revenue 330 

Colorado 

Address  of  tax  collector 328 

Interest,  discount,  penalty 471 

Mortality  tables 214 

Rates  and  exemptions 675 

Statute 675 

Theory  of  the  tax 4 

Commercial  paper 

Situs 241 

Commissions 

Inventory  of 367 

On  sale  of  real  estate 309 

To  brokers 310 

To  executors 305 

To  trustees 307 

Commissioner  of  Internal  Revenue 

Power  of 516 

Common  law 

Husband's  marital  right 122 

Transfers  by  operation  of 118 

Community  property 

Taxable  under  U.  S.  Statute 502 

Composition  of  tax 

Form  for 594 

Comptroller 

Burden  of  proof  upon 388,  389 

Power  to  inspect  safe  deposit  box 351 

Where  mandamus  lies  against 455 


798  INDEX 

PAGE 

Computations 213 

Actuaries  combined  table,  5  per  cent 220 

Actuaries  combined  table,  6  per  cent . . . .' 221 

American  experience  mortality  table 226 

American  experience  table,  4  per  cent 222 

American  experience  table,  5  per  cent 223 

Application  to  inheritance  taxation 228 

Carlisle  table,  5  per  cent 224 

Carlisle  table,  6  per  cent 225 

Chance  of  death 217 

Compound  interest  rule 215 

How  to  use  the  tables 227 

Key  table 214 

Law  of  discount 216 

Mortality  tables  and  interest  rate 213 

N.  Y.  Statute,  amended  as  to 534 

Of  good  will 283 

Present  value  life  estate 218 

Present  worth 217 

Connecticut 

Address  of  tax  collector 328 

Interest,  discount,  penalty 471 

Mortality  tables 214 

Rates  and  exemptions 678 

Statute 678 

Theory  of  the  tax 4 

Consideration 92 

Adequacy 107 

Constitutionality  13 

Direct  Federal  tax 14 

"  Full  Faith  and  Credit  " 39,  406 

Of  U.  S.  Statute  doubtful. 486 

Construction 

Of  wills 116 

Practical 38 

Retroactive  or  prospective 36 

Of  statutes 33 

Contemplation  of   death • 76 

Contempt 

Executor  may  be  punished  for 356 


INDEX  799 

Contingencies  PAGE 

N.  Y.  Statute,  $  230 558 

Contingent  remainder 185 

N.  Y.  Statute,  $  230 558 

Contracts 

As  to  real  estate 238 

Executory   98 

Under   seal 105 

Conversion 

Equitable   178 

Corporate  books 

As  evidence 292 

Corporate  property 

Apportionment  of 251 

Corporate  stock 247 

Inventory  of 365 

Corporations 

Foreign    249 

Form  of  notice  of  intention  to  transfer  stock 599 

In  States  that  tax  non-residents 341 

In  States  that  do  not 348 

Real    estate   of 528 

Real  estate  of,  N.  Y.  Statute 542 

Costs 

In  Appellate  Division 442 

In  Court  of  Appeals 442 

On  appeal 441 

On  delinquent  proceedings 441 

Counsel  fees 

When  reasonable,  a  deduction 300 

County  treasurer 

Fees 568 

May  act  as  appraiser 379 

When  mandamus  lies  against 455 

Court  of  Appeals 

Appeals   to 442 

Cousins  60 

Curtesy  121 

Amendment,  taxing 527 


800  INDEX 

Oustodia  legis  PAGE 

Legacy  in 182 

D 

Death 

Chance  of  computed 217 

Contemplation 76 

Transfer  takes  place  at 21 

Value  at 262 

Where  value  not  ascertainable 262 

Debts 

As  deductions 296 

Doubtful  claims 299 

Forgiven  by  will 364 

Inventory  of 368 

Liability  on  mortgage  bond 296 

Of  estate,  overlooked  in  inventory 444 

Payment  by  power  of  appointment 55 

Payment  by  will 54,  297 

Pro-rating 311 

Report  where  pro-rated 403 

Repairs  to  real  estate 296 

Situs  of. 257 

Decedent 148 

Value  of  services 284 

Decedent's  Estate  Law 

Consolidators '  notes 603 

N.  Y.  Statute 607 

Special  index 639 

Decree 

Assessing  tax 418 

Final  and  conclusive 419 

Motion  to  modify 444 

Of  distribution 406 

Of  probate,  effect  of 404 

Deductions 

Administration   expenses 300 

Commissions  305 

Debts 296 

Debts  paid  by  will 297 

Discount  on  legacy 301 

Doubtful  claims..                                                                             .  299 


INDEX  801 


Deductions  —  Continued 

Expenses  of  litigation 302 

Family    allowance 310 

Funeral   expenses 299 

Marshaling   assets 317 

Mortgages    295 

.  On  mortgage  bond 296 

Pro-rating  debts 311 

Repairs  to  real  estate 296 

Set  forth  in  inventory 368 

State  inheritance  taxes,  not  allowed  by  U.  S 496 

Taxes   303 

Under  U.  S.  Statute 503 

Deeds  to  take  effect  at  death -     84 

Definitions 

In  U.  S.  Statute 497 

N.  Y.  Statute,  $  243 573 

Delaware 

Address  of  tax  collector 238 

Interest,  discount,  penalty 472 

Mortality  tables 214 

Rates  and  exemptions,  L.  1909 683 

Rates  and  exemptions,  L.  1917 ' 682 

Statutes  1909-1913 684 

Statute  1917 683 

Delay 

Unavoidable 452 

Delinquent  taxes 

Proceedings  to  collect 457 

Delivery 

Of  gift 68 

Re-delivery  71 

Symbolical    71 

Deposits  in  banks 73 

Situs   256 

Discount  471 

How  calculated 216 

N.  Y.  Statute,  $  223 548 

On  legacy 301 

Distribution 

Decree  of . .  406 


802  INDEX 

District-attorney 

Authority  presumed 385 

Citation  589 

Decree 590 

Forms  —  petition   588 

Order  for  citation 589 

Proceeding  by  N.  Y.  Statute,  §  235 565 

Proceeding  to  collect  delinquent  taxes 457 

Districts 

For  collection  of  internal  revenue 330 

District  of  Columbia 

No  inheritance  tax 685 

Dividends 

Apportionment  of  to  life  tenant 188 

Divorce 

Effect  on  dower 120 

Divorced  wife  of  son 163 

Domestic  corporations 247 

Domicile 

Animus  with  f actum 152 

Animus  without  factum 151 

As  to  army  officer • 155 

As  to  beneficiaries  generally 158 

As  to  married  women 153 

As  to  widow 153 

Burden  of  proof 156 

Definition 149 

Factum  without  animus 150 

Rules  as  to 149 

Statutes  affecting 156 

Donee 

Of  power  of  appointment 117 

Donor 

Of  power  of  appointment 117 

Double  taxation 18 

Doubtful  claims 299 

Dower  118 

Allowed  as  deduction 119 

Claimed  in  inventory 363 

Intent   of  testator .  119 


INDEX  803 

E 

Embezzlement  PAGE 

Heirs  must  bear  loss 31 

Entirety 

Change  in  rights  at  death 125 

Effect  of  statute 128 

How    created 125 

How   terminated 127 

Nature  of  estate  changed  by  N.  Y.  statute 128 

Nature  of  the  estate 123 

Not  of  personal  property 124 

Tenancy  by 123 

Tenancy,  by  statute 533 

Equitable  conversion 178,  237 

Equitable  relief 

Not  granted  as  to  taxes 453 

Error 

Ground  for  reappraisal 379 

Of  law,  corrected  by  appeal  only 446 

Escheat   141 

Estate 

Interest  in  that  of  another 260 

Evidence 

Appraiser  may  rule  on  admissibility 381 

As  to  personal  transactions  with  deceased,  competent 390 

Books  of  account 392 

Corporate  books 392 

Circumstantial,    sufficient 388 

Materiality  for  surrogate 389 

May  be  taken  by  surrogate  on  appeal 425 

Newly  discovered 426 

Of  foreign   law 395 

Opinion  of  experts 389 

Executor 

Bequests  to,  taxable 551 

Cannot  be  forced  to  answer  without  jurisdiction 356 

Commissions 305 

Duties  under  U.  S.  Statute 495 

Duty  of,  New  York  Statute,  §  224 549 

Foreign  executor  not  liable  personally 461 


804  INDEX 

Executor  —  Continued  PAGE 

Foreign  executor  may  appeal 438 

Form  of  affidavit  by 357 

May  be  punished  for  contempt 356 

Must  file  inventory 356 

Of  non-resident  need  not  testify 392 

Penalty  for  refusal  to  testify 392 

Personal  liability  of 458 

State  must  show  estate  taxable 356 

Statutes  affecting 469 

When  he  may  appeal 436 

When  he  may  not  appeal 438 

Where  he  can  marshal  assets  to  reduce  tax 317 

Where  he  cannot 319 

Executory  contracts 98 

Exemptions 

Bequests  held  exempt 173 

Bequests  held  taxable 174 

Burden  of  proof 170 

Burden  of  proof  on  claimant 389 

By  general  statutes  not  effective 15 

Charter  powers,  the  test 167 

Construction   of - 34 

Motions    for 323 

Not  included  in  inventory 369 

Not  retroactive 36 

Personal,  N.  Y.  Statute,  $  221 544 

Strictly  construed 35 

To  charities 166 

To  charities,  N.  Y.  Statute,  §  221 543 

To  persons 165 

Under  N.  Y.  Act  of  1892 520 

Under  N.  Y.  Act  of  1910. 524 

Under  N.  Y.  Act  of  1911 526 

Under  present  N.  Y.  Act,  1916 .535 

Under  U.  S.  Statute 495 

Experts 

Qualifications  of 390 

r 

Factum 

As  to  domicile 150 

Family  allowance 121 

A  deduction .  310 


INDEX 

Father  PAGE 

Rights  of,  in  intestacy 62 

Federal 

Collectors  of  internal  revenue 330 

Federal  Statute 

See  United  States 484,  497 

Federal  tax 

Inventory  must  be  filed  with  collector 356 

Fees 

Of  county  treasurer 568 

Financial  experts 

Report  must  be  under  oath 391 

Florida 

No  inheritance  tax 685 

Foreclosure 

Effect  of 30 

Foreign  corporations 249 

Foreign  law 

Proof  of : 395 

Foreign  real  estate 

Where  will  directs  payment  of  mortgage  out  of  personalty. . . .  264 

Forms 

Affidavit  on  application  for  letters  testamentary  or  of  adminis- 
tration   598 

Agreement  upon  composition  of  tax 594 

Application  to  Supreme  Court  for  re-appraisal 597 

Application  to  Superintendent  of  Insurance 581 

Appraiser 's  report 398 

Appraiser 's  report,  pro-rating  debts  and  assets 403 

Certificate  of  payment  of  tax  on  real  estate 596 

District-attorney  proceedings : 

(a)  Citation 589 

(b)  Decree 590 

(c)  Order  for  citation 599 

(d)  Petition  588 

Executor's   affidavit 357 

Inventory 370 


806  INDEX 


Forms  —  Continued 

Maximum  and  minimum  rates  ..............................  416 

Motion  to  exempt  estate  ....................................  324 

Notice  by  bank  or  trust  company  ...........................  598 

Notice  of  appeal  to  Appellate  Division  ..................  435,  584 

Notice  of  appeal  from  order  on  supplemental  report  ..........  433 

Notice  of  appeal  to  surrogate  ...........................  421,  583 

Notice  of  assessment  of  tax  .................................  582 

Notice  of  hearing  before  appraiser  ..........................  580 

Notice  of  intended  delivery  of  safe  deposit  box  contents  ......  599 

Notice  of  intended  transfer  of  stock  ........................  599 

Notice  of  motion  to  remit  interest  ..........................  585 

Notice  of  transfer  of  deposits  by  Bank  or  trust  company  ......  599 

Non-resident  proceedings  : 

(a)  Affidavit  for  appraisal  ................................  591 

(b)  Affidavit  for  consent  to  transfer  property  ..............  593 

(c)  Order  designating  appraiser  ..........................  593 

(d)  Petition  for  appraisal  ................................  592 

Oath  of  appraiser  ..........................................  579 

Order  appointing  appraiser  .................................  579 

Order  assessing  tax  ........................................  582 

Order  exempting  estate  .....................................  588 

Order  fixing  tax,  where  no  appraisal  ........................  587 

Order  of  surrogate  on  appeal  ..............................  583 

Order  on  supplemental  report  ...............................  432 

Order  remitting  interest  ....................................  586 

Order  remitting  report  .....................................  428 

Order  returning  report  to  appraiser  ..........................  581 

Petition  for  appraisal  ......................................  586 

Petition  to  remit  interest  ..................................  584 

Stipulation  waiving  certification  of  papers  ....................  441 

Subpoena  —  appraiser's    ...................................  580 

Supplemental   report  .......................................  431 

Taxing  order  ...............................................  413 

Taxing  order  on  second  appeal  .............................  434 

Fraud 

Ground  for  reappraisal  .....................................  379 

Funeral  expenses  ...............................................  299 

Inventory   of  ..............................................  366 

Furniture 

Situs  .....................................................  241 

Value  of  .  .  ................  266 


INDEX  807 

G 

Georgia  PAGE 

Address  of  tax  collector 328 

Interest,  discount,  penalty 472 

Mortality  tables   214 

Rates  and  exemptions 685 

Statute  685 

Gift 

Advanced  age ;  gift  in  contemplation  of  death 79 

Agent  of  donee 70 

Agent  of  donor 69 

Bank   deposits 73 

Burden  of  proof 69 

Burden  of  proof  on  donee 389 

Causa  mortis 75 

Contemplation  of  death 76 

Delivery   68 

Delivery   to   agent 68 

Inter  vivos 66 

Intent  to  give 67 

Life  use  waived 87 

Nature  of  contemplation 76 

Part  of  income  reserved 86 

Power  of  revocation 72 

Power  to  revoke 87 

Re-delivery  71 

Statutory  time  limit 83 

Stock  transfer  stamps 74 

Symbolical  delivery 71 

Taking  effect  at  death 84 

Tax  accrues  at  date  of  gift 83 

Good  will 

A  taxable  asset 282 

Number  of  years '  purchase 284 

Rules  for  computation 283 

Where  profits  are   speculative 288 

Where  no  profits  are  shown 289 

Grandnephews  and  nieces 58 

Gross  estate 

U.  S.  Statute. .                                                                           .  500 


808  INDEX 


Hawaii  PAGE 

Interest,  discount,  penalty 472 

Mortality  tables 214 

Kates  and  exemptions ,. 687 

Statute 687 

Hearings 

Before  appraiser,  form  of  notice 580 

Burden  of  proof 388 

Corporate   books 392 

Informal    upon    affidavits 387 

Objections    393 

On  appeal  to  surrogate 425 

Proof  of  foreign  law 395 

Statute  must  provide  for 37 

Witnesses , 389 

Heirs  • 176 

Highest  rate  possible 

N.  Y.  Statute,  §  230 559 

Horses 365 

Husband 

Marital  right 122 

Eights  of  surviving 61 

Tenancy  by  curtesy 121 

I 
Idaho 

Address  of  tax  collector 328 

Interest,  discount,  penalty 472 

Mortality  tables 214 

Rates  and  exemptions 688 

Statute 689 

Illegitimate  child 56,  136 

Illinois 

Address  of  tax  collector 328 

Amendment   (1917) 693 

Interest,  discount,  penalty 472 

Mortality  tables 214 

Rates  and  exemptions 690 

Statute 691 

Theory  of  the  tax 4 


INDEX  809 

Income  PAGE 

Accumulations  of,  during  life  estate 188 

Reserved  in  trust  deed 84 

When  part  is  reserved 86 

Indemnity 

Must  be  set  off  against  debt 368 

Indiana 

Address  of  tax  collector 328 

Interest,  discount,  penalty 472 

Mortality  tables 214 

Rates  and  exemptions 695 

Statute 695 

Inheritance 

Entirety  not  taxable  as 123 

Insurance 

Payable  to  estate  taxable  under  United  States  Statute 501 

Tables 214 

Insurance  superintendent 

Form  of  application  to 581 

Intangible  property 

New  York  Statute,  $  220 540 

Intangibles 

General  discussion 477 

Interest   471 

Accrued  prior  to  death 30 

New  York  Statute,  $  223 548 

Notice  of  motion  to  remit ;  form 585 

Order  remitting ;  form 585 

Petition  to  remit ;  form 584 

Rate  in  computing  life  estate  values 214 

Refund  may  be  compelled  by  mandamus 455 

Rule  for  compounding 215 

Set  forth  in  inventory 364 

Internal  revenue 

Districts  and  collectors 330 

Internal  revenue  commissioner 

Power  of 516 

Intestacy 

As  to  personal  property 57 

Transfers  by  New  York  Statute,  §  220 540 


810  INDEX 

PAGE 

Intestate  laws 61 

Transfers  by 56 

Inventory 

Form  of 370 

Form  of  affidavit  by  executor 357 

Must  be  filed  by  executor 356 

Preparation  of  inventory  362 

Iowa 

Address  of  tax  collector 328 

Interest,  discount,  penalty 472 

Mortality  tables 214 

Rates  and  exemptions 699 

Statute 699 

Theory  of  the  tax 5 

J 

Jewelry 365 

Value  of 267 

Joint  accounts 

Shown  in  inventory 364 

Joint  estates 

New  York  Statute,  amended  as  to 530 

New  York  Statute,  $  220,  subd.  7 543 

Joint  tenancy 

Construction  of,  New  York  Statute 138 

Intent  of  parties  governs 130 

Specifically  taxed  by  statute 137 

Survivorship  not  taxable  as  an  inheritance 133 

Jndge  of  probate 

As  taxing  officer 409 

Judicial  functions 

Of  appraiser 380 

Jurisdiction 

As  to  domicile 39 

As  to  tax  proceedings 408 

Decree  vacated  where  wanting 445 

Depends  on  notice 383 

Effect  of  probate  decree 404 

Necessary  before  executor  can  be  punished 356 

Of  surrogate  —  New  York  Statute,  $  228 553 

Personalty  of  resident  taxable  though  in  foreign  states 15 


INDEX  811 

K 

Kansas  PAGE 

Address  of  tax  collector 328 

Amendment  of  1917 706 

Interest,  discount,  penalty 472 

Mortality  tables 214 

Rates  and  exemptions 704 

Statute 704 

Kentucky 

Address  of  tax  collector 328 

Interest,  discount,  penalty 472 

Mortality  tables 214 

Rates  and  exemptions 708 

Statute 708 

Theory  of  the  tax 5 

L 

Laches 

Motion  to  modify  decree  denied 449 

Land  contracts 238 

Lapsed  legacy 181 

Laws 

Conflict  of 39 

Proof  of  foreign 40 

Leases 240 

Covenant  to  pay  taxes 15 

Legacy 

Discount  on 301 

From  what  fund  tax  payable 183 

Impressed  with  trust 180 

In  custodia  legis 182 

Lapsed 118 

Legatees 176 

Of  personal  property 179 

Renunciation  by 24,    51 

Legislature 

Inherent,  power  of 11 

Successive  acts 28 

Power  to  amend  or  repeal 27 

Letters  testamentary 

Form  of  affidavit..  .  598 


812  INDEX 

Liabilities  PAGE 

See  Deductions  294 

Lien 

Of  tax 176 

Of  tax,  New  York  Statute,  $  224 ' 549 

Of  United  States  tax 514 

When  general  taxes  become 304 

Life  estate 

Absolute 185 

Apportionment  of  dividends 188 

Charge  with  an  annuity ...... 191 

Computations  of  present  worth 218 

Examples  of 185 

Fund  from  which  payable 189 

Generally 188 

Income  accumulations  of 188 

Joint 185 

Merger  of 188 

Power  to  invade  principal 191 

Suspending  taxation  of  remainder 191 

Taxed  on  theoretical  value 198 

Valuation  of,  New  York  Statute,  $  230 558 

When  discretion  is  in  life  tenant 192 

When  discretion  is  in  trustee 192 

With  power  of  appointment 197 

Life  use 

Waiver  of 87 

Life  insurance  D7 

Situs 258 

Limitations,  Statute  of 

Applied  to  inheritance  taxes 451 

Claims  barred  by 368 

Construed  retroactively 36 

Do  not  run  against  the  state 452 

New  York  Statute,  $  245 575 

Litigation 

Expenses  of,  when  a  deduction 302 

To  determine  tax 453 

Louisiana 

Address  of  tax  collector 328 

Interest,  discount,  penalty 472 

Mortality  tables 214 


INDEX  813 

Louisiana  —  Continued  PAGE 

Bates  and  exemptions 709 

Statute 709 

Theory  of  the  tax 5 

M 

Maine 

Address  of  tax  collector 328 

Interest,  discount,  penalty 472 

Mortality  tables 214 

Rates  and  exemptions 711 

Statute 711 

Theory  of  the  tax 5 

Mandamus 

Cannot  compel  court  to  enter  specific  decree 457 

Or  the  appointment  of  appraiser 455 

Or  the  issuance  of  receipt 456 

Power  of  surrogate 455 

Proper  remedy  to  compel  refund 455 

Refused  where  dispute  as  to  amount  of  tax 456 

Refused  where  right  of  appeal 457 

Marital  right  122 

Market  price 

Of  stock 271 

Married  women 

Domicile  of  149,  153 

Marshaling  assets 317 

Maryland 

Address  of  tax  collector 329 

Interest,  discount,  penalty 472 

Mortality  tables 214 

Rates  and  exemptions 713 

Statute 713 

Theory  of  the  tax 5 

Massachusetts 

Address  of  tax  collector 329 

Interest,  discount,  penalty 473 

Mortality  tables 214 

Rates  and  exemptions,  1912 715 

Rates  and  exemptions,  1907-1912 716 

Statute 716 

Theory  of  the  tax 5 


814  INDEX 

PAGE 

Mfl-TiTirnm  and  Tni-m-mmr)  rates 527 

Order  fixing  rates 413 

Merger 

Of  life  estate  and  remainder 188 

Michigan 

Address  of  tax  collector 329 

Interest,  discount,  penalty 473 

Mortality  tables 214 

Rates  and  exemptions 719 

Statute 719 

Theory  of  the  tax 6 

Minnesota 

Address  of  tax  collector 329 

Interest,  discount,  penalty 473 

Mortality  tables 214 

Rates  and  exemptions 721 

Statute 721 

Theory  of  the  tax 7 

Mississippi 

No  inheritance  tax 724 

Missouri 

Address  of  tax  collector 329 

Interest,  discount,  penalty 473 

Mortality  tables 214 

Rates  and  exemptions  (1917) 724 

Rates  and  exemptions  (prior  to  1917) 724 

Statute 724 

Theory  of  the  tax 7 

Mistake  of  fact 

Corrected  on  motion 444 

Mobilia  personam  sequuntur 148 

Modifying  decree 445 

Money 

Loaned  to  partnership 282 

Montana 

Address  of  tax  collector 329 

Amendment,  1917 729 

Interest,  discount,  penalty 473 


INDEX  815 

Montana  —  Continued  PAGE 

Mortality  tables 214 

Rates  and  exemptions 728 

Statute 728 

Theory  of  the  tax 7 

Monument 

Cost  of,  deducted 300 

Mortgage 

Debt  as  a  deduction 295 

Devisee  of  land  takes  "cum  onere" 295 

Habitual  presence 246 

In  inventory 363 

Situs 241 

Situs  at  domicile 242 

Transient  presence  246 

When  will  directs  payment  out  of  personalty 264 

Where  physically  present 244 

Where  the  land  lies 243 

Mother 

Bights  of,  in  intestacy 62 

Motion 

For  mistake  of  fact 444 

Form  for 324 

Lack  of  jurisdiction 445 

Modifying  decree   444 

Not  granted  to  correct  error  of  law 446 

Nor  where  there  is  laches 449 

Or  bad  faith 449 

Or  when  Statute  of  Limitation  has  run 451 

To  exempt  too  late  when  appraiser  has  been  appointed 427 

To  exempt  estate  323 

To  remit  penalty 452 

To  remit  appraiser's  report 412 

Motor  cars  365 

Mutual  acknowledgment  of  child 370 

Mutual  mistake 

Decree  modified    448 

Mutual  wills   49 

N 

National  bank  .          .  248 


816 


Nebraska 

Address  of  tax  collector  ...................................  329 

Interest,   discount,   penalty  .................................  473 

Mortality  tables   ..........................................  214 

Rates  and  exemptions  .......................  ..............  730 

Statute  .................................................  730 

Theory  of  the  tax  .........................................  7 

Nephew  .....................................................     57 

Net  estate 

Under  United  States  Statute  ...............................  503 

Nevada 

Address  of  tax  collector  ..........  ,  ........................  329 

Interest,   discount,   penalty  .................................  473 

Mortality  tables  ..........................................  214 

Bates  and  exemptions  ......................................  732 

Statute  ...................................................  732 

New  Hampshire 

Address  of  tax  collector  ...................................  329 

Interest,   discount,   penalty  .........  .  .......................  473 

Mortality  tables   ..........................................  214 

Rates  and  exemptions  ...............................  .  ......  734 

Theory  of  the  tax  .........................................       8 

New  Jersey 

Address  of  tax  collector  ........  ...........................  329 

Interest,   discount,   penalty  .................................  473 

Mortality  tables   ..........................................  214 

Rates  and  exemptions  ......................................  736 

Statutes  .................................................  736 

Theory  of  the  tax  .........................................  8 

New  Mexico 

No  inheritance  tax  .........................................  741 

New  York 

Accrual  and  payment,  §  222  ...............................  547 

Address  of  tax  collector  ...................................  329 

Amendments,  1917  ........................................  538 

Appeal  and  other  proceedings,  §  232  ........................  561 

Application  of  taxes,  §  242  .................................  573 

Appointment  of  appraisers,  §  229  ...........................  554 

Bequests  in  lieu  of  commissions,  $  226  ......................  551 

Books  and  forms,  $  238  ....................................  568 

Capital  invested  in  business  ................................  531 


INDEX  817 

New  York  —  Continued  PAMS 

Change  in  theory  of  tax 525 

Collateral  inheritance  tax 519 

Composition  of  tax,  §  233 563 

Computations 534 

Curtesy  taxed   527 

Definitions,  §  243 573 

Definitions 525 

Determination  of  surrogate,  $  231 560 

Direct  inheritance  tax 520 

Entirety,  tenancy  by 533 

Exemptions 530 

Exemptions,  $  221c 547 

Exemptions  and  limitations,  $  221 543 

Exemptions  not  applicable,  §  244 575 

Fees  of  county  treasurer,  $  237 568 

History  and  development 517 

Interest,  discount  and  penalty 473 

Joint  estates   530 

Jurisdiction  of  Surrogate,  §  228 553 

Liability  of  corporations,  §  227 552 

Lien  and  collection  by  executor,  §  224 549 

Limitations  of  time,  $  245 575 

List  of  statutes ; 518 

Maximum  aod  minimum  rates 527 

Mortality  tables   215 

Original  Statute  of  1909 524 

Partnership  assets   529 

Policy  as  to  nonresidents 527 

Proceedings  by  appraiser,  §  230 557 

Proceedings  by  district  attorney,  $  235 565 

Powers  of  appointment 521 

Rates  in  1910 524 

Rates  in  1911 526 

Rates  and  exemptions 535 

Rates  of  tax,  $  221a 545 

Real  estate  of  corporations 528 

Receipts  from  county  treasurer  or  comptroller,  $  236 567 

Refund  of  tax  erroneously  paid,  §  225 550 

Report  of  comptroller,  payments,  refunds,  §  241 570 

Report  of  county  treasurer,  $  240 570 

Report  of  surrogate,  $  239 569 

Resident  defined  553 

Statute  as  amended 539 

Surrogate  assistants,  $  234 563 


818  INDEX 

New  York  —  Continued  PAGE 

Tangibles  and  intangibles 526 

Tax  on  investments  (secured  debts) 546 

Taxable  transfers,  §  220 540 

Theory  of  tax 8 

Newly  discovered  evidence 426 

Next  of  kin  60 

Niece 57 

Nonresidents 

Corporations  in  states  that  tax  them 341 

Corporations  in  states  that  do  not . ; 348 

Definitions 574 

Executor,  of  need  not  testify 392 

Intangibles  of,  within  jurisdiction 18 

New  York  Statute,  §  220 540 

Penalty  for  refusal  to  testify 392 

Policy  of  New  York  Statute 527 

Procedure  as  to 327 

Nonresident  proceedings  —  form 

Affidavit  for  appraisal 591 

Affidavit  for  consent  to  transfer  property 593 

Order  appointing  appraiser 593 

Petition 592 

North  Carolina 

Address  of  tax  collector 329 

Interest,  discount,  penalty 474 

Mortality  tables   215 

Rates  and  exemptions 741 

Statute 741 

Theory  of  the  tax 8 

North  Dakota 

Address  of  tax  collector 329 

Interest,  discount,  penalty 474 

Mortality  tables   215 

Rates  and  exemptions,  1913-17 743 

Rates  and  exemptions,  1917 743 

Statute 744 

Notes 

Shown  in  inventory 364 


INDEX  819 


Notice 

Appeal  to  Surrogate  ......................................  419 

Assessment  of  tax  ;  form  ...................................  582 

By  mail  sufficient  ..........................................  385 

Failure  to  give  invalidates  proceedings  .......................  383 

Is  jurisdictional    ..........................................  383 

Must  specify  the  property  ..................................  384 

Must  state  grounds  ........................................  420 

Of  hearing  before  appraiser;  form  ..........................  580 

Presumption  of  ...........................................  387 

Statute  must  provide  for  ...................................  37 

Under  United  States  Statute  ...............................  505 

Where  notice  impossible  ...................................  386 

Notice  of  appeal 

From  order  on  supplemental  report,  form  of  ..................  433 

Service  of  ................................................  440 

To  appellate  division  ;  form  of  .............................  435 

0 
Oath 

Must  be  subscribed  to  affidavits  ............................  391 

Of  appraiser,  form  of  ......................................  579 

Objections 

Comptroller  must  take  before  appraiser  .....  .  ...............  394 

Failure  to  take  may  not  excuse  error  ........................  393 

Officers 

Names  and  addresses  of  different  state  officials  ................  328 

Ohio 

Address  of  tax  collector  ...................................  329 

Interest,  discount,  penalty  ..................................  474 

Mortality  tables   ..........................................  215 

Rates  and  exemptions  ......................................  747 

Statute  ..................................................  747 

Theory  of  the  tax  ..........................................  8 

Oklahoma 

Address  of  tax  collector  ...................................  329 

Interest,  discount,  penalty  ..................................  474 

Mortality  tables  ...........................................  215 

Rates  and  exemptions  ......................................  749 

Statute  ...................................................  749 

Opinion  evidence 

By  experts   ...............................................  390 


820  INDEX 

Order  PAGE 

Appealed  from   439 

Appointing  appraiser;  form   579 

Assessing  tax ;  form 582 

Exempting  estate ;  form 588 

Fixing  tax,  second  appeal ;  form  of 434 

Not  appealable   411 

Of  surrogate  on  appeal ;  form 583 

On  supplemental  report ;  form  of 432 

Remitting  interest ;  form  of 585 

Remitting  report 411 

Remitting  report,  form  of 428 

Remitting  report  to  appraiser  form 581 

Resettling 439 

Oregon 

Address  of  tax  collector 329 

Interest,  discount,  penalty 474 

Mortality  tables •  215 

Rates  and  exemptions  prior  to  1917 ,  752 

Rates  and  exemptions,  1917 751 

Statutes 752 

P 

Parents 

Rights  of,  in  intestacy 62 

Parties 

To  the  transfer 146 

Partition 177 

Partnership 

Bequests  to 279 

Inventory  of  interest 366 

New  York  Statute,  amended  as  to 529 

Nonresident,  interest  in 542 

Pro-rating  debts  and  assets 315 

Real  estate  of 262,  281 

Situs  of  assets 261 

Value  of  interest 279 

Payment 

Does  not  estop  comptroller 426 

Into  court  does  not  discharge  lien 454 

Of  tax,  New  York  Statute,  §  222 547 

Of  United  States  tax 511 

Of  tax,  generally 418 

To  wrong  official  no  excuse 457 


INDEX  821 

FACE 

Penalty 471 

For  not  paying  stock  transfer  tax 547 

Motion  to  remit 452 

Motion  to  remit  —  forms 584,  585 

New  Yok  Statute,  $  223 548 

Under  United  States  Statute 515 

Pennsylvania 

Address  of  tax  collector 329 

Governor's  memorandum   762 

Interest,  discount,  penalty 474 

Mortality  tables 215 

Rates  and  exemptions  prior  to  1917 754 

Statute  of  1887 754 

Statute  of  1917 758 

Theory  of  the  tax 9 

Unconstitutional  statute  13 

Personal  liability 

Of  executor  or  administrator 458 

Personal  property 

Follows  situs  of  domicile 16,    17 

No  tenancy  by  entirety  in 124 

Of  intestate  J? 

Pledged  securities 

Inventory  of   365 

Situs 251 

Value  of 277 

Pictures 365 

Value  of 266 

Power  of  appointment 

As  to  remainders 207 

Common  law  rule 109 

Development  New  York  rule 114 

Highest  possible  rate 523 

Massachusetts  rule  112 

New  York  rule Ill 

New  York  Statute  of  1896 ' 521 

New  York  Statute,  $  220,  subd.  6 542 

Repeal  of  clause  as  to  failure  to  appoint 526 

Statutes  affecting 467 

Statutory  rule  Ill 

United  States  Statute  concerning 502 

When  in  life  tenant 197 


822  INDEX 

PAGE 

Power  of  revocation  72 

Power  to  invade  principal 191 

Power  to  revoke 87 

Present  worth  . 

How  calculated  216 

Chance  of  death,  affecting 217 

Presumption 

Of  notice   387 

Privilege  taxed 11 

Probate  decree 

Effect  of 404 

Probate  judge 

As  taxing  officer 409 

Proceedings 

As  to  non-resident  —  forms 591,  593 

Before  appraiser 378 

Invalidated  by  failure  to  give  notice 383 

Jurisdiction 408 

On  appeal 404 

To  collect  delinquent  taxes 457 

To  collect  United  States  tax 512 

Procedure 

As  to  nonresidents 327 

Controlled  by  law  in  force  at  death 25 

Statute  must  provide  for 323 

Profits 

Of  partnership 282 

Pro  forma 

Order  as  of  course 411 

Proof 

Of  foreign  law 395 

Of  notice 383 

Property 

Definitions 235 

Seat  in  Stock  Exchange 260 


INDEX  823 

Pro-rating  PAGE 

Form  of  report 403 

Of  debts  311 

Partnerships 315 

Where  both  local  and  foreign  debts  and  assets 314 

Where  local  debts  paid  with  foreign  assets 313 

Where  local  assets  and  no  local  debts 312 

Where  local  debts  exceed  local  assets 312 

Prospective  laws 36 

£ 

Bates  of  tax 

Present  rates,  New  York :    Act  of  1916 535-545 

Under  New  York  Act  of  1892 520 

Under  New  York  Act  of  1910 524 

Under  New  York  Act  of  1911 526 

Under  present  United  States  Statute 498 

Under  United  States  Statute,  1898 486 

Re-appraisal 

Application  for ;  form 597 

Real  estate 

As  to  aliens 179 

Charged  with  legacy  179 

Collection  of  tax  by  heir 549 

Commissions  on  sale 309 

Certificate  of  payment  of  tax  on ;  form 596 

Description  in  inventory 362 

Evidence  of  expert  as  to  value 391 

Equitable  conversion 178,  237 

First  taxed  in  New  York 523 

Form  of  description  in  inventory 370 

Heirs  to   176 

Land  contracts   238 

Leases 240 

Not  taxable  in  foreign  jurisdiction 236 

Of  corporations    528 

Of  intestate  56 

Partition 177 

Repairs  to   296 

Sales  of,  to  pay  tax 178 

Situs 235 

Valuation  of  fractional  interest 265 

Value.  .                                                                                              .  263 


824  INDEX 

Receipts  PASE 

New  York  Statute,  $  236 567 

Reciprocal  statutes   42 

General  discussion  478 

Refunds 

Of  tax,  New  York  Statute,  §  241 570 

Of  tax  erroneously  paid 550 

Regulations 

Of  United  States  Treasury  Department 497 

Relationship  to  decedent 159,  163 

Remainders 199 

Beneficiary  uncertain,   202 

Contingent. 185 

Examples  of    185 

Full  undiminished  value 211 

Full  undiminished  value  taxable,  New  York  Statute,  $  230 560 

Law  in  force  at  date  of  death 200 

Maximum  and  minimum  rate  206 

Powers  of  appointment 207 

Presently  taxable  201 

Present  taxation,  when  contingent 414 

Statutes  affecting  468 

Taxation  postponed 201 

Taxed  at  highest  possible  rate 204 

Vested  before  statute 200 

Vested 185 

Where  amount  uncertain  207 

Remitting  penalty 

Motion  for  452 

Remitting  report 411 

Removal 

Of  appraiser  378 

Renunciation. 51 

By  legatee 24,  179 

Repairs  to  real  estate 296 

Repeal 

By  implication   28 

Effect  of 27 

Saving  clause    29 


INDEX  825 

Report  PAGE 

Form  for   398 

May  be  remitted 411 

Taxation  suspended  397 

What  it  must  show 397 

What  it  should  contain 395 

Resettling  order  439 

Residence 

As  to  powers  of  appointment 116 

Definition 149 

May  not  be  determined  by  appraiser 382 

Of  beneficiaries 158 

Resident 

Definition.  .  .  .» 574 

Personalty  of,  liable  to  tax 15 

Retroactive  amendments    27 

Retroactive  laws  36 

Where  estate  is  in  custodia  legis 32 

Return 

By  executor;  United  States  Statute * . .  .505,  508 

Revenue 

Exemptions 480 

Produced  by  tax 479 

Table  showing  tax  receipts  482 

The  rate  479 

Revocation 

Of  gift   72 

Rhode  Island 

Address  of  tax  collector 329 

Interest,  discount,  penalty  , .  474 

Mortality  tables   215 

Rates  and  exemptions 763 

Statutes 763 

S 
Safe  deposit  box 

Comptroller  may  inspect   351 

Consent  for  transfer  of  funds 354 

Form  of  notice  of  intention  and  deliver  contents 599 

May  not  impost  arbitrary  conditions 353 

Property  belonging  to  another 355 


826  INDEX 

Safe  deposit  companies  PAGE 

Duties  of,  New  York  Statute,  $  227 552 

Sale 

Of  property  in  vicinity 263 

Of  stock  271 

To  pay  tax 178 

Schedules 

Form  of  370 

Seal  importing  consideration 105 

Secured  debts 

Penalty  for  not  paying  tax 547 

Securities 

Active 268 

Inactive. 270 

Services 

As  a  deduction 298 

Services  of  decedent 

Value  of 284 

Sister 57 

Situs 

Bank  deposits   256 

Bonds 241 

Commercial  paper 241 

Corporate  stock   247 . 

Debts 257 

Domestic  corporations 247 

Estate  of  another 260 

Foreign  corporations  249 

Land  contracts   238 

Leases 240 

Life  insurance 258 

Mortgages 241 

Of  property  236 

Other  chases  in  action ^ . .  256 

Partnership  interest    261 

Pledged  securities   251 

Real  estate 236 

Seat  in  stock  exchange 260 

Tangible  property    241 


INDEX  827 

South  Carolina  PAGE 

No  inheritance  tax   766 

South  Dakota 

Address  of  tax  collector 329 

Interest,  discount,  penalty   474 

Mortality  tables   215 

Rates  and  exemptions 766 

Statute 767 

Theory  of  the  tax 9 

Sovereign  State 

No  action  lies  against 451 

Special  guardian 

Not  practice  to  appoint 425 

Special  partner  279 

Stamps 

Penalty  for  not  affixing  to  stock 547 

Stock  transfers   74,  394 

State  Statutes  647 

Appraisal 470 

Banks  and  trust  companies  475 

Collaterals  and  strangers  only 476 

Common-law  transfers    467 

Double  taxation    479 

Executors,  duties  of 469 

Exemptions 480 

General  resume  .' 462 

In  avoidance  of  tax 466 

Interest,  discount,  penalty   471 

Interest  taxed  476 

Life  estate  468 

Non-resident  decedents  477 

Powers  of  appointment 467 

Receipts  from  tax 482 

Reciprocal  statutes   478 

Remainders 468 

Revenue 479 

Tangibles  and  intangibles 477 

The  rate  479 

Valuation 470 

Where  the  statutes  differ 476 

Wherein  they  agree  465 

Will  and  intestacy 466 


828  INDEX 

Statutes 

Arizona 647 

Arkansas 652 

California 657 

Colorado 675 

Connecticut 678 

Delaware 682 

Georgia 685 

Hawaii 687 

Idaho 688 

Illinois 690 

Indiana > 695 

Iowa 699 

Kansas 704 

Kentucky 708 

Louisiana 709 

Maine 711 

Maryland 713 

Massachusetts 715 

Michigan 719 

Minnesota 721 

Missouri 724 

Montana 728 

Nebraska. 730 

Nevada 732 

New  Hampshire   734 

New  Jersey   736 

New  York 

a.  Transfer  Tax  Statute 539 

b.  Decedent's  Estate  Law  607 

North  Carolina  ^ 741 

North  Dakota   743 

Ohio 747 

Oklahoma. 749 

Oregon. 751 

Pennsylvania.  .  . 754 

Rhode  Island  763 

South  Dakota    766 

Tennessee 769 

Texas. 770 

United  States 497 

Utah 772 

Vermont. 775 

Virginia 777 

Washington. 779 


829 

Statutes  —  Continued  PAGE 

West  Virginia  782 

Wisconsin 784 

Wyoming. 789 

Statutes,  construction  of 33 

As  to  domicile 152 

Copied  or  adopted  38 

Notice  and  hearing 37 

Reciprocal 42 

Retroactive  or  prospective 36 

Sustained  in  part  if  severable 34 

Stipulation 

Waiving  certification,  form 441 

Stock 247 

Closely  held  271 

Losses  on  sale  not  a  deduction 30 

Transfer  stamps 74 

Value  of  268 

Stock  exchange 

Seat  in   260 

Taxable 260 

Stock  transfer  stamps 394 

Stock  transfer  tax 

Penalty  for  not  paying 547 

Subprenas 

Appraiser  may  issue   380 

By  appraiser ;  form  580 

Superintendent  of  Insurance 

Form  of  application  to 581 

Supplemental  report 

Form  of   431 

Supreme  Court 

Of  United  States,  appeals  to 443 

Surrogate 

Appeal  to  419 

Appeal  to ;  form  of  notice  583 

As  taxing  officer 409 

Cannot  assess  tax  on  guess 412 

Cannot  require  Comptroller  to  refund  tax 455 


830  INDEX 

Surrogate  —  Continued  PAGE 

Designation  of  appraiser  378 

Determination  by   425 

Determination  by  New  York  Statute,  §  231 560 

Determines  materiality  of  evidence 389 

Discretion  as  to  resettling  order 439 

Duty  to  appoint  appraisers  not  discretionary 379 

Hearings  on  appeal  425 

Jurisdiction,  New  York  Statute,  §  228 553 

May  act  as  appraiser 380 

May  take  evidence  on  appeal 425 

Motions  to  exempt 427 

No  power  to  remit  interest 453 

Notice  of  appeal  from  second  taxing  order 433 

Notice  of  appeal  to  Appellate  Division 436 

Order  on  supplemental  report 432 

Order  remitting  report  428 

Power  to  vacate  decree 445 

Supplemental  report  of  appraiser 430 

Taxing  order  upon  second  appeal 434 

Where  mandamus  lies  against 455 

Survivorship 

In  joint  tenancy 133 

Suspending  taxation 

Where  power  to  invade  principal 191 

Symbolical  delivery  71 

T 
Tangible  property 

As  to  value 266 

General  discussion   477 

New  York  Statute,  §  220 540 

Situs 241 

Tax 

Accrual  of,  at  date  of  gift 83 

Accrual  of,  New  York  Statute,  §  222 547 

Assessment  of  409 

Assessment  of ;  form  of  notice 582 

At  highest  possible  rate 204 

At  highest  rate ;  form 417 

At  maximum  rate 206 

Composition  of;  form 594 


INDEX  831 

Tax  —  Continued  PAGE 

Composition  of  New  York  Statute,  $  233 563 

Computations  of 227,  232,  417 

Decree  assessing  418 

Federal 484 

From  what  fund  payable 183 

From  what  fund  payable  where  life  estate 189 

General  taxes 304 

Interest,  discount,  penalty  471 

Lien  of  176 

Litigation  to  determine 453 

Marshaling  assets  to  reduce 317 

Other  inheritance  taxes 303 

Payment  of   418 

Postponed  as  to  remainders 201 

Proceedings  to  collect  delinquent 457 

Bates  under  New  York  Statute,  §  221-a 545 

United  States  Statute 494 

Additional,  Act  of  October  3,  1917 494 

Refund  compelled  by  mandamus 455 

Refund,  New  York  Statute,  $  225 550 

Revenue  from   479 

Sale  of  property 178 

Set  forth  in  inventory 363 

Suspended  where  power  to  invade  principal 191 

What  property    235 

When  refund  refused   456 

Where  suspended  397 

Taxable  transfers 

New  York  Statute,  $  220 540 

Taxpayer 

Strict  construction  in  favor  of 33 

Temporary  administration 

Commissions 367 

Tenancy  by  entirety 123 

Tenancy  by  the  curtesy 121 

Tennessee 

Address  of  tax  collector  329 

Interest,  discount,  penalty 474 

Mortality  tables   215 

Rates  and  exemptions 769 

Statute 769 

Theory  of  the  tax 9 


832  INDEX 

Testator 

What  he  can  do 46 

What  he  cannot  do 45 

Texas 

Address  of  tax  collector 330 

Interest,  discount,  penalty 475 

Mortality  tables   215 

Rates  and  exemptions 770 

Statute 771 

Time 

Law  at  date  of  proceedings 25 

Law  in  force  at  death  as  to  remainders 200 

Signing  statute   22 

Transfer 21 

Tombstone 

Cost  of,  deducted  300 

Inventory  of  cost  366 

Transfers. 45 

Treasury  Department,  United  States 

Regulations 497 

Rulings 496 

Treaties 41 

Trust 

Bank  deposits  73 

Impressed  upon  legacy  180 

Trust  companies 

Duties  of  New  York  Statute,  §  227 552 

Notice  by ;  form  for 598 

Trust  deeds  84 

Reserving  life  estate  32 

Trustees 

Commissions 307 

Personal  liability  of 459 

U 
Unavoidable  delay  452 

Uncle.  .  57 


INDEX  833 

Unconstitutional  PACK 

As  property  tax  11 

Statutes  so  held  13 

Statute  void 29 

Unless  act  provides  for  notice 37 

Undertaker's  bill 

Inventory  of   366 

United  States 

Address  of  tax  collector 330 

Administration 516 

Appeals  to  Supreme  Court 443 

Bequests  to,  taxable 15 

Bonds  taxable   14 

Citizens  and  residents 498 

Civil  War  tax  485 

Collection  by  court  proceedings  512 

Collectors  of  internal  revenue 330 

Definitions 497 

Discount  and  interest  496 

Duties  of  executors  495 

Exemptions  and  deductions 495 

Gross  estate  500 

History  and  development  of  law 484 

Lien 514 

Net  estate 503 

Notice  and  return 505 

Payment 511 

Penalties 515 

Present  act ;  doubtful  constitutionality 486 

Provisions  in  detail ;  statute 494 

Rates 494 

Additional,  prescribed  by  Act  of  October  3,  1917 494 

Rates  prescribed   498,  499 

Revolutionary  War  tax 484 

Spanish  War  tax 485 

Table  of  rates  under  Act  of  1898 486 

Theory  of  the  tax 10 

Treasury  Department  rulings   496 

Utah 

Address  of  tax  collector 330 

Interest,  discount,  penalty  475 

Mortality  tables   215 

Rates  and  exemptions 772 

Statute 772 

Theory  of  the  tax 9 


834  INDEX 

V  PAGE 

Vacating  decree   445 

Value 

Active  securities 268 

As  of  date  of  death 262 

Bonds 277 

Closely  held  stock 271 

Full  and  undiminished  by  life  estate 211 

Furniture 266 

Good  will   282 

Inactive  securities   270 

Jewelry 267 

Number  of  years'  purchase  taken 284 

Partnerships 279 

Pledged  securities 277 

Pictures 266 

Rules  for  computing  good  will 283 

Real  estate  263 

Speculative  profits   288 

Stocks 268 

Tangibles 266 

Theoretical  in  life  estates 198 

Value  of  services  284 

Where  cannot  be  ascertained 262 

Where  there  are  no  profits 289 

Vermont 

Address  of  tax  collector 330 

Interest,  discount,  penalty  475 

Mortality  tables   215 

Rates  and  exemptions  prior  to  1917 775 

Rates  and  exemptions,  1917 775 

Statute  of  1912 775 

Statute  of  1917 775 

Theory  of  the  tax 10 

Vessel 241 

Vested  remainder 185,  200 

Vested  right 

Of  individual ; .  25 

Of  State   22 

Veteran  Acts 

Not  applicable  to  appraisers   379 


INDEX  835 

Virginia  PAGE 

Address  of  tax  collector 330 

Interest,  discount,  penalty  475 

Mortality  tables   215 

Rates  and  exemptions  777 

Statute 778 

Theory  of  the -tax 10 

W 
War  tax 

United  States 494 

Washington 

Address  of  tax  collector 330 

Interest,  discount,  penalty  475 

Mortality  tables   215 

Rartes  and  exemptions  779 

Statute 779 

Theory  of  the  tax 10 

Wearing  apparel 365 

West  Virginia 

Address  of  tax  collector 330 

Interest,  discount,  penalty  475 

Mortality  tables   215 

Rates  and  exemptions 782 

Statute 782 

Widow 

Domicile  of   153 

Of  adopted  son 163 

Rights  of,  where  husband  intestate 61 

Widow's  award 120 

Will 

Agreement  to  make  47 

Cannot  dispense  with  inventory 356 

Construction  of 116 

Directing  mortgage  paid  out  of  personalty 264 

Misconstrued  by  appraiser 444 

Mutual  wills 49 

Payment  of  debt  by  54,  297 

Transfers  by   45 

Transfers  by,  New  York  Statute,  $  225 540 

When  burial  expenses  are  provided  for 300 

Where  agreement  is  performed 48 

Where  agreement  is  violated 47 


836  INDEX 

Wisconsin  PAGE 

Address  of  tax  collector 330 

Amendments,  1917   785 

Interest,  discount,  penalty  475 

Mortality  tables   215 

Rates  and  exemptions  prior  to  1917 785 

Rates  and  exemptions,  1917 784 

Statute 786 

Theory  of  the  tax 10 

Witness 

Affidavit  of  executor 391 

Appraisal  in  another  proceeding  not  competent 392 

Beneficiary  competent   370 

Financial  expert 's  report  391 

Interested  witness    390 

May  be  punished  for  contempt  392 

Must  answer  questions  before  appraiser 389 

Non-resident  executor  as   392 

Opinion  evidence  as  to  value 389 

Personal  transactions  with  deceased  390 

Qualifications  of  expert 390 

Wyoming 

Address  of  tax  collector 330 

Interest,  discount,  penalty 475 

Rates  and  exemptions 789 

Statute 789 

Y 
Yacht 241 

[Total  number  of  pages  900.] 


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